Epm 11

EPMAG.
COM
NOVEMBER 2012
Operating Efficiency
Geophysical Market
& Technology Update
Flow Assurance
Offshore Well
Intervention
Automation
REGIONAL
REPORT:
Asia
Pacific
ESTIMATING
THE UNKNOWN
Solving the EUR equation
for unconventional results
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EXPLORATION & PRODUCTION

WORLDWIDE COVERAGE
N OV E M B E R 2 0 1 2
VO L U M E 8 5
A H A R T E N E R GY P U B L I CAT I O N
OPERATING EFFICIENCY
50
Modeling is next step-change in

unconventionals
54
58
Racing to real-time collaboration

Mobile solution aids field technicians
GEOPHYSICAL MARKET AND

TECHNOLOGY UPDATE
62
Marine market steams ahead
68
Finding the balance between automated and

manual interpretation
AUTOMATION
72
Technologies for expanding horizon of digital

oil field
78
Industry groups tackle R&D for drilling

automation
ISSUE 11
w w w. E P m a g . c o m
COVER STORY: EUR ROUNDTABLE
38
Estimating
the unknown
Unconventional plays wreak
havoc on traditional EUR
calculations. Heres whats
being done about it.
FLOW ASSURANCE
IndustryPULSE:
86
Are slugs too fast to handle?
92
The economics of subsea sampling in

offshore production
Pastures old and new

rejuvenate Norways
offshore profile
OFFSHORE WELL INTERVENTION
108
114
Retrieving subsea wells in one trip
The use of enhanced recovery technologies on

mature fields and pioneering production solutions
on new ones, combined with a successful frontier
exploration program, means that Norway has
been reborn as a global investment hot spot.
A question of intervention
122
REGIONAL REPORT:
ASIA PACIFIC
10
WorldVIEW:
A declaration of
independence
Ryan Lance is defining the new ConocoPhillips

as the independent E&P company moves into
organic growth mode with a focus on unconventional plays, major development projects, and an
emerging exploration program.
Unconventional:
96
Capital efficiency,
optimization keep
Marcellus shale active
The proximity to the Northeast markets provides

incentive for companies to continue activities in
the Marcellus shale even though natural gas prices
remain in the doldrums.
x NI
DEPARTMENTS AND COMMENTARY
AS I SEE IT
New faces, new places
MANAGEMENT REPORT
Its not just about filling the seat
w -S
17
DIGITAL OIL FIELD

Youve discovered oil and gas now discover your data
21
Shale gas factory provides collaborative field development
26
EXPLORATION TECHNOLOGY
L::
Growing through the reservoir
31
WELL CONSTRUCTION
Research focuses on measuring effectiveness of cementing jobs
33
PRODUCTION OPTIMIZATION
A first reeled in at Corvina
35
OFFSHORE ADVANCES
Biggest offshore prizes lie deep
37
TECH WATCH
Produce
ultra-high
temperature
wells faster
RHADIANT 1 ultra-HT non-aqueous
drilling fluid system is the industry ' s
first drilling fluid proven to deliver
stable rheolog ical performance at

bottomhole static temperatures
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An operator in the Gulf of Thailand 's
'Ring of Fire ' used the RHADIANT
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drill a high-angle well with a
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Isolation system shuts down gas migration
118
TECH TRENDS
120
INTERNATIONAL HIGHLIGHTS
128
ON THE MOVE/INDEX TO ADVERTISERS
134-135
LAST WORD
Managing social risk
COMING NEXT MONTH
136
The December issue of E&P takes a look back at some of
the major exploration, drilling, and production technological breakthroughs of 2012 while
also offering a sneak peek into 2013. Regional reports include a look at developments in
the Eaglebine play and the Arctic, and a special feature focuses on asset integrity management. As always, while youre waiting for the next copy of E&P, remember to visit
EPmag.com for news, industry updates, and unique industry analysis.
ABOUT THE COVER
Shale players are discovering that estimating
ultimate recoveries requires more than the standard calculations established in the 40s and 50s. Left, the Asia-Pacific region is poised for massive
E&P investment. (Photo courtesy of Anadarko Petroleum; cover design by
Laura J. Williams)
E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston,
Texas 77057. Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149;
2 years (24 issues), US $279. Single copies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER:
Send address changes to E&P, PO Box 5020, Brentwood, TN 37024. Address all non-subscriber correspondence to E&P, 1616 S. Voss
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Hart Energy Publishing, LP, 2012. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine. No article may be
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Printed on
recycled paper
ONLINE CONTENT NOVEMBER 2012
-?
Subscribe @ EPmag.com/explorationhighlights
PREMIUM CONTENT
Saudi Arabia: Unconventional gas

discovery results announced
Dhahran-based Saudi Aramco reported several
new unconventional gas field discoveries in the
north and northwestern part of the Kingdom. The discoveries are in the Jawf and Northern Borders provinces as well as areas
near Midyan field, discovered in 2011, Jalamid field in Sidre, and other
gas-bearing structures.
r
?.
A t.
Tonkawa Sand completion by Chesapeake:

1,181 Bo, 1.83 MMcf/d
A western Anadarko basin exploratory well by Chesapeake Operating
Inc. initially flowed 1,181 bbl of 42-degree-gravity oil, 1.83 MMcf of gas,
and 1,100 bbl of water per day.
1.
rV
Petrobras discovery in Sergipe-Alagoas basin

Rio de Janeiro-based Petrobras has confirmed oil and gas in the BMSeal-10 block in the ultra-deep waters of the Sergipe-Alagoas basin.
AVAILABLE ONLY ONLINE
'
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1
'
Deepwater GoM activity expected to surge

By Velda Addison, Associate Online Editor
Wood Mackenzie predicts activity in the deepwater Gulf of Mexico will head in a positive direction with production expected to hit 2 MMboe/d
in 2019.
Saudi Arabia gears up for unconventional gas exploration

By Scott Weeden, Senior Editor
The lure of shale gas is generating interest around the globe with Saudi
Arabia being one of the latest countries to focus on defining its unconventional gas resources.
Western Zagros shines light

on Iraq operations
By Velda Addison, Associate Online Editor
Being among the first companies to enter

Iraqs Kurdistan region brought challenges for
Western Zagros. But the work appears to be paying off as the company
makes oil and gas discoveries.
Every Rock
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An In Depth Look at the Eagle Ford Shale: Geology,

Benchmarking, Best Practices, and Reserves
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Executive Editor
1616 S. VOSS ROAD, STE 1000

HOUSTON, TEXAS 77057
P: +1 713.260.6400 F: +1 713.840.0923
www.EPmag.com
rduey@hartenergy.com
Read more commentary at

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

Senior Editor, Production
JENNIFER PRESLEY
Chief Technical Director,

Upstream
RICHARD MASON
MARY HOGAN
Associate Managing Editor
VELDA ADDISON
Associate Online Editor
New faces, new places
CODY ZCAN
Assistant Editor
ALEXA SANDERS
Corporate Art Director

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

CHRIS BARTON
Sr. VP Business Development, Oil & Gas, KBR
KEVIN BRADY
President, Multi Products Company
MIKE FORREST
Exploration Consultant, formerly with Shell
JOHN M. GILMORE JR.
Director of Global Industry Solutions Upstream
Oil & Gas, Invensys Operations Management
CHRIS JOHNSTON
VP & Managing Director, North America, Ensco
ULISSES T. MELLO
Manager, Petroleum & Energy Analytics, IBM
DONALD PAUL
Executive Director, University of
Southern California Energy Institute
EVE SPRUNT
Business Development Manager,
Chevron Energy Technology Co.
MANUEL TERRANOVA
Sr. VP Regional Operations & Global Sales,
Drilling & Production, GE Oil & Gas
RONNIE WITHERSPOON
President,
Superior Well Services, a Nabors company
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.
HARTENERGY
Editorial Director
PEGGY WILLIAMS
Senior Vice President, Consulting Group
E. KRISTINE KLAVERS
President & Chief Operating Officer
KEVIN F. HIGGINS
s we near the end of 2012, we embark on a new chapter at E&P. It

can be difficult to find people with the right combination of industry
knowledge and writing experience to build an editorial staff such as ours,
but Im pleased to introduce you to our staff going forward. Some are new
names, others have new job titles, but theyre all an integral part of our
operation.
Firstly, Scott Weeden has moved from his original position as online editor to tackle the production technology job and more recently the drilling
technology editorial position for E&P. Scott brings almost 40 years of
experience to his position, having written about the oil and gas industry
for several publications during that time. His depth and wealth of expertise is a huge gift to our magazine.
Secondly, Mark Thomas, the original editor-in-chief of E&P, has
rejoined the staff full-time as our offshore editor. After Mark left E&P
he took on the reins of Deepwater International, a publication he still oversees. He also managed public relations for Offshore Europe, Intelligent
Energy, and Russian Oil & Gas, all exhibitions managed by the Society
of Petroleum Engineers. Again, Marks expertise in this area has spanned
decades, and his location in the UK gives us a needed perspective for our
international coverage.
Then we were fortunate enough to hire Jennifer Presley as our new
production technology editor. Jennifer has a unique perspective on the
industry, having been a contract writer for the National Energy Technology Laboratory focusing mostly on methane hydrates. Jennifers stories
tend to start with, When I was on the North Slope, or When I was in
the Bay of Bengal Her work has taken her to some very interesting
test sites over the years, and were thrilled to welcome her to our team.
Finally, we welcomed Mary Hogan in October as our associate managing
editor. The associate managing editor position is a challenging one since
Mary will be working with senior editors to keep us on track and ensure
that we meet our deadlines. This is no mean feat, but Mary has the
organizational skills to maintain a tightly run ship.
Of course, E&P is not just about the editors its about our readers.
We would like to encourage all of you to provide any feedback you
might have about our magazine. We have some fresh faces
and the opportunity to be more nimble to respond to
our readers and their constant thirst for new
information. I hope youll take us up on this
challenge.
Chief Executive Officer

RICHARD A. EICHLER
industry
PULSE
Pastures old and new rejuvenate

Norways offshore profile
Norway has been reborn as a global investment hot spot.
Mark Thomas, Senior Editor
ith the Norwegian sectors admirable support

from a government that has reenergized its waters
with an active licensing program and a national oil company (NOC) that has been strategically investing in both
greenfield and brownfield technologies to access new
reserves, Norway is acting as the engine room driving
continued interest in Europe as an offshore market.
The NOC concerned, Statoil, is stepping up the pace
of its exploration and development activity in the frontier Barents Sea while at the same time continuing to
find major new reserves in its North Sea acreage.
Its world-class Johan Sverdrup discovery in 2011
shocked many observers who had believed the sector had
revealed all its secrets, with recoverable reserves estimated
at up to 3.3 Bboe.
Installations powered from shore

Statoil is busy further appraising the field and will make
a final investment decision by year-end 2013, while also
planning up to 12 further exploration wells over the next
three years. With the reservoir covering 180 sq km (69 sq
miles), it is expected to feature multiple production and
processing platforms as well as the innovative introduction of full electrification of the installations from shore
an initiative driven by the Norwegian Ministry of Energy
for all future platforms on the NCS. The capex for the
Johan Sverdrups electrification project alone is estimated
to cost around US $1.5 billion. The field itself is expected
to come onstream by year-end 2018.
The project is not Statoils sole focus, of course. It
remains concentrated on unlocking the potential of
its northern waters and for those who think this is a
recent trend, it is worth pointing out that Statoil has
been exploring in the Barents Sea for more than 30
years and has been involved in 88 out of the 92 wells
drilled in the area in total.
The company will drill nine wells in 2013 in its Barents
Sea acreage as well as tripling its Arctic technology
research budget from $14 million (NOK 80 million)
this year to $43 million (NOK 250 million) in 2013.
Statoils exploration executive vice president Tim
Dodson said the Barents holds no fears for the operator,
describing it recently in a briefing at the Offshore Northern Seas conference in Norway as a less challenging
area, as the Norwegian Barents is one of the only Arctic
areas with a year-round ice-free zone.
Concept screening
The deepwater drilling rig Aker Barents drilled the Havis
discovery well in the Barents Sea for Statoil and is due to
drill several more wells over the next few months. (Photos
by Harald Pettersen, courtesy of Statoil)
Statoil is due to start exploration drilling using the

West Hercules deepwater rig on the Nunatak prospect
in the Skrugard-Havis oilfield area before year-end and
will then drill and complete three other wells there over
a four-month period on the Skavi, Iskrystall, and Kramsno prospects.
The Skrugard-Havis oil hub project itself is still in the
concept screening phase, with Statoil mulling several
alternatives for a central floating production facility with
subsea wells, including an FPSO or Sevan Marine-design
floater with offshore loading or a semisubmersible platform with a pipeline to shore.
The fields lie just 7 km (4 miles) apart, with Skrugard
only discovered in April last year and Havis in January
2012. They are estimated to hold between 400 MMbbl
and 600 MMbbl of recoverable oil, with any produced
gas and water to be reinjected. The development conNovember 2012 | EPmag.com
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PULSE
cept will be chosen in 2013, according to Statoil, with a

final investment decision in 2014 and first oil by 2018.
A further three wells will then be drilled in the emerging Hoop area further north in the Barents next summer.
These will be the northernmost wells ever drilled offshore
Norway.
Subsea factory
Statoils Technology, Projects, and Drilling Executive
Vice President Margareth Ovrum is a key figure in the
companys push northwards. She has a strong belief in
the importance of the subsea factory concept as a
major potential solution for the Barents Sea and the
Arctic as a whole.
Tough weather and sea conditions are a regular experience in

the Barents Sea, as can be seen here on the Polar Pioneer rig
while drilling an exploration well on the Skrugard field.
Norway a top five tip

ield development spending offshore Norway will see
this maturing oil and gas province ranked in the
worlds top five in terms of expenditure.
Total upstream development capex will rise more than
30% to US $25 billion by year-end 2012 in Norway,
according to analysts Wood Mackenzie, with that figure
set to keep climbing to almost $30 billion in 2015, further
ensuring the countrys top five ranking as an investment destination. The only areas lying ahead of it are the
US, Russia, Canada, and Australia.
A key factor in the rising spend trend, stated Wood
Mackenzie, is that around two-thirds will be invested in
EOR from producing fields. Statoil already is a world
leader in EOR, currently recovering 50% of the oil in its
operated fields in Norway well ahead of the industrys
global average of around 35%. Taking the increased
recovery from all its existing fields since it originally submitted plans for their development and operation, the
company estimates it has increased the oil recovery factor from around 30% to todays figure of 50%, equating
to approximately 7.5 Bbbl of extra oil.
The company is aiming for an eventual average recovery rate of 60% from the Norwegian shelf.
Ross Cassidy, head of Northwest Europe Upstream
Research for Wood Mackenzie, said, We estimate that
around two-thirds of the $25 billion development expenditure in 2012 will be spent on increasing recovery from
producing fields and the remaining third on new field
developments.
Wood Mackenzies report, titled A review of the Norwegian corporate landscape, forecasts that majors will
invest around $26 billion over the next three years. n
Statoil already has made major inroads into establishing this concept, of course, being under way with two
major seabed gas compression and boosting projects offshore Norway on its Asgard and Gullfaks fields. Subsea
technology will solve a lot of the challenges, Ovrum
told E&P at ONS after one briefing. We have launched
our ambition for a subsea factory by 2020. That is our
road map.
She also added that Statoil was developing more
robust solutions for both permanent and floating production solutions for its northern seas and the Arctic.
A key technology soon to be added to Norways offshore tool box is the already well-established spar production platform. Somewhat surprisingly, it is only now
that a spar has been selected for use in its waters.
Perhaps unsurprisingly, however, Statoil has seized
the opportunity and taken it further the first spar
on the NCS will be the worlds largest (deck weight of
21,000 tonnes; substructure weight of 40,000 tonnes),
will be the first with gas condensate storage, and will
sit in 1,300 m (4,265 ft) water depth. The facility will
be used to develop the Aasta Hansteen field in the
northern Norwegian Sea.
Opportunity enabler
Statoil describes Aasta Hansteen as an opportunity
enabler, as the facility is planned to act as a hub for
future developments, with built-in spare area and weight
capacity, riser slots, and subsea tie-in connections. Gas
processing capacity has been set at 812 MMcf/d.
These world-class developments in both Norways
mature areas and its emerging northern waters are clear
proof that persistence and long-term thinking by both
oil companies and national governments can indeed
bear fruit.
November 2012 | EPmag.com
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ere at the beginning Here for the future

When you think of petroleum engineering and petroleum geology/geophysi
programs,the University of Oklahoma's Mewboume College of Earth &

Energy might be the first college that comes to mind,and it should be.
Home to the world's first school of Petroleum Geology, granting the firs
degree in 1904
Home to the world's first school of Petroleum Engineering

Alma mater to more petroleum engineers and petroleum geologists than
any program in the world
OU is alma mater to eight Society of Petroleum Engineers (SPE)
past presidents,eight American Association of Petroleum Geologic

(AAPG) past presidents and five Society of Exploration Geophysicis
idents.
www.ou.edu/mcee
MEWBOURNE
COLLEGE OF EARTH&ENERGY
THE UNIVERSITY OF OKLAHOMA
Real education for the real world.
world
VIEW
A declaration of independence
Ryan Lance is defining the new ConocoPhillips as the independent E&P company moves into
organic growth mode with a focus on unconventional plays, major development projects,
and an emerging exploration program.
Leslie Haines, Oil and Gas Investor
his past July, ConocoPhillips reported its first quarterly

results as a standalone upstream company, having split
off its downstream assets into Phillips 66 earlier this year
to become the largest North American-based independent. Production that quarter was 1.5 MMboe/d (55%
liquids, 25% North American natural gas, and 20%
international gas and LNG). Cash from continuing
operations was US $2.2 billion.
At the helm of the Houston company is Chairman and
CEO Ryan M. Lance. He is moving the new entity forward by capitalizing on its major production bases in
North America, Norway, the UK, Australia, Indonesia,
Qatar, and China. Production has declined since 2009 as
a result of non-core asset divestments. But volume rampups from shale liquids in the US, oil sands in Canada, and
international development projects, as well as emerging
exploration opportunities, should soon take care of that.
The companys roots date back more than a century to
Oklahoma, through heritage companies Continental Oil
and Phillips Petroleum. Today the new independent has
16,500 employees and assets in 30 countries. North America makes up more than half the portfolio.
Five years ago, people would have said that our North
American focus was a problem, but now its where everybody wants to be thanks to its unconventional resources
and deepwater potential, noted Lance. Also, 80% of our
assets are in OECD countries, and we like the stability and
risk mitigation this provides.
What does forging a new identity as a pure upstream company
look like?
Its blending the old and the new combining the size,
scale, and scope of a major integrated company with the
aggressiveness and agility of an independent.
People always tell me, You have to act like an independent now, and I say, No, we need to define what it
means to be an independent ConocoPhillips. We are
unique and uniquely capable. Under [retired chairman
and CEO] Jim Mulvas leadership during an era of
10
Ryan Lance, CEO of ConocoPhillips. (Images courtesy of

ConocoPhillips)
restricted resource access and rising commodity prices,

acquisitions built the major portfolio we enjoy today, with
43 Bbbl of total resources. With years of exploitation and
development opportunities in inventory and shale opening up once-undreamed-of new potential, we can move
into organic growth mode through the drill bit while
building on our capabilities as an explorer.
I also like to remind people that some things wont
change our commitment to safety, environmental protection, operations excellence, financial strength, our
moral and ethical compass, and our relationships with
the community and host governments.
As the largest North American independent out there,
how are you positioning the new ConocoPhillips?
On the basis of production and reserves, we are about
two times the size of the next-largest independent. But
Oil & Gas
GL
De nto n
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0"Idwow,
Think your
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world
VIEW
were still smaller than

the majors, so we are
North Sea
Canada
conventional
carving out a new
heavy oil
~90 Mboe/d
space.
~80 Mboe/d
Analysts dont quite
Malaysia
know what box to put
deep water
us in. They dont know
~80 Mboe/d
whether to value us
as a growth-oriented
US Lower 48
company or a returnsunconventional
oriented company. In
~210 Mboe/d
fact, we believe we are
both. Were aiming for
Australia
3% to 5% average proPacific LNG
duction and margin
~100 Mboe/d
Near-term Growth
Major Projects
compound annual
Based
on
July
23
forward
prices
Exploitation
growth beginning in
2013. Were producing The company has identified five major projects worldwide to maintain steady growth.
1.5 million boe/d to
and Australia, through the coalbed methane-to-LNG
1.6 million boe/d now and plan to get to 1.8 million
project in Queensland.
over the next five years, all from visible projects already
The organization knows what it will take, and all of
under way. The unique thing is that this growth also will
these projects are now under way. Some will start up this
improve cash flows and margins. For our size, scale, and
year, like the first phase of the Malaysia development.
scope, weve built a pretty exciting growth platform.
The UK Jasmine project comes online next year, as do
To what extent are you focused on unconventionals?
more of our Canadian oil sands. The Asia-Pacific LNG
What a huge game-changer they are! When you add
project is in 2015 and 2016. LNG is very important as
in the oil sands, theres tremendous opportunity in
Asia and Europe are short on natural gas, making these
North America. For example, ConocoPhillips expects
projects very competitive.
210,000 b/d of new production from Lower 48 shale
For the longer term, weve built a significant explotrends by 2016. In the Eagle Ford, were drilling 180
ration portfolio of both unconventional and conventional
wells this year and producing 70,000 b/d up from
opportunities. For example, were now the industrys
zero only 18 months ago. In the Bakken, well drill
sixth-largest deepwater acreage holder in the Gulf of
120 wells this year on a 600,000-acre position. In the
Mexico and have recently started drilling there. We hold
Permian, we plan 300 wells this year on a 1.1-milliontwo exploration blocks offshore Angola offsetting large
acre position that includes two shale trends as well
recent discoveries as well as blocks in the Bengal fan off
as conventional potential, with 7,000 identified new
Bangladesh and the Browse basin off Australia, to name
well locations.
a few. Were looking to expand our positions and add
As for the US overall, rewind five years and everyone
new ones if they can be competitive.
was talking about peak oil and importing more than
How much are you buying in the US?
60% of its oil. The whole conversation is tipped on its
Weve added about 700,000 acres since 2011 in North
head now when you think about the opportunity we
American unconventional plays and are always looking for
have as a country and its impact on energy policy.
opportunities. We seek out areas where we can build mateHow do you achieve 3% to 5% growth?
rial positions early at reasonable cost as in the Eagle
We have five high-margin areas that will account for
Ford, where our position cost only around $300 an acre.
550,000-plus boe/d by 2016: US unconventionals; the
What kind of portfolio mix are you aiming for?
Canadian oil sands, where we got out of surface mining
I dont have a set goal for a certain mix, but were not
and remain in [steam-assisted gravity drainage]; the
investing any money in North American dry gas plays,
North Sea, where we have several projects in developobviously. We target investments in high-quality assets
ment; Malaysia, where we have a big deepwater position;
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Shale formations in North America may hel p reduce the continent ' s dependence on imported oil. But recovering oil
and gas from ti g ht rock 10,000 feet under ground requires a lot of skill . fven more than skill , it requires responsibility.
Especiall y when the rese rves are in close proximity to prime farmland and local communities . I hat ' s why we remain
committed to developing technologies that measure up to the toughest efficiency and safety standards . Because we
know that what ' s great today can always be improved tomorrow. It 's in our nature . Never being satisfied .
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opportunity for North America to be a net exporter by,

pick a date, maybe 2025.
The reaction varied from some people who dont want
to believe this will happen to others who want to learn
more about it and consider it in their own plans. Theres
no doubt the reserves are there, so its a question of deliverability, timing of production, and whether appropriate
legislative and regulatory approvals can be obtained.
The other question is how will the unconventional
opportunities present themselves abroad? For example,
the jury is still out in Poland, where we are drilling pilot
wells and preparing to fracture them. Its still early. The
resource is there; the question is deliverability.
You know, the juxtaposition of all these trends
development of the unconventional resources, the
deepwater plays, the LNG projects, and so on makes
it a great time to be in this business. Im excited about
where we are and where were going and the opportunity to deliver on the plans weve set in motion. The
best days for ConocoPhillips are still ahead.
that will improve our margins and fit in with where

were going overall.
People ask me, Do you like oil or gas? In what areas?
I like good rocks, low cost of supply, and access to good
markets. You can get these through either oil or gas,
depending on location. I dont have an absolute target
I dont think about the business that way.
Tell us more about the Eagle Ford.
We love it. We were one of the first in this play and
added about 300,000 acres in 2005 and 2006. We identified the condensate window early on. Today were
among the best operators there and are taking lessons
learned and applying them in a dozen other North
American shale trends.
You talked about the shales at the OPEC meeting earlier this
year. How did the ministers react?
I told them that these unconventional plays and the oil
sands have changed the game and that there is an
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TIP No. 11
DID YOU KNOW

COMPATIBILITY
IS A KEY PART OF
CHEMICAL SAFETY.
Youve probably heard the old phrase
that oil and water dont mix. The fact is,
there are many chemicals in our industry
that must not be used or stored together.
Combining incompatible chemicals, or
storing them in too-close proximity to
each other, can result in adverse
reactions such as the release of toxic,
corrosive, or flammable vapors and
liquids, excessive heat generation,
even explosions. With some chemicals,
exposure to air or water might even
trigger such reactions.
Dont make decisions youve not been
trained to make. Dont do something
now that might be harmful later. Use
your authority through the management
of change and stop work processes to
correct a situation you view as being
potentially being harmful. When it
comes to chemicals, ask the experts.
At Halliburton, solving customer
challenges is second only to keeping
everyone safe and healthy. You can
find more safety tips at
www.halliburton.com/HSE.
Safety Moment Subject suggested by:

Taylor Robinson
Halliburton Employee
2012 Halliburton. All rights reserved.
management
REPORT
Its not just about filling the seat

Experienced middle managers are just a few years away.
Mary Campagnano,
Allen Austin Global Executive Search
he energy industry is always eager to uncover more

top talent in the oil and gas candidate pool. By
understanding a number of admirable changes and
improved practices successfully used by energy companies as a model, the current recruitment landscape can
underscore succession plans so that another 20-year talent gap does not occur any time soon.
With that said, the crux of filling open positions today
is to: a) use resources that can tap the small pool of
A-player talent while favorably and accurately representing a company, b) executing search processes that only
deliver candidates in alignment with a companys culture, c) identifying and developing high-potential talent
two to three levels down from the current gap, and d)
putting a succession plan together or revisit the one a
company already has.
Tapping experienced (and scarce) talent

Most corporations have determined that external
retained search firms fill the executive seat and access
that talent with great efficiency. Younger midsize companies with catapulting early growth that have had good
luck hiring via word-of-mouth and referrals from friends
of their leadership, however, have shown resistance to
using outside recruiters. Theres no argument that that
this type of soft referencing can uncover quality talent
and natural culture fits, but there are a few considerations
to keep in mind to do more than fill the seat.
Do-it-yourself recruiting. Do-it-yourself in-house recruiters
on a company payroll are assumed to have the best possible understanding of company culture and unspoken
behaviors that are subtly valued but not usually advertised. Companies should consider having in-house teams
and should ensure the teams feel 100% confident that
every HR representative speaking to potential candidates
in the marketplace can articulate the company subtleties
to vet the talent and accurately match them with the
opportunity.
With a dramatically different discovery process for
company culture and values from the in-house team,
external recruiters typically agree that, at the line-staff
level, internal recruiters add the best value. An internal
EPmag.com | November 2012
teams accessibility to reporting managers for regular dialogue and guidance makes for sound hiring. As such,
there are some admirable recruitment strategies going
on in the energy industry to solve the immediate crunch.
For example:
Halliburton is purposefully changing the gender
representation of its in-house recruitment teams. It
would like to move more women with five to 15 years
of experience to higher levels and realizes that when
women are considering a job, they want to see other
women who have been successful in the role; and
Many companies are transition-training military and
other complex instrumentation industry personnel
into the oil and gas sector.
Outsourced recruiting. While the effectiveness of these
recruitment strategies is assumed to be high, the volume
of open engineering and related executive positions
can be overwhelming to an in-house team. A good outsourced recruitment firm should offer 100- to 300-plus
man-hours (depending on the impact and level of the
role) dedicated to filling a position as quickly as possible,
accessibility to the competition, transparent reference
reports (this is particularly difficult to gather by an inhouse contact), and a steady process delivering daily and
weekly results. While an external firm should offer much
more, these are the most challenging tasks facing inhouse recruiters. Companies should consider outsourcing if a nodding donkey is needed to get production
started. They need to identify search firms before their
HR department burns through the companys friends
and word-of-mouth sources.
Culture as the success coefficient

An important element in the in-house/outsource discussion is culture and community. Culture is the behavior
of employees how things get done and community is
peoples sense of belonging to and caring for something
larger than themselves. Because talent changes frequently
and retention packages are paid, repaid by the competition to lure a talent away, and paid again by the latest hiring company, the new deciding variables are culture and
community. In Rebuilding Companies and Communities, Henry Mitzberg writes that a company without a
compelling culture is like a person without a personality.
That resonates because the contributions of middle management are getting serious results and retention. These
17
management
REPORT
rising stars can drive key changes in the organization, and

they want to stay to see the job through.
Does seeing the job through sound familiar? A Harvard Business Review study reports that those retiring
Baby Boomers have nearly everything in common with
the Generation Y workforce. They both value flexible work arrangements and the opportunity to give
back to society over compensation. These elements
are shaping company culture.
With culture and community being essential elements, a search process that produces candidates
that align with the companys culture and
values is essential. It is critical to evaluate
the character of candidates, their commitment to making a change, and the potential
contribution of a candidate to the new company. Literally hundreds of questions must
be asked (both in the form of a self-reporting questionnaire and through face-to-face
interviewing), but most poignantly, the culture of the client company and what is desired
by the candidate must be examined. A careful process
can mitigate failed searches, which are roughly 45% in
the industry. Companies should frequently take the
time to define what their culture is and purposefully
evaluate each candidate against it for the best fit.
develop a growth project a new product, service,

or business model intended to create value for
their business unit. They also leave the program
with a multiyear individual development plan.
Good times and talent ahead

The data is optimistic: Harvard Business Review reports
that 45% of the next round of leaders, Generation Y,
expect to work for their current employer for their entire
career. In as little as five years, there will be a number
(small but measurable) of early leadership-level engineering talent who represent the new generation with 15 years
of experience. Several companies have role model practices to retain and develop these high-potential but currently under-experienced talent:
Shell has career stewards who meet regularly with
emerging leaders, assess their level of engagement,
help them set realistic career expectations, and
make sure theyre getting the right development
opportunities;
A large manufacturer in China gives its rising stars
privileged access to online discussion boards led by
the CEO that are dedicated to the companys biggest
challenges. Emerging leaders are encouraged to visit
the boards daily to share ideas and opinions and to
raise their hands for assignments; and
Johnson & Johnsons high-potential talent participates in a nine-month program called LeAD, receiving external coaching and regular assessments. They
18
Culture and community are important

factors when looking for top talent.
Succession planning
Following the exercise of developing talent just below
the current gap, companies should establish a written
succession plan detailing who that talent is and what the
leadership activities are to foster and retain them. This
plan should include who has influence, when revisions
and reviews to the plan are scheduled, actions to implement in the event of an emergency, etc.
So what about fixing todays immediate problem? A
company must adjust its expectations for the number of
talented candidates it will select from in the short term,
push its recruiters to look globally, participate with top
female talent in women-focused energy associations like
Womens Energy Network, take time to assess culture
and ensure a search process that includes a proper
evaluation of fit, and identify and evaluate its potential
succession talent quarterly.
References available.
,
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digital
OIL FIELD
Youve discovered oil and gas

now discover your data
The data explosion requires new methods of analysis.
Steve Farr, TIBCO Spotfire
he digital oil field (DOF) has been a major area of

investment for all the majors and a fair few others
since the mid-part of the last decade. It was one of those
times where all the issues swirling around the ether suddenly coalesced and screamed a common and overwhelming answer. Whether the issue was in developing
difficult plays, attracting skilled labor, improving safety,
mitigating environmental impact, improving day-to-day
running and monitoring, or maximizing recoverable
reserves, the answer was IT and lots of it.
And in a historical perspective, this was long overdue.
The concept of shop floor data capture began in the
1970s. And in the decades since, IT has been used to
monitor and record at increasing levels of detail across
motor manufacture, high tech, food processing, and
apparel. Even at the craft end of these industries, the
move to digital has been inexorable: The cylinders in
your Aston Martin are no longer finished by hand using
apricot stones, but then they are also likely to last
321,000 km (200,000 miles).
So there are a lot of data, and they are used so that the
industry can run faster, longer, and cheaper. Near realtime adjustments can be made from control centers
thousands of miles away; the
technology is there. But what
else is there? Writing in Strategy
and Business in 2008, Steinhubl
and Klimchuk offered the following definition: The digital
oil field is a suite of interactive
and complementary technologies that let companies gather
and analyze data.
less data can be analyzed. That is a factor of volume, but

more importantly it is a matter of source. Recording and
generating new data types from new systems have been
necessary consequences of the DOF. But our business
intelligence systems are still analyzing the old world.
These systems are difficult and expensive to implement
and arguably harder and more costly to change. Accommodating entirely new data sources means changing
and building new structures of data aggregations,
dimensions, and hierarchies.
All of this is not impossible, but is it reasonable? If it
takes a year to reconfigure corporate reporting structures, how fundamental will the changes be in the
elapsed time? Is the industry creating a never-ending
task, chasing its own data tail?
What the Gartner Group calls data discovery tools
(and others call analytics) is a more fleet-footed alternative. Data is loaded in memory with no preconceived
notions of joins, hierarchies, and aggregations. Users
can then design graphical visualizations of the data to
explore relationships and correlations, drilling down
and filtering to whatever level of detail they require.
Mighty mash-up
The source of data gives us another problem one of
combining or mashing up data sources from disparate
Unknown casualties
in data explosion
Unfortunately those two things
gathering and analyzing can
operate against each other. The
more data that are gathered, the
Spotfire can graphically display well relationships in a number of ways. (Images courtesy of
Spotfire)
21
Making the
Impassable Possible
Weatherford's patented Compact" well shuttle makes today 's
complex well geometries fully loggable
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Go beyond wireline to optimize openhole logging . The Compact well

shuttle is one of ten Assure " conveyance options that give us an
unrivaled ability to tailor logging programs to your well , minimize
risks and obtain high -quality data-even in today 's decidedly more
complex wellbores.
The shuttle houses logging tools safely inside drillpipe as the pipe is
rotated and circulated past obstacles to total depth . Tools are then
pumped into open hole to log into memory as the drillstring
Evaluation
p
.
,to n I?L'. r
Production
Wireline serv ices
Assure " conveyance systems

Coiled-tubing
Compact " welshuttle
Compact drop-off
Pipe-conveyed
Pump-down drop-off
Slicklineiheavy-dutywirelne
Standard wireline
is pulled out. That's Tactical Technology" in action.
To learn more about our wireline offerings with more options

and more service , contact your Weatherford representative
or visit weatherford.com.
Thru-drillpipe
Thru-the-bit
Tractor
Openhole
Acoustics
Formation testing
imaging
Nuclear magnetic resonance

Porosty lltholcgy
Resstivity
Cased-hole
Microsesm ic serv ices
Weatherford
weatherford.com
digital
OIL FIELD
Weatherford'
Tactical TechnologyTM
in action:
systems in order to gain insight. The data may be coming from corporate systems
but increasingly may also be sourced from service partners in the field. Data discovery tools such as Spotfire allow users to quickly mash up data without waiting
weeks for assistance from programmers. Chevron, for example, combines its
geologist-produced water injection modeling data with operating partners realtime production data so that the water flow can be adjusted accordingly.
This is a sophisticated example of where data mash-up can produce real
efficiencies, and this is becoming critical in an industry where experienced
people are being lost and the risks associated with outsourcing and partnering
need to be mitigated. If E&P companies can no longer rely totally on their
own knowledge and expertise, then they must rely more on collating and analyzing the data in a holistic and meticulous fashion.
Data are for sharing so is analysis

If data mash-up is the key input to finding new trends in data, then it is the
presentation of the analysis itself that will broaden understanding. Put simply,
methods are needed that facilitate insight. Without this, any attempt to collaborate will fail. Initially, Chevrons production partners were reluctant to collaborate. It was not until they saw and more importantly understood the results
that they were bowled over.
And this is not just true of sharing with partners. What about the disconnects
in individual businesses? Back and front office collaboration certainly can be
aided through a common context, and so can collaboration with downstream
units wanting to secure product for their refineries and meet the demands of
end customers. This contextual collaboration goes a long way to promoting a
holistic view of the business, and at Chevron the use of Spotfire has grown to
more than 5,000 individuals across multiple use cases.
This is an area where dedicated analytics will always win over Microsoft Excel.
Excel is a personal productivity tool, not a tool built with collaboration in
mind. An analysis can be produced, but its development over time and its versions, rationale, and formulae cannot be easily understood by anyone but the
author. Tools such as Spotfire allow the data analyst to build analytic apps that
can be easily run by the executive on a web browser or a mobile device.
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Compact '" well shuttle helps

log complex horizontal well
in under two days after failed
attempts spanning 22 days
Tarim, China - In the kickoff and horizontal
section of a complex well trajectory, six
runs of a tool-push logging system failed to
reach TD. Three caliper arms were lost and
a sonic and induction tool catastrophicall y
damaged. The cost in rig time alone was
more than US$300 ,000.
Weatherford deployed tools to TD safely
inside the drillpipe using the Compact well
shuttle. The entire formation section was
logged in 45.5 hours-a fraction of the time
and cost of previous attempts.
To learn more about enhancing your logging
operations with our ten different Assure "

conveyance options and Compact tools,
contact your Weatherford representative or
visit weatherford.com.
weatherford .com
Spatial patterns of EUR can be viewed across any selected group of wells.
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Bluebeam Revu enables oil and gas companies to work smarter and faster,without compromise. Improve project
communication and documentation by digitally reviewing P&IDs using colored symbols to designate open and
closed valves,sequence annotations to automatically number valves,highlights to indicate isolation boundary lines,
and stamps to sign off on inspections. Save custom markups in the exclusive Tool Chest" for easy reuse,and share
custom tool sets with colleagues. All annotations are automatically tracked in the Markups list, which can be
exported to Excels to quickly and easily create checklists for test packs. Add custom columns to the Markups list t
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digital
OIL FIELD
Do they understand?
Keep it visual
This subject of accessibility is important for another reason. For decades the trend has been to run businesses
more scientifically, yet there is often disconnect between
the scientific method and the business decision-maker.
When it comes to the fine detail of analysis, companies
start to rely on experts, folks well-versed in statistical methods. Spotfire combines the world of the statistician into
the visualization of business data. Prepackaged analytic
capabilities can be used with both static data and real-time
feeds to predict outcomes of actions and offer immediate
suggestions for improvement remedy or risk mitigation.
For instance, using decline curves, Spotfire can readily
estimate well production and estimated ultimate recovery (EUR) while producing an analysis that the engineer
can work with for example, being able to graphically
remove downtime or see the expected yield of a new
well in a particular field. The data analyst can create easyto-use methods that explain the model and allow the nonstatistician to interact with it in a jargon-free way.
People are turned off by columns of numbers, and in an

industry as physical as oil and gas exploration, the desire
always has been to represent data in a graphical format,
for example, geospatial representations of fields and
wells. But true understanding of patterns comes when
they can be overlain with representations of other data
coming from the field.
The importance of these visualizations cannot be overstressed. Fernanda Viegas of IBM Research said, Basically, half our brain is hard-wired for vision. Vision is the
biggest bandwidth that we have in terms of sensory information to the outside world. So visualization is taking
advantage of the fact that we are so programmed to
understand the world around us in terms of what we see.
The DOF is becoming the graphically visualized and
analyzed oil field. Theres more to exploration than
hydrocarbons there also are new relationships in all
those data to explore and new business opportunities to
discover.
Silica is a problem. J&J has a solution.

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digital
OIL FIELD
Shale gas factory provides

collaborative field development
The principles of lean manufacturing are applied to the shale gas factory to eliminate the
wastes of people, time, resources, and assets while improving the quality of the shale gas well.
John M. Gilmore Jr., Invensys Operations Management
he advent of natural gas production from unconventional reservoirs like shale formations has had a
marked effect on natural gas prices and has put great
focus on the technologies employed for extracting gas,
such as hydraulic fracturing and horizontal drilling.
However, as the shale gas industry matures, it should
look beyond these key drilling technologies and explore
another technology innovation now appearing in the
industry: the application of lean manufacturing methods, sometimes called the shale gas factory. In particular, the factors for its success must be understood.
Shale gas fields need many more
26
Production differences
wells than conventional fields. The illustration shows expansion of
There are several key differences between a typical gas

field development and a shale gas field development,
driven primarily by the characteristics of the gas well.
Well count. Most conventional gas wells exhibit a high
flow (flush flow) during initial production, followed by
a long period of steadily declining flow. A decline curve
will show a constant-slope decrease over time.
Shale gas fields need many more wells, where new wells
add high initial flush flow followed by accumulating tail
flow as the wells age.
The shale gas development will drill wells continuously
to sustain production rates, with ultimate well numbers
in the thousands, followed by long sustained production.
Well complexity. Shale gas wells tend to be relatively
simple in design, relatively shallow, and set in fairly
homogeneous layers. This is partly due to the nature
of shale deposits and partly to the fact that drillers are
developing the easiest geologic structures first. This
relative simplicity and sameness makes drilling and
the completion process amenable to continuous
improvement.
There also might be significant benefits from correlating drilling and completion practices with the ultimate
characteristics and productivity of the well, including
flush rate peak, initial decline rate, and ultimate tail production rates. Similarly, the effect of production meth-
one well to 12 wells from two well pads a half-mile apart within the
same square-mile area. (Image courtesy of frackingboom.com)
ods and techniques can be evaluated to improve production performance over time.
Logistics. A continuous drilling campaign means constant change. New wells mean new automation, new gathering lines, new monitoring, and reporting daily.
Multiple drilling rigs, multiple fracing teams, numerous operations, and maintenance personnel mean constant activity in the field. The supply chain is immense.
All wastes must be removed and sites restored to near
natural conditions. And every action requires proper
permitting and reporting.
Continuous improvement. While all gas producers seek to
improve the processes, the high well count and repetitive
nature of shale gas development provides the opportunity for continuous improvement, both within and
among each of the key steps of field development: exploration and appraisal, drilling, infrastructure build, production, reclamation, abandonment, and remediation.
Shale gas factory

That new approach is a shale gas factory that manufactures gas wells and measures success by the effectiveness of
those wells. These need high production (strong flush
200 OM
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PET/
2012
Earls Court 2, Warwick Road,London.20-22 November 2012
Event Informatio
:,may
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9 PETEX is the largest subsurface -focussed E&P conference and

?oQ exhibition in the UK,att racting thousands of delegates from
across the world and across a spectrum of industry sectors ,
from super-majors to consultancies. A few spaces still remain

for those who would like to exhibit !
14.25
Our theme for PETEX 2012 is 'Global Frontiers , Global

Solutions ' . We 're promising a comprehensive programme
seainkm
illustrating the latest global activity in exploration , field

development , reservoir management and unconventional
exploitation .
The conference will open with industry leading keynotes Tony

Hayward (Genel Energy ), Glen Cayley (Shell) and Carl Trowell (Schlumberger).
It will also feature a special interactive Plenary Session , consisting of a panel of experts who will debate on the main
societal challenges facing the industry today . This includes representatives from BP,Tullow Oil,WWF and Global Witness.
Following the success from last time ,PETEX will again host the Petroleum Geoscience Research Collaboration Showcase.
Building on the success of last time ,PETEX will be hosting the

PESGB Graduate Career Fair, Student Lunch and new to
PETEX 2012 : The University Forum : a place for Universities
to interact with both students and industry.
J-P
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Mw
We will again be providing a special area
for
international
representatives ,
including : Oil companies ; Ministries;
F71 - .
Governments and Other promotional
agencies.
This designated space will provide representatives with a forum to increase their exposure and
promote licensing rounds and/or available acreage.
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For more information, to re ister or to download a timetable

for the event, please vise our website: www. petex.info
Petroleum Exploration Society of Great Britain,5th Floor,9 Berkeley Street,London,W1J 8DW
Tel: +44 (0)20 7408 2000 4 Fax : +44 (0)20 7408 2050 4 Web : www.pesgb .org.uk a Email: pesgb @ pesgb .org.uk
digital
OIL FIELD
flow with long stable tail production), predictable performance, and highly reliable equipment that is easy to
operate and maintain.
The other measure of performance is the operation of
the factory itself. It must have low capital and operating
costs, perform safely and reliably, and deliver its product
on time while meeting all regulatory requirements.
The conventional approach to shale gas development is a drilling

campaign of 100 or so wells, followed by a period of production,
followed by another round of drilling to replace depleted wells,
and so on. (Image courtesy of Invensys)
In short, the shale gas factory must behave like a classic,

lean manufacturing facility by avoiding all the wastes that
could plague any factory environment:
Poor quality. Making goods or services that do not
meet demand; that is, making poor wells;
Transportation. Moving things not required;
Inventory. Having more supplies and materials, workin-process, or completed but non-producing wells
than absolutely necessary;
Motion. Equipment or people moving more than necessary to complete the work;
Waiting. Lags between production steps;
Overproduction. Producing or installing before
required by demand;
Too much processing. Doing more than is required;
Defects. Costs of inspecting and correcting defects; and
Human talent. Failing to develop and use the capability
of the work force.
These wastes, termed muda in Japanese, were developed
by Toyota as part of its Toyota Production System (TPS).
TPS was key to the growth of Toyota as a world supplier
of automobiles.
Shale gas factory automation

Invensys and other automation providers, working with
clients to develop shale gas and similar unconventional
gas projects, have found five key areas where typical
operations management systems fall short.
28
Scalability and flexibility. The operations management

system must be scalable from the initial appraisal wells to
thousands of production wells without needless replacement or reengineering and without being oversized for
the early work. It must have the ability to add or modify
on the fly to avoid needless delays and match demand.
Data volume. The capture of relevant information along
the entire well production process, from exploration to
drilling to operations, produces tremendous volumes of
process and transactional data. Providing availability to all
users in the context that each requires without multiple
historizations and data duplication will be key to the
analysis that leads to continuous improvement.
Asset performance. Captured data must be continuously
analyzed for performance factors and made available to
the personnel who have the most ability to control those
factors. Information context must be available to experts
where they are so that they can analyze problems, provide
solutions, and monitor results without costly, time-consuming travel with a goal to bring the problem to the expert.
Early alerts and workflow. A constantly changing physical
environment and large volumes of data make effective
surveillance of operations extremely difficult. The use
of model-based technologies that monitor and identify
deviations from expected performance coupled with context-directed alerting systems helps focus operation personnels attention on potential problems promptly.
Alerts can trigger workflows and automatic escalation
if needed. Comprehensive workflows assure that actions
taken and results achieved are captured so that assessment
and improvement are possible.
Collaborative environment, remote operation

Success in the shale gas field will require the cooperation
of personnel from many functional groups such as safety
and environmental, geosciences, drilling, operations,
maintenance, governmental relations, procurement and
contracting, transportation, and many more.
A geographically dispersed, collaborative environment
whereby those people can meet, use their respective tools
to analyze and explain, reach decisions, set actions, and
monitor the results will be essential to success.
Reducing shale gas development costs

The characteristics of shale gas production open the
opportunity for a revised development approach that
will reduce cost and improve productivity in the field.
That revised development approach the shale gas
factory uses the principles of lean manufacturing to eliminate the wastes of people, time, resources, and assets while
improving quality of the final product: the shale gas well.
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IN
exploration
TECHNOLOGY
Growing through the reservoir

Moving into reservoir services will help a major contractor achieve its long-term goals.
hen CGG and Veritas united in 2007, the merger

created the worlds largest geophysical contractor.
But apparently that milestone did not temper the companys appetite.
Recently, CGGVeritas announced that it would purchase all of Fugros Geoscience division except for
Fugros existing multiclient library and nodes business.
According to the press release, The transaction will
enable CGGVeritas to become a fully integrated geoscience company, and it also will strengthen and extend
its existing equipment and acquisition businesses, in particular with the addition of four high-end 3-D vessels.
According to Antoine Lefort, senior vice president of
communications for CGGVeritas, the transaction will
both extend and strengthen the companys offerings.
One of the reasons for the transaction is for us to move
into the high-end geology, geophysics, and reservoir
characterization markets, Lefort said. We were partly
there with Hampson Russell, and now were establishing
a leading position in this market.
Fugros Geoscience division comprises FugroJason, Fugro-Robertson, Fugro-Data Solutions, Fugro-Seismic Imaging, FugroGravity and Magnetics, FugroGeoteam, Fugro MultiClient
Services, and Fugro Airborne.
Obtaining the four new vessels
will strengthen the company,
Lefort added. We think its a very
sound alternative to newbuilds, he
said. We will have new boats without
extending the fleet, plus newbuilds take a
couple of years to complete, and here well have
four immediately after the closing. That is a very good
alternative to catch up with the recovering market.
CGGVeritas also will benefit from the addition of new
acquisition services airborne, marine electromagnetics, and marine magnetics and gravity.
In addition to the new companies CGGVeritas will
acquire, it also has plans to form a joint venture (JV)
with Fugro in seabed acquisition. Under the terms of
the deal, Fugro will own 60% of the JV and will pay
US $290 million to CGGVeritas. This JV will combine
CGGVeritas existing seabed services, including permanent reservoir monitoring, ocean-bottom cable, and
RHONDA DUEY
Executive Editor
rduey@hartenergy.com
EPmag.com
1,000 seabed nodes, with Fugros 1,300 seabed nodes to
create a focused global leader in the fast-growing
seabed acquisition market, according to information
from CGGVeritas.
There also is a commercial agreement for CGGVeritas
to act as a nonexclusive broker of Fugros existing multiclient data, which remains owned by Fugro. This gives
CGGVeritas access to a broader range of client contacts
while increasing its exposure to complementary and
high-potential regions such as Australia and northwest
Europe, including the Barents Sea.
Finally, the deal includes a global strategic technical
and commercial mutual preferred supplier
agreement.
The addition of Jason and Robertson to the CGGVeritas portfolio
will beef up the companys reservoir characterization and exploration and appraisal capabilities,
adding more than 500 employees and giving it a leading position in these markets.
This is going to create synergies,
and those synergies are about productivity
for scaled savings for the fleet but also through the
technical and commercial leverage in processing, imaging, and multiclient, said Lefort. We also expect additional sales from our preferred supplier agreement.
Moving into more of a service-oriented model will
help buffer the company against the cyclical nature of
the business, he added. The deal also is expected to be
accretive as early as the first year after closing, something that is not so common when you have such a large
transaction, he said.
This transaction is a major step
forward and fits perfectly with CGGVeritas strategy, Lefort said.
Moving into
more of a service-oriented
model will help buffer the
company against the cyclical
nature of the
business.
31
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CONSTRUCTION
Research focuses on measuring

effectiveness of cementing jobs
An RPSEA research project was started at the University of Houston to
determine a way to measure drilling mud loss and the effectiveness of
cementing operations in real time.
ne of the biggest questions to come out of the

Macondo blowout in the Gulf of Mexico dealt
with the effectiveness of the cement job. The Research
Partnership to Secure Energy for America (RPSEA) has
taken on that problem with a research project with the
University of Houston to develop smart cementing
materials and drilling muds.
What were trying to do is bring in new technologies that can be utilized to improve drilling mud and
cement. The challenge that we are now facing is that
we cannot monitor the installation operation. The
question is that you do not know how good the installation is or if there is a problem, said Vipu Vipulanandan, director, Center for Innovative Grouting Materials
and Technology, University of Houston.
One of the unique aspects of this project is that it is
designed to provide information from the cement
throughout the life of the well. Imagine being able to
monitor a cement job as conditions in the well change
over its lifetime.
The researchers are looking for materials that can be
measured for changes in electrical resistance. The sens-
Baker Hughes cement-pump operator mixes and pumps

cement at the controls of a Falcon cement pump truck. The
University of Houston will be working with Baker Hughes on the
RPSEA research project for monitoring cementing. (Photo courtesy of Baker Hughes)
SCOTT WEEDEN
Senior Editor, Drilling
sweeden@hartenergy.com
EPmag.com
ing materials would be mixed with the drilling mud or

cement. Not only are we developing a sensing material,
but we are also going to build a simple monitoring system that can be used to tell you exactly what is going on
with the drilling mud or cement, Vipulanandan said.
The sensing material would allow the measurement of
changes in electrical resistance during drilling, placement, setting, and hardening in real time.
The sensing material in the drilling mud would allow
the driller to more quickly identify circulation loss and
react to the problem. For cementing, the operator
would be able to determine where the top of the
cement is, any voids in the cement job, and problems
with cracking or temperature changes.
The university researchers will be working with Baker
Hughes on the project, which started in August 2012
and is expected to be completed in 2014.
The researchers will be testing smart materials such as
nanotechnology, polymers, surfactants, and conductive
fiber and filler to select materials for further tests.
We are looking at new technology to make sure we
can sense the materials. We want to monitor resistance
and temperature and then develop a relationship for
how to interpret what is going on in the materials, Vipulanandan said. Currently, researchers are modifying
mud and cement without changing those properties
with piezo-chemical resistive materials.
Vipulanandan is excited about the project and what it could provide, especially
in ultra-deepwater operations. This will
be an interesting project to watch.
33
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O ne
Ce p an y . . .Un li m it ed
S o l u t i o ns
production
OPTIMIZATION
A first reeled in at Corvina

The BPZ CX-15 platform, the worlds first buoyant tower drilling and
production facility, is installed in the Corvina field.
ishermen know corvina (aka sea bass) as a feisty

fighter found along the coasts of the southern
Pacific. Foodies know corvina as a tasty ingredient in
ceviche, a Peruvian delicacy. For Wison Offshore and
Marine and Horton Wison Deepwater employees, Corvina is not a fish; it is the home of their newest design off
the coast of northwestern Peru.
The BPZ CX-15 platform, according to Wison, is the
worlds first buoyant tower drilling and production facility. With a little creative thinking and some tweaking of
their deepwater design principles, the team at Horton
Wison Deepwater delivered to their client, BPZ Energy,
Seen here is an artists rendering of the BPZ Energy CX-15

buoyant tower drilling and production facility. (Image
courtesy of Horton Wison Deepwater)
JENNIFER PRESLEY
Senior Editor, Production
jpresley@hartenergy.com
EPmag.com
this platform specifically suited for shallower water
deployment.
This design really comes into its own in water depths
greater than 80 m (260 ft), where the buoyant tower
needs much less steel than a conventional fixed jacket,
said Chris Harding, vice president of business development for Horton Wison Deepwater. While the BPZ project is outside of this range at a water depth of 54 m (177
ft), the structure fit the bill in regard to Peruvian seismic criteria.
It is a compliant structure and does need to move
with the waves, said Lyle Finn, chief technology officer
for Horton Wison Deepwater. It is this feature that
makes it impervious to earthquakes. The earth can
shake, but the top part is buoyant, so it stays vertical.
The buoyant tower hull consists of four connected,
ring-stiffened cells that measure 8.4 m (28 ft) in diameter and 60.1 m (197 ft) long. The cells surround a central suction pile, bringing the total hull length to 69.9 m
(229 ft). The suction pile, similar to a spud can, is what
moors the tower into the seabed.
Tower total weight is 2,500 tons, and it supports a
three-level drilling and production topsides facility that
weighs in at 2,300 tons. The topside is fully equipped to
produce 12,200 b/d of oil and 12.8 MMcf/d of gas and
inject 3,500 b/d of water, and it also is capable of supporting a drilling rig servicing 24 well slots.
Constructed in 11 months at Wisons fabrication
facility in Nantong, China, both were loaded onto the
Osprey, a heavy lift transport vessel, before departing for
Peru in early August. Installation began shortly after the
Osprey arrived in BPZ Energys Corvina field in
Block Z-1, approximately 1.6 km
(1 mile) from BPZs CX-11 platform, in early September.
35
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Reliable FMC equipment makes all the different
FMC desi gns , m a n u fa c t u r e s , instal l s

and services our hi g h pressure tr ee and
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that "open " means open and "closed"

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investment and provide the fullbore
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offshore
ADVANCES
Biggest offshore prizes lie deep

The ultra-deep offshore is proving to be the most productive for new giant
discoveries.
o one in the offshore business needs telling that

deep water is the fastest growth market. As new oil
and gas plays continue to emerge such as those in previously inconspicuous areas like East Africa or the eastern
Mediterranean the majority almost immediately involve
exploration and development activities in deep water.
This is a testing challenge for companies entering
these areas for the first time or those who have had low
levels of activity there previously, stretching the technical and logistical capabilities of even the biggest supermajors. Remote locations, little or no infrastructure,
and minimal local expertise nearly always result in
heavy investment.
Italys Eni is a case in point. To develop its massive
Mamba North and South gas discoveries in Block 4 offshore Mozambique, where it has around 70 Tcf of gas
in place, it will have to invest up to US $50 billion as a
whole, including possibly up to three gas liquefaction
plants and essentially the building of an entire town
with around 40,000 workers.
Despite the cost, however, deep and ultra-deep water
remains a booming market. Drilling programs continue to materialize, with activity expected to rise further and deeper and more complicated wells requiring
more rig years and new units to deal with them. For rig
players this is translating into stable and improving day
rates, along with longer-term contracts the market is
essentially sold out for 2013.
MARK THOMAS
Senior Editor, Offshore
mthomas@hartenergy.com
EPmag.com
For floating production specialists, the demand is

expected to equate into orders for at least 60 FPSOs
within the next three years, according to SBM Offshore. By 2016 there will be around 220 FPSOs in
production.
A recent report by Bernstein Research highlights that
global deepwater production has leapt from under
500,000 b/d 15 years ago to 5.5 million b/d this year
(about 7% of the worlds oil supply). The shift has
caused a decline in oil produced onshore worldwide
from 90% in 1970 to 70% today, with that figure likely
to continue falling.
About 70% of the discovered reserves have been
found in more than 1,000 m (3,280 ft) water depth,
and 50% of the discoveries have been found in frontier
areas in the past three years alone. Report co-author
Rob West also noted that deepwater acreage, specifically frontier deepwater acreage, resulted in the largest
discoveries over the last five years. The average size was
600 MMboe in water depths greater than 1,500 m
(4,921 ft).
Fellow analyst company Wood Mackenzie sees the
same trend, forecasting that the deepwater US Gulf
of Mexico is experiencing long-term growth that will
see $70 billion invested in the sector by 2030.
This continued increase in activity will further
expand demand for product lines such as subsea
equipment and infrastructure, infrastructure installation, marine well testing, wireline, directional
drilling, LWD, and completion equipment.
By its very nature deep water demands advanced
technology solutions, so this longOffshore discoveries hotspots the vast majority of giant oil finds in
term spend trend is a curve from
the last six years have been found in more than 2,000 m (6,560 ft)
which we can all take
of water. (Chart courtesy of Goldman Sachs)
comfort.
37
COVER STORY:
EUR ROUNDTABLE
Estimating the
UNKNOWN
Unconventional plays
wreak havoc on traditional
EUR calculations.
Heres whats being
done about it.
Rhonda Duey, Executive Editor
he E&P industry probably understands the concept of

risk and reward as well as any casino owner in Las Vegas.
Because the industry is working with a product that it rarely
sees, it has come to rely on numerous calculations to estimate what it cannot accurately predict.
Such is the case with estimated ultimate recoveries
(EURs). In conventional reservoirs, engineers rely on calculations from the 1940s and 50s to determine each wells
EUR, and usually these estimates are within 90% of the
actual ultimate recovery. Unconventional reservoirs, on the
other hand, refuse to bend to simplistic rules that have
explained the behavior of their conventional cousins for
decades. This simple inability to accurately estimate recoverable reserves impacts not only the company predicting a
wells performance but that companys stakeholders and
government regulators as well.
The unconventionals have added a lot of fuel to the
debate, said Ken Medlock, senior director of the Energy
Forum at the James A Baker III Institute for Public Policy
and adjunct professor and lecturer in the Economics department at Rice University. If you think about shales, theyre a
new frontier, and typically theres a steep learning curve
when you dive into any kind of a new frontier.
Thats what were experiencing right now. Theres a lot of
get to know you time.
Added Scott Wilson, senior vice president at Ryder Scott,
The debate keeps everyone thinking. The fact that theres
38
Critical operationalparameters ,
Unveiii
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iy
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ecise fluid p lacement , reducii

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11?
COVER STORY:
EUR ROUNDTABLE
controversy is good because that means we havent stopped

working the problem.
Europe is watching
By Melvyn Giles, Shell
So what is the problem?

To understand the scope of the issue, it might be helpful to
review how EURs are determined in conventional reservoirs.
According to Dr. Stephen A. Holditch at Texas A&M, typical
factors in conventional EUR to compute hydrocarbons in
place are formation thickness, porosity, water saturation,
and pressure. EURs are then determined using volumetrics,
decline curve analysis (DCA), materials balance, or reservoir
simulation.
Conventional reservoirs have high permeability and are
usually associated with a fixed area, defined by structure or
faults, Holditch said. In conventional fields, we can determine the average reservoir pressure by simply shutting in
some or all of the wells for 72-plus hours and measuring the
rate at which the pressure increases in the shut-in wells. With
accurate production and pressure data and good geology, it is
rather easy to determine the EUR in a conventional reservoir.
According to John Lee at the University of Houston, the
two most commonly used methodologies are volumetric
analysis and DCA. Volumetric analysis estimates the volume
of the hydrocarbons in place by examining reservoir properties and analogous reservoirs to determine the fraction of
the hydrocarbons that might be recovered.
DCA, which is even more commonly used, projects an
observed decline trend into the future. This works well in
conventional fields because the assumptions required are
satisfied by these reservoirs.
The key assumption here is that after a relatively short
period of time, maybe a few weeks or months at most, a well
begins to drain its entire drainage area, and that happens
pretty quickly, Lee said. Thats the condition that has to be
satisfied for our conventional DCA to be reliable.
Unconventional reservoirs
Naturally, as anyone familiar with unconventional reservoirs
can attest, few of the industrys hard-gained rules apply. A
key issue that refuses to be solved by more science or R&D
is a lack of production history.
This also affects DCA, Lee said, because the assumption
that the well is draining its entire drainage area within a few
months is totally incorrect in low-permeability reservoirs.
It can take years before an unconventional well begins to
drain out to its drainage boundaries, he said. Until then,
our conventional methods of extrapolating decline trends
are unreliable.
David Anderson, vice president of Software Technical
Development for Fekete Associates Inc., echoed Lees concerns. Production history is extremely important, he said.
40
atural gas is an important component of a sustainable future energy mix, including in Europe, and
tight and shale gas are expected to play a role. Both the
demand and the markets will be there to take advantage
of any tight and shale gas supplies that are developed in
Europe.
In Europe, the exploration of shale gas is still in
its early stages, and no commercial production is
taking place. A significant period will be required for
development.
Public concern about the safety and environmental
impact of tight and shale gas continues to mount.
These concerns focus on the process of hydraulic fracturing, possible impacts on water availability, and contamination. There are also more general concerns
about other impacts, including noise, compensation,
and intensity of development. This means that the
industry must be transparent about its operations and
listen and respond to the concerns of its neighbors.
And it must maintain the very highest operational and
environmental standards.
The success of proven technologies like horizontal
drilling and hydraulic fracturing technologies in Europe
also will depend on the extent to which environmental
benefits and impacts will be carefully assessed and balanced from the outset. The role of public authorities and
regulators is therefore to ensure that any exploration
and exploitation of tight and shale gas resources are carried out in an environmentally safe and responsible
manner and in compliance with applicable legislation.
There is a robust legislative and regulatory framework
in place within the EU member states. In January 2012,
after conducting a study based on a sample of four EU
member states France, Germany, Poland, and Sweden
the EU commission confirmed that there is no immediate need for changing the EU legislation.
Member states must ensure via appropriate licensing
and permitting regimes that any exploration or development of energy resources involving hydraulic fracturing complies with the requirements of the existing
legal framework in place in the EU, including provisions
on the protection of environment and health.
Shell has established global onshore tight/shale gas
and oil operating principles to address concerns around
the development of tight/shale gas and oil, specifically
with regard to the practice of hydraulic fracturing. n
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COVER STORY:
EUR ROUNDTABLE
Thats the single biggest problem or limitation that we

have in really coming up with a reliable estimate of EUR
in many of these plays. Most of them are less than two
years old, some of them even less than that, so we just
dont have good analogs for them yet.
Standard DCA is based on an equation developed by
J.J. Arps and others in the 1940s. The original model is
based on boundary-dominated flow, the same drainage
calculation that Lee referred to. In transient-flow regimes
like shale plays, many engineers use a hyperbolic b
exponent in the Arps equation to generate the production decline curve.
According to an article from Ryder Scotts Reservoir
Solutions newsletter, debate centers on how high this b
Taking a scientific approach

By Rhonda Duey, Executive Editor
he issue of determining EURs in shales has gotten the

attention of the scientific community. Last year the
Sloan Foundation awarded grants to several universities,
including the Bureau of Economic Geology (BEG) at the
University of Texas-Austin, to study shale development
from several angles.
The BEG selected five US shale plays the Barnett,
Haynesville, Eagle Ford, Marcellus, and Fayetteville to
study closely to see if traditional EUR calculations can be
improved to take into consideration the multiple geologic, engineering, and economic variables that affect
the feasibility of these plays. So far the Barnett results
have been presented to the sponsors, and the peerreviewed results will be published soon.
E&P talked to Scott Tinker, director of the BEG, to find

out more about the study.
Why did the Sloan Foundation think this study was
important?
Sloan funded the bureau to look at the below-ground
issues, and it also funded Rice University, the University of
Colorado Denver, and Resources for the Future in separate studies to look at the above-ground opportunities
and challenges in shale gas. The bureau team is
studying five major US shale basins, considering the
in-place resource base and what part is recoverable,
accounting for technology and market conditions. Results
of this research will help decision-makers in the US and
elsewhere make informed regulatory decisions and craft
thoughtful energy policy.
factor should be. Some evaluators force a 0<b<1 limit for

the hyperbolic b because they say that Arps defined those
parameters for that case, the article states. The assumption that b is less than 1, however, does not mesh with
what the industry is seeing in actual shale wells.
Medlock explained that trying to force shale plays into
the Arps equation can lead to less than desirable results.
A lot of people were arguing that these shales looked like
they were following harmonic decline, he said. Then we
started to get more production history. The initial production fit, but with more history it started to deviate from
that prediction. People have tried double exponential
functions or something with a dynamic b factor. But at the
end of the day, all theyre really doing is curve-fitting.
Why is EUR determination in shales such a controversial topic?

It is hard to estimate ultimate recovery in unconventional
reservoirs. There is not a lot of production history, the rock
and fluid systems are heterogeneous and comprise very
small pores, the impact of hydraulic fracturing is not completely systematic, and there is absorption and adsorption
to be sorted out. Most people use mathematical curve fitting. Tad Patzek and others on the Sloan team refined an
approach that honors the physics of the system. We call it
[the] rock exposure index.
So far your work has broken down acreage by tiers
of rock quality. What factors were considered in determining these tiers?
The tiers represent the expected 30-year production
adjusted for the length of a horizontal well, which we call
adjusted 30-year productivity. We mapped adjusted 30year productivity across the field and separated 4000-plus
blocks (2.6 sq km or 1 sq mile per block) into 10 equalarea tiers.
The Barnett shale is mostly dry gas. Will it be challenging to tweak your findings for liquids-rich plays
like the Eagle Ford?
Liquids are harder to get out of shale, and two-phase (liquid
and gas) systems are harder to understand and model.
Whats next for the BEG researchers?
We are going to finish characterizing all five shale basins,
some producing fluids and some natural gas, and then take
stock in terms of what it means for US oil and gas production from shale. It is an exciting and important opportunity
for the US and the world, and it warrants detailed, quantified investigation. n
43
COVER STORY:
EUR ROUNDTABLE
Which is the right forecast?

1200
History
Forecast
Rate (b/d of oil)
1000
According to Wilson, factors such as num800

ber of frac stages and quality of proppant
Harmonic
can affect EURs. There are also impacts
600
Hyperbolic with b = 0.5
from toe-up and toe-down drilling,
400
which indicate the direction the drill bit
Exponential
takes to enter the shale formation.
200
The theory is that if youre toe-up, you
can remove liquids more effectively, he
0
said. The bad news is that this is not always
0
15
5
10
true because artificial lift is kind of an inexTime (years)
act science as well.
A considerable amount of research is
This graph shows three decline equations that fit nearly exactly to the first two
being focused on tweaks to DCA. In a paper years of production but produce noticeably different forecasts. If all three decline
given to the SPE Unconventional Resources equations match the historical data, then the exponential decline forecast will
conference in Vienna earlier this year, Giles show the most decline in rates and provide the most conservative forecast.
et al proposed a number of techniques for
(Image courtesy of Petrocenter.com)
approaching this problem including threecharacterized by a hyperbolic b1>1 and initial decline rate,
segment DCA, which uses the Arps equation in a way that
honors changing flow regimes in tight or shale wells. In
Segment 2 identifies the boundary-dominated segment
this approach, Segment 1 identifies the transient flow
characterized by a hyperbolic 0>b2<=1, and Segment 3
identifies the late-life segment characterized by an exponential b=0 and a
constant minimal decline rate. While
the authors state that this approach
applies to most wells in unconventional gas plays, they note that SegJE
H
ment 2 requires production data
analysis to be performed on a sample
set of wells to determine average timMagi
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per section. Im not aware of hard evidence that this is optimal, but I think
its a step in the right direction.
In addition to DCA research, more
basic research also is under way to betScan this code
ter understand the physics of shale
with your smartreservoirs. Shell, for instance, has
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ni
COVER STORY:
EUR ROUNDTABLE
conventional sandstones or carbonates due to their

organic nature. Lee is in favor of this type of research.
Many companies are doing something similar, and
even smaller operators are supporting research done by
service companies and forming consortia, he said. I
think this is important because we need to understand the
fundamental physics of storage and flow. I strongly support that type of research.
But its still early days, said Wilson. Were all looking
for the silver bullet, he said. With the number of people
who are studying this problem, if there was an easy answer,
it would have come out long ago.
Why does this matter?

Simply put, this matters in the US because of the Securities and Exchange Commission (SEC). To book proved
reserves, companies must estimate recoverable reserves to
a 90% certainty. And companies that cant accurately book
reserves will find their profitability potential suffering.
This is a useful metric when youre filing investor rela-
tions reports, said Medlock. From a commercial and

financial standpoint, its pretty important.
While the SEC has yet to file regulations specific to shale
plays, it expects the same high reporting standards as it
does for conventional plays, leading many companies to
file overly conservative EURs. Lee worked with the SEC in
2007 and 2008 to help the commission modernize its rules
for developing oil and gas reserves.
The SEC technical staff certainly will question reserves
estimates that dont appear to be somewhat on the conservative side, he said. The rate of decline becomes less
steep with time in a low-permeability reservoir, and if a
company allows it to get too shallow, the EURs are pretty
clearly optimistic. So the SEC staff will not let this happen.
He added that the staff will question any decline rate
that is less than 6% to 10% per year.
Various news agencies have reported that the SEC has
begun investigating certain publicly owned companies, suspecting that they have overestimated their EURs. As part
of the probe, the SEC has subpoenaed company records,
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archerwell.com
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The well company
Arch
2012
COVER STORY:
EUR ROUNDTABLE
including those from early 2008, the Ryder Scott article

states. The documents reportedly include material related
to the analysis of production decline curves, historical performance of shale gas wells vs. production forecasts, and
the appropriateness of various DCA methods. In the
past, companies have not been asked to justify reserves
bookings by demonstrating that classic DCA meets SEC
criteria for reliability. After all, this engineering technique
has a successful, established 60-year track record. Now,
however, requirements may be changing.
In addition to SEC requirements, operators need to be
mindful of EURs from a purely economic standpoint. A
lot of people look at the unconventionals as a technology
play that came true because someone invented something, Wilson said. What really happened was that the
price came up enough that we could do all of this stuff
that weve always been able to do and still make money.
He added that an EUR curve might indicate a good producer, but if the well never pays out or if prices collapse,
the well cant be booked. It merges economics with petroleum engineering. A lot of people dont realize that if you
spend more money and implement better technology, you

might get to the point where youve spent so much money
that your EUR is zero.
On the other hand, many shale producers are very prolific in their first few months of production. If this is the
case, why does the EUR matter? You can find operators
who will brag about the recoveries theyre getting, Wilson
said. What they dont tell you is that theyve spent twice as
much as the next guy, and theyre actually going to lose
money on the well. So thats a controversy.
But for Holditch, this whole EUR controversy is almost
a moot point. In reality, EURs are actually not that meaningful, he said. Many companies use 30- to 40- to 50-year
well life to calculate EURs. If one looks at the time value
of money, anything past 10 years is not really worth all that
much. In my work, we have found that most unconventional wells will produce 50% of their EURs during the
first seven years or so of their producing life. As such, I am
much more interested in what the production will be after
years one, five, and 10. I couldnt care less how much a
well will produce in the next 40 years.
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Modeling is next step-change

in unconventionals
Improved fracture understanding aids optimization.
Dave Sobernheim, Schlumberger
he US Energy Information Administration (EIA)

has projected that by 2035, shale gas production
will account for 46% of US natural gas production.
Throughout the world, countries and companies are
actively seeking to understand the prospectivity of their
own shale deposits. In April 2011, the EIA published the
results of a study it commissioned on an assessment of
48 shale gas basins in 32 countries. An early estimate
indicates 5,700 Tcf of technically recoverable shale gas
resources in those basins outside of the US, which is
nearly as much as the worlds proven gas reserves today.
Still, much remains to be done before the rest of the
worlds shales are as prospective as those of the US.
There is no doubt that the worlds shale gas resources
are abundant, as these are the source rocks for existing
conventional reservoirs. However, there are so many
unknowns that it is extremely difficult to estimate any
shale reservoirs true potential without actually performing the evaluation through drilling, fracturing, and testing as part of an organic shale exploration program.
Developing unconventionals
Unconventional reservoirs are highly variable, as experience in US shales has proven in recent years. Conventional geological and petrophysical models for sandstones
and carbonates do not apply, nor does one shale play
model readily fit another. Usual evaluation methods cannot to identify productive zones. The production mechanism itself is not completely understood, and the decline
patterns are even less well comprehended.
The current method of extraction is to place the wellbore in communication with as much of the rock surface
as possible to get the gas to flow through the fracture networks that have been created. Long horizontal sections
are completed with staged sets of perforations that are
then massively hydraulically fractured. This brute-force
approach uses vast amounts of horsepower, sand, and
fresh water. As there is no consistent method of evaluating the producibility of the shale, the perforations are
most often planned as a geometric pattern.
50
Studies done by Schlumberger reveal that 70% of the

production of a standard shale well comes from only
30% of the perforations.
Todays challenge is to apply the latest and best science
regarding unconventional resources to help harness this
potential. New approaches, including next-generation
advanced modeling tools, are enabling the industry to
make another step-change to harness the potential of this
massive resource base. This approach focuses on integrating reservoir quality, completion quality, and modeling
technology.
The first step to this scientific approach begins before
the well is drilled with reservoir description and insights.
New modeling technology has been developed to address
the challenges in sweet spot delineation, job design, performance prediction, and economic evaluation that current methods have been unable to overcome.
Optimization
The Mangrove reservoir-centric stimulation design software provides an integrated, science-based approach to
enable a seismic-to-simulation workflow. The software has
been developed after extensive theoretical and experimental work to fill the void in complex fracture design tool
modeling capability. Its key function, crossing-criteria
equations to model the interaction between hydraulic fractures and natural fractures in the reservoir, as described
by a discrete fracture network (DFN) geological model,
have been developed. The software analytically models
this interaction in terms of various parameters, including
angle of incidence, net pressure, fluid viscosity, and minimum-to-maximum stress contrast in the reservoir.
The workflow is rooted in reservoir characterization.
The software leverages the science of the Petrel E&P
software platform to build multidomain and multisource
cross-validated reservoir models to account for heterogeneity that dictates completion and stimulation in
unconventional reservoirs. Optimizing the number
and location of fracture treatment stages has been
primarily an empirical, time-intensive process that
does not account for vertical and lateral heterogeneity.
One available technique that is part of the reservoircentric stimulation design software is the wiremesh comNovember 2012 | EPmag.com
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OPERATING
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plex fracture model. Wiremesh models are capable of

coarsely overlaying microseismic-measured dimensions,
so history-matching is possible to theoretically calibrate a model. While effective for environments with
sparse data due to the semi-analytical engine, wiremesh
models suffer from an absence of a true relationship to
physical reality but nonetheless are an improvement
over the classical bi-wing models.
Modeling of complex hydraulic fracture propagation is possible

within the Petrel environment. (Image courtesy of Schlumberger)
More rigorous modeling techniques are needed to

create a better means of using new advanced well measurements and interpretation techniques in organic
shales, including anisotropic rock mechanical and petrophysical properties. Accurate predictions of discrete
hydraulic fracture dimensions including length, width,
and conductivity over complex dimensions related to
natural fractures and other textural rock features as
described in the DFN model must be made. One important consideration is to integrate this new hydraulic fracture design optimization tool with existing geoscience
workflow platform software tools.
The Mangrove workflow functions on the Petrel software are used to build a 3-D geocellular model capturing the rock heterogeneity that is a key characteristic of
unconventional reservoirs. Building a consistent earth
model, which is required for better complex hydraulic
fracture modeling in the new tool, is made possible
through cross-validating multidomain data from geophysics, geology, geomechanics, petrophysics, drilling,
52
and reservoir engineering. This approach encourages

disparate discipline experts to work together on one
common geoscience and engineering platform to build
the shared earth model for a successful design and evaluation optimization of the pumping treatments.
Field-proven
For PetroChina, Schlumberger engineers applied this
workflow and generated more than 50% greater production in a horizontal well versus the best offset and more
than fourfold production increases on two pilot vertical
wells versus conventional vertical wells in the field. Reservoir quality and completion quality calculations were
used in the reservoir-centric stimulation design software
to describe the capacity of the reservoir to produce economical flowrates of hydrocarbons as well as to determine
the propensity of the reservoir to respond adequately to
massive hydraulic fracturing stimulation. Both characteristics are required to generate economic success.
For two operators in the Marcellus shale, the Mangrove workflow has been successfully applied in optimizing job design. Pinpointing perforation location and
staging yielded production increases of more than
50% from the baseline performance of offset wells,
which were designed on a static geometric perforation
location basis. In these cases, advanced sonic logging
was deployed as part of the measurements package to
calculate anisotropic rock properties along the horizontal. A completion advisor module was used to group perforation clusters and stages into comparable sections of
rock. Microseismic activity was monitored and verified
comprehensive stimulation across the stage clusters.
Compared to the baseline offset wells where this technique was not used, only a portion of the clusters
received stimulation in each stage.
Technology challenge
Unconventional resources have a major contribution to
make to future energy supply, but technology will have to
evolve for them to realize their full potential. It may be up
to 10 years before these resources are producing fully, at
least in many emerging plays. While the fracturing complexity seen in unconventional resource development
has upended the classical bi-wing fracture optimization
methodology, new technologies are allowing a return to
rigor in the design and evaluation capability through an
accurate modeling of hydraulic fracturing geomechanical
propagation and productive behavior in ultra-low permeability and organic source rocks.
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Racing to real-time collaboration

A new dynamic 3-D modeling system helps make real-time subsurface modeling possible.
Alex Page, Halliburton
nyone who has watched a Formula 1 (F1) racing team

in action might have wondered why so many people in
the pit spend so much time staring intensely at computer
monitors. The answer is telemetry a word derived from
the Greek tele for remote, and metron for measure.
Out on the track, the race car is wired to stream information on every physical attribute of the vehicle back to
the pit crew. Engineers staring at those screens are processing and analyzing data moment by moment, anticipating critical decisions they need to make to win the race.
What does E&P have in common with racing?

F1 racing is a vivid and dramatic analogy for what takes
place in E&P companies all over the world. In the global
pursuit of hydrocarbons, real-time workflows are becoming prevalent. Just like F1 cars, modern oil and gas fields
bristle with instruments that beam a constant stream of
digital data from deep below the earth all the way back
to the office.
Understanding complex subsurface physical conditions has become increasingly difficult. It requires specialists from multiple disciplines to strive for greater
collaboration to locate and extract precious fluids and
bring them to market from remote areas of the world.
Todays asset team is an F1 pit crew, responsible for processing and interpreting all these data and turning them
into useful information in real time. For both teams, the
ultimate objective is the same: to enable faster, better
decisions that maximize return on investment.
To take the analogy one step further, an F1 pit crew
can use the live data feed to advise the driver when to
make tactical on-track adjustments. Similarly, officebased geologists and drilling engineers can monitor
real-time log data during geosteering operations and
instruct the directional driller to make course corrections when necessary.
F1 racing teams also use real-time data to make more
strategic decisions. For example, they must determine
when to bring the car into the pits and adjust the settings necessary to achieve optimal performance. E&P
teams also make strategic decisions based on new data.
They must anticipate when to pull the string out of the
hole and change the drill bit, when to alter the mud
weight, or even when a new ahead-of-the-bit well plan
should trigger an update of field models and maps to
ensure safer, more successful outcomes.
For either team, success depends on more than just
the simple acquisition of real-time data. It requires efficient data management, processing, analysis, and interpretation systems that enable a diverse group of experts
to work together and make smart decisions under
extremely demanding conditions.
The Dynamic Frameworks to Fill geologic

model can image fluid-filled reservoir
Realizing the full value of real-time information
compartments automatically. (Images
Consider what it takes for a team to make joint decisions

using real-time data. Data at the rig must be acquired,
formatted, and transmitted to the office. There, data
must be received and made available for analysis and
interpretation to transform the raw data into information that the team can use to make decisions. Two basic
alternatives exist for the storage of such valuable data.
In the first alternative, multiple feeds or copies of data
can be routed into individual standalone applications,
which each team member with a particular area of
expertise then uses to perform a specific evaluation.
The second alternative is to capture real-time data in a
single multiuser data store and provide expert analytical
tools in a unified, multidisciplinary desktop application
courtesy of Halliburton)
54
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WELL3EJI4
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Committed
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Wellheads Frac Tree Rentals Hot Oil

Slickline/Wireline Hydro-testing
Frontier Wellhead , founded in Watford City, ND, has earned a reputation
for providing reliable oilfield services in
the Williston Basin . Since 1986, skilled
crews have helped many exploration &
production companies unlock the full
potential of their oil & gas wells. Call
Frontier 's local experienced team to
help you get the most out of your well.
A,
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Williston,ND (3) Watford City, ND Dickinson ,ND Sidney,MT Sterling, CO (3) Greeley,CO Whitewater, CO
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OPERATING
EFFICIENCY
that can access this shared database. In the first alternative, experts get a copy of the data in their own application. In the second, data that are stored once are
available to the entire team.
Working with a copy of the data may seem pragmatic
because users have their own version on which to experiment, giving them creative freedom. The downside is
that the results of their analyses become stranded in isolated application databases. This stifles collaboration
with other members of the team or requires them to
perform multiple data transfers between all these standalone tools. This process wastes precious time and introduces the risk of data corruption, loss, or duplication.
A common desktop environment with a shared database
also provides team members a more efficient and collaborative workspace than any set of standalone systems.
Real-time subsurface updates

To understand what is being drilled into, typically maps
and models of the subsurface are made based on data
tional techniques in the same way that electronic communication has basically made letter writing obsolete.
A new alternative, the DecisionSpace Desktop, is now
available to upstream asset teams. This dynamic 3-D
framework modeling system has an advanced topology
engine at its core, which allows the team to automatically
create structure maps that are consistent from one reservoir level to the next.
Each map surface within the framework contains the
instructions required to generate the surface input interpretation, surface interpolation algorithm, extent, and
geometry of the grid. The topology engine tracks the relative position of and relationship between every surface
and fault that shares an intersection or touch point. Geological rules re-execute automatically whenever new data
or interpretations affect linked surfaces. This dynamic
approach represents a dramatic departure from conventional mapping workflows. Asset teams can easily incorporate real-time data and instantly update every map, fault,
or unconformity within the 3-D framework. Real-time
In the left image, reservoir fluid contacts update to show how the area transforms as new data are added in real time. In the center
image, a cross section through the prospective fault block shows the model before (dotted lines) and after (solid lines) the dynamic
data updates. The right image shows the Dynamic Frameworks to Fill geologic fault terrace framework with fluid-filled reservoir compartments automatically detected.
from previous wells and seismic data acquired over the

study area. The traditional process of creating these maps
is too time-consuming and labor-intensive to enable asset
teams to update in real time.
Some asset teams take the time and effort to generate
a full 3-D geocellular model, which allows them to integrate and spatially distribute subsurface rock property
information or investigate a range of stochastic realizations of earth model properties. While they can plan
new well locations based on this kind of modeling, this
fastidious and comprehensive approach has significant
drawbacks. For one thing, it is not unusual for geocellular modeling to take weeks or months to complete,
which is the antithesis of real-time decision-making.
The real-time revolution is essentially at odds with tradi56
updates apply equally to interval property maps as long

as teams establish instructions to automatically populate
the framework with relevant properties using the new
Dynamic Frameworks to Fill capability.
Ensuring superior performance

Real-time operations have begun to accelerate decisionmaking processes across the oil and gas industry. At this
point, however, the industry is only scratching the surface
of what is ultimately possible.
Just like modern F1 racing teams, upstream asset
teams will soon come to rely on real-time workflows
and collaborative, automated systems in order to shift
gears fast enough to ensure both safety and superior
oilfield performance.
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Mobile solution
aids field technicians
A communications system enables near-constant contact, even without Wi-Fi.
Mary Brittain-White, Retriever Communications
he Australian Gas Light Company (AGL) was formed

in Sydney in 1837. It supplied gas for the first public
lighting of a street lamp in Sydney in 1841 and was the
second company to list on the Australian Stock Exchange.
Today AGL Energy Services offers a range of services that
identify opportunities to improve customers systems,
equipment performance, and production processes
through onsite infrastructure design and maintenance,
monitoring and analysis, and energy-related safety and
compliance reporting.
AGLs Energy Services division is responsible for the
top 100 natural gas customers in southern and eastern
Australia, which means servicing more than 850 sites with
24/7 coverage. Managing the multimillion dollar service
business was a daunting process that was very dependent
on paper forms for tracking jobs, procedures, and safety
and environmental records for every customer.
AGLs dedicated national service manager, Sean
Murray, realized the efficiency bottlenecks of relying
on text-based SMS call dispatch and burdening his service technicians with binder books full of forms for jobs,
quotes, safety, and site surveys. Service technicians were
required to document all job-related activity and readings on paper. Once the job was completed, all the
paperwork was bundled up and delivered to headquarters in Sydney twice per week via the post office.
AGLs administrative team was tasked with opening,
sorting, and reading the job documentation so they
could transcribe the information into the SAP invoicing
system. We have the best technicians in the market, but
their handwriting is the worst, Murray said. They write
like doctors.
This deciphering process often required several days at
the end of the month to verify and reconcile the accuracy
of the job data before an invoice could be generated and
mailed to the customer. The entire job-to-invoice process
cycle typically took two weeks to complete, extending the
number of days that sales were outstanding from 30 to
more than 45 days.
58
Retrievers mobile applications allow users to continue working

even when out of network range. (Images courtesy of Retriever
Communications)
Improvement for all stakeholders

AGL began the search for a field mobility system that
would reduce or eliminate the paperwork; minimize
data entry for invoicing; and improve productivity for
the service technicians, administrators, management,
and customers. Their research led them to Retriever
Communications, a pioneer of field mobility solutions.
Operating since 1996, with hundreds of mobility apps
spread across 25 countries, Retriever has pioneered software as a service (SAAS) mobility solutions hosted in the
Cloud worldwide.
Retriever is a mobile enterprise application platform
for B2B, B2E, or B2C environments. Retrievers software
enables the development, deployment, and management
of robust, secure, cross-platform, fully internationalized
native mobile applications hosted in the Cloud. It will
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quickly. For example, safety

and occupational procedures were included in the
job flow, so the technicians
benefitted from immediate
awareness of any job hazards at the site and could
even share this information
with co-workers. Another
benefit realized was in the
area of problem resolution
if technicians ran into
unique situations, they
could quickly capture
details and photos, then
The field solution assists AGLs customers in the area of environmental compliance and reporting.
send the information to an
engineer at headquarters
operate across any IP-based network, including the Interfor a resolution. This saved many hours of labor and
net, GSM, GPRS, 3G and 4G mobile networks, Wi-Fi, and
greatly reduced return service trips. More importantly,
corporate ethernets.
service technicians were filling out job details as soon
All Retriever applications are platform-agnostic and
as work was complete, resulting in more accurate job
standards-based, facilitating ease of interoperability
data and parts tracking while liberating them from the
with mobile devices and platforms, customer corporate
drudgery of hand-writing reports at the end of the shift.
systems, and public services in the Cloud. Retrievers
Optimized billing
project management team was able to focus on AGLs
The administrative team quickly realized productivity
process and workflow without worrying about engineergains as well. First, job data were arriving electronically,
ing a one-off system. This meant faster implementations
often hourly as soon as jobs were completed. This was a
and roll-outs at a lower cost, avoiding the endless softhuge time-saving feature compared to waiting for job
ware implementations that many enterprises experidata via the postal service. The administrators could
ence. AGLs system was implemented and rolled out
immediately start the quality review process and no
in fewer than 90 days.
longer needed to decipher hand-written reports. ReConnecting AGL workers
entering job billing information into SAP was no longer
AGLs workers in the field are often in locations that
required. The job to invoicing process was fully autohave limited or no Wi-Fi signal, so their system needed
mated, saving AGL countless labor hours by eliminating
to work offline. Retrievers mobile applications are
data entry, and the billing cycle dropped from two weeks
designed to work in an occasionally connected environto two days. Customers can receive their job invoices
ment, allowing users to continue working even when
quickly, which means a lower days/sales outstanding
out of contact with the Retriever service due to lack
ratio for AGL.
of network coverage. Retrievers service uses a store
Compliance for customers
and forward design, handling integration with cusThe Retriever field solution also assists AGLs customers
tomer corporate systems and optimized data synchroin the area of environmental compliance and reporting.
nization with Retriever applications. AGLs workers
AGL performs combustion analysis on compressors and
with remote service routes took advantage of the offline
boilers, generating compliance reports for the Auscapability of the system because their work is queued
tralian Environmental Protection Authority. These
until they come back into coverage, often at the end
reports are sent to the customers in a PDF format, so
of the day as they head back towards town.
the customer can share them with the regulators and
As AGLs system was deployed to field service technimeet all compliance reporting deadlines.
cians, positive performance indicators were realized
60
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H u r r i c a n e and t o r n a d o
season sensor
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TECHNOLOGY UPDATE
Marine market steams ahead

Better images are spurring more drilling.
Peter Hatfield, Dahlman Rose & Co.
ith the stage set for substantial long-term growth

in offshore exploration activity, particularly in
frontier regions, deeper waters, and below complex geological structures, the marine seismic market is poised
for a strong multiyear recovery.
Recent advancements in seismic acquisition and processing have allowed explorers to see presalt and deepwater formations much more clearly, and these enabling
technologies should continue to fuel the oil and gas
industrys transition towards more complex (and expensive) offshore operations. Some of the most significant
discoveries of the past decade have been facilitated by
new methods of seismic imaging.
Major contractors like PGS

are outfitting most of their
vessels with broadband
capability. The new
technology raises the
barriers to entry for
competition. (Image
courtesy of PGS)
Largely in response to this, 58 ultra-deepwater rigs have

been ordered since October 2010 as higher expected
drilling success rates have greatly improved the economics of presalt and deepwater exploration.
Given that deepwater wells can cost upwards of US $100
million and historical drilling success rates are roughly
30%, operators are expected to increasingly rely on seismic as the deepwater spending cycle unfolds. Dahlman
Rose estimates annual marine seismic spending growth
62
of 10% to 15% through at least 2014, reflecting a recovery in the US Gulf of Mexico (GoM), the long-term positive outlook in Brazil and West Africa, revitalized interest
in the North Sea, and compelling prospects in East Africa
and the Arctic. Demand for 3-D seismic has grown by
more than 70% since 2006 in terms of acreage shot and
should be the primary driver of future spending growth.
Regional interest
Operators showed a higher-than-expected commitment to
the deepwater GoM in the recent central licensing round,
which attracted $1.7 billion in high bids. The optimism
ahead of the upcoming five rounds of central and western
GoM lease sales is a positive for the seismic industry, which
should benefit from a recovery in vessel demand to preMacondo levels and higher multiclient sales. In the three
months prior to Macondo, 15 3-D vessels with six or more
streamers were active in the region, compared to the five
vessels active in 1Q 2012. Following the disaster, nearly
20% of the 3-D vessel capacity exited the GoM and put
negative pressure on day rates as the vessels entered the
international markets. Due largely to the positive outlook
in the GoM, Dahlman Rose expects demand in the GoM
to reach eight to 10 vessels by early 2013.
The recent announcement for Brazils 11th licensing
round, which includes 87 offshore blocks and is likely
to occur in May 2013, should add several vessels to the
seven currently operating in the region. Additionally,
there is clearer visibility that the Brazilian presalt round
will occur in November 2013, which will provide an additional boost to multiclient sales and a further tightening
of the high-end vessel market.
The market in Angola strengthened in 1Q 2012 with the
commencement of a large 10-block multiclient program
for Sonangol being split between WesternGeco, TGS, and
PGS. There are currently eight 3-D vessels operating offshore Angola and Nigeria, and interest also is growing in
surrounding offshore regions, including Liberia, Sierra
Leone, Ghana, Cote dIvoire, and South Africa. Exploration in several of these regions will be focused in the
Transform Margin a relatively new play spearheaded by
Tullow Oil.
Significant North Sea legacy discoveries in 2011, notably
Lundins Johan Sverdrup, have revitalized exploration
interest in the region. In late June, Norway formally
BGP -a reliable partner f oryou
BGP is a leading geophysical contractor, providing geophysical services to its clients worldwide. BGP now has 50
branches and offices, 65 seismic crews, 6 vessels and 14 data processing and interpretation centers overseas. The
key business activities of BGP include:
* Onshore, offshore , TZ seismic data acquisition;
* Geophysical research and software development;
* Seismic data processing and interpretation;
* GME and geo-chemical surveys;
Reservoir
geophysics;
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Borehole
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* Multi-client services.
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Tel: 86-10-81201850 / 81201469

E-mail: marketing@bgp.com.cn
Fax: 86-10-81201392
http://www.bgp.com.cn
1
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Understanding
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Reservoir solutions for
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Heavy oil, shale and coal sea m gas reservoi rs require precise
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for unconventional resources , CGGVeritas has a proven track
record for delivering the best possible so lution for complex
imaging. With local expertise in the regional geology and a
portfolio of innovative technologies , including continuous
reservoir monitoring and microseismic services, we employ

a tailor-made solution to help you understand the unique
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Understand more by solving together.
Deliverin g SeisAble Benefits
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CGGVERITAS

TECHNOLOGY UPDATE
COMPELLING
360 View of Your
Subsurface Assets .
launched its 22nd licensing round, offering 86 blocks in frontier regions

in the North and Barents seas, most of which lie north of the giant Skrugard and Havis discoveries from the past year. The current North Sea
season has experienced higher demand and utilization than the peak
levels seen in 2007 and 2008.
Higher demand for surveys in Greenland, Baffin Bay, and the Russian
Arctic should require incremental vessels over the next several years.
Norway estimates offshore exploration investments will increase to US $7
billion (NOK 40.7 billion) in 2013 from US $5.6 billion (NOK 32.4 billion) this year, which should support seismic demand growth of at least
15% in 2013 and 2014.
The industry is ramping up exploration activity in frontier regions,
including East Africa, South Africa, Guyana, and Uruguay. Massive discoveries off Mozambique by Anadarko and Eni, an expected offering of
deepwater blocks off Tanzania later this year, and interest in offshore
Kenya should draw additional vessels to East Africa.
The Indian market faced an especially weak season in the beginning
of 2012, with only one 3-D vessel active in the region compared to the
11 3-D vessels active in 1Q 2009. The region is poised for moderate
improvement following the North Sea season, driven by incremental
demand from ONGC and Reliance.
Capacity
While seismic demand is expected to grow meaningfully over the next
several years, vessel supply growth should be much more modest. Following three years of seismic vessel overcapacity resulting from poorly timed
newbuild decisions and subdued demand stemming from the financial
crisis, the seismic vessel market is finally returning to balance in 2012.
Looking forward, there are seven high-end vessels scheduled for delivery
through 2014, representing 3-D supply growth of only 9% from current
levels. Given the 24-month to 30-month lead times for new vessels, the
$200 million to $250 million construction cost (including seismic equip-
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65

TECHNOLOGY UPDATE
ment), and the unlikelihood of vessel conversions due to

the heightened power and technology requirements for
modern seismic vessels, upside to this forecast is unlikely.
Vessel day rates, which tend to move rapidly during
changing market dynamics, remain meaningfully below
2008 highs and are poised for a strong recovery through
at least 2014. Current industry backlogs provide visibility

of a tightening market through early 2013. The companies best positioned to benefit from improved high-end
pricing are CGGVeritas, WesternGeco, and PGS. Combined, the companies have an approximate 65% share of
the high-end vessel market, with fleets almost entirely
equipped with proprietary broadband
technology.
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The advent of broadband data acquisition and new and faster methods of
data processing have been game-changing developments that have opened
the doors to presalt exploration and
elevated the barriers to entry in the
marine seismic business. Broadband
acquisition, which usually commands
a 10% to 15% pricing premium over
conventional 3-D seismic, is able to capture pressure and velocity waves and
thus can provide a higher quality, more
accurate, and deeper subsurface image.
Broadband is expected to account for
25% of 3-D seismic demand by yearend, up from 5% in 2010.
Multiclient libraries
In spite of an improving contract market, multiclient investments are growing in advance of the multitude of
upcoming licensing rounds. CGGVeritas expects to invest US $380 million in
its multiclient business in 2012, compared to $230 million in 2011, while
PGS plans to increase its multiclient
investment more than 40% in 2012.
Through its strong performance during the last down cycle, TGS demonstrated the value of multiclient as a
standalone business and has influenced more focused multiclient operations throughout the industry.
Strong evidence exists that the
current seismic upcycle will extend
beyond 2014, driven by a more balanced vessel market, recent technological developments that have elevated
barriers to entry, and the structural
shift in demand toward deepwater and
presalt exploration.
'
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Foz do Amazonas phase 1 surveys.
Spectrum has also commenced the next phase of

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an additional 6,000 km over this basin.
??r
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$14Spectrum
Following completion of this new survey Spectrum

will have collected over 34,000 km of new, long
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Companies participating in Spectrum 's new seismic
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+1 281 647 0602

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www.spectrumasa.com

TECHNOLOGY UPDATE
Finding the balance between

automated and manual interpretation
A new technique aids in interpretation of any stratigraphic feature.
Gaynor Paton, ffA
dvances in seismic attribute analysis and color visualization reveal the geology imaged within 3-D seismic
data with unprecedented clarity. As a consequence,
the industry can develop a level of understanding of
petroleum systems and reservoirs that was previously
unobtainable. Many of the geological features that
become apparent in this way have complex 3-D geometries that need to be captured if they are to be represented appropriately in a reservoir model. Accurately
incorporating such 3-D geometries into a reservoir
model can have a significant impact on volumetrics and
reserves estimation and lead to better well planning.
Therefore, extraction of 3-D geobodies has become fundamentally important in seismic interpretation. Currently,
geobody delineation uses volumetric threshold-based
extraction techniques or auto-tracking/region growing
from a seed point. These techniques are not robust as they
are sensitive to noise and cannot accommodate the variations in the expression of a geological feature.
To address this issue, ffA has developed a technique that
allows geobodies to be grown that is more reliable than
existing geobody delineation methods while still being
extremely simple to apply. This is achieved by bringing
together data-driven techniques and interpreter guidance
using intuitive manual manipulation tools, which are
unique in enabling on-the-fly 3-D editing of geobodies.
Confidence values computed at every point on the geobody surface are displayed to provide direct visual feedback to the interpreter on how well the geobody is fitting
to the data, which in turn helps the interpreter edit the
geobody more accurately.
The challenge of delineation

In complex geological environments, a single attribute
is often not effective at delineating a feature in the data.
Combining multiple volumes using color-blending techniques (such as RGB and CMY) is an effective way of
improving the definition of features. With color blending,
features that were previously very difficult to detect
become apparent, although often they will have a
highly variable signature.
With the new adaptive geobodies technique, a variable
character and multiple inputs within a feature are handled
using analysis of local data statistics. This mathematical
sophistication is important in giving the reliability required
for efficient interpretation, but it also is one of the factors
that make the adaptive geobodies so easy to use. This simplicity is a critical factor if a new technology is to deliver on
its value proposition.
Data-driven
Multiple attributes can be used in the geobody extraction

process so that each individual attribute does not need
to fully define the area of interest and each one can
define a different characteristic of the feature (such
as combining edge and envelope
attributes for channel definition).
The statistical process is initiated
simply by defining a number of
seed points.
The seed points represent the
starting points for the extraction
as with conventional autotracking.
Seed points can be placed to identify
areas within the feature and also to
A channel and fan system barely visible in the reflectivity data (a) becomes apparent in an identify exclusion zones. ExaminaRGB blend of three frequency responses (b) and is extracted as an adaptive geobody (c)
tion of the data statistics around
despite the variable expression. (Images courtesy of ffA)
each seed point ensures that as the
68
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To overcome the safety and efficiency challenges associated with 4D m a r i n e seismic
acquisition, ION collaborated with a major oil company to develop a cost-effective

solution . By leveraging a unique combination of ION marine acquisition technologies
AREAS OF EXPERTISE
and acquisition optimization services, the client achieved over 20% infill reduction
Unconventional Reservoirs
while exceeding repeatability requirements for the survey. Whether you are sizing up
Challeng ing Environments
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TECHNOLOGY UPDATE
seismic character of the feature is changing,

the tracking statistics change with it. This allows
the adaptive geobodies to adapt to changes
in expression. This is just one way in which the
adaptive geobodies technique deviates from
conventional attribute analysis techniques
through replicating the way the human visual
system works.
Interpreter-guided
However, seismic provides an abstract and
An adaptive geobody defines a collapse structure. a) The reflectivity data
(gray scale) is displayed with an RGB blend of three frequency response
ambiguous representation of the subsurface
volumes that highlight the circular collapse feature in the center. Note the
geology that is subject to artifacts and noise,
similarity in the response within the collapse to that of the surrounding area.
which means there are often cases when the
b) The adaptive geobody grown using the RGB blend displays the confidence
data do not adequately represent the geology
value on the surface (red is high confidence; blue is low confidence).
that is being imaged. In these cases, it is necessary for the interpreter to extend or reposition
a significant drilling hazard in carbonate plays but can
areas of the geobody to fit with knowledge based on the
be close to impossible to interpret conventionally.
users experience. This workflow accommodates that need
Extracting them as 3-D geobodies gives a much better
and allows the interpreter to manually adjust parts of the
understanding of the shape and geometry and of the
geobody as desired. It is this use of both the available data
interaction between neighboring features than can ever
and expert knowledge in creating accurate 3-D representabe achieved using surface-based horizon interpretation.
tions of geological elements that gives the adaptive geobodThe adaptive geobody technique can rapidly extract such
ies method its power. A result is guaranteed, and that result
features as geobody objects, allowing much more wellwill match the data as much as possible while not being
informed wellpath planning.
constrained by data imperfections. Two areas in which
adaptive geobodies can turn tasks that were often impractiUnique approach
cal or impossible into something that can be done easily
The adaptive geobodies method is a unique approach to
are in interpretation of channel systems and carbonate disdefining the 3-D geometry of geological features from seissolution features.
mic data. The use of local data statistics and multiattribute
Channel delineation
inputs allows the adaptive geobodies to replicate some of
In hydrocarbon plays associated with channel systems, the
the power of the human visual system while maintaining
use of RGB blends of three frequency-magnitude response
an objective analysis approach. Combining this with intervolumes has become an accepted interpretation techpreter guidance means that geobodies can be extracted in
nique. Primarily this is because RGB frequency blends
a data-driven manner in almost any geological situation.
greatly aid interpretation of the depositional environment
Crucially, the adaptive geobody technique allows the geoand reveal additional details of channel structure, overbody to continue growing in a stable manner as the data
bank deposits, and splays. The problem is that reservoirs
characteristics are changing while the interpreter remains
associated with channel systems often are extremely hetin control of the extraction. This maximizes the use of
erogeneous and therefore have a highly variable character,
both data and external knowledge to give unprecedented
making geobody extraction of most channel systems
robustness. In the exploration projects in which it has
extremely difficult if not impossible using conventional
been applied, the adaptive geobodies technique has
methods. However, with the adaptive geobody technique it
added significant value through enabling the extraction of
is a straightforward process that can be applied in minutes.
multiple individual but overlying channel systems, complex fan geometries, or subtle karst features. The adaptive
Interconnected dissolution features
geobodies technique has improved the understanding of
and collapse structures
and derisked these projects by refining the geological
Dissolution features and collapse structures are usually
models, defining potential prospectivity, and delineating
highly complex interconnected features that represent
drilling hazards.
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AUTOMATION
Technologies for expanding horizon

of digital oil field
A balance between too much and not enough data is crucial for ensuring that relevant
information is available for decision support systems.
Mayank Mehta, GE Intelligent Platforms
ith ever-increasing energy needs and the end of easy

oil, oil and gas companies are focusing on fields far
and beyond as well as unconventional sources. Increased
regulatory and safety requirements are coupled with the
need for newer discoveries to meet demand and the pressure of reduced availability of experienced manpower for
safe, reliable, and efficient operations.
The digital oil field is an aggregation of people, processes,
and technologies providing significant value to E&P operators. However, many oil and gas companies have large, integrated operations across the value chain i.e., upstream,
midstream, and downstream. Therefore, expanding the horizon of the digital oil field concept and technologies to cover
the entire gambit of operations can significantly enhance
the business value of the organization as well as improve
safety and compliance to ever-changing regulations.
The availability and use of accurate, reliable, and timely
information, rather than just data, is a powerful tool that
can enhance asset performance. Integrated solutions that
offer advanced diagnostics can help companies manage the
control assets more effectively, alert operators about potential problems to enable quick response to issues, and even
prevent problems before they occur.
For example, production data from the wellheads in the
field can be matched with the demand to maximize profits,
and insight into field equipment health status can assist in
predictive maintenance and downtime reduction. Real-time
monitoring of events, predictive and preventive analysis, and
the ability to respond to conditions in the field are crucial
for safe operations.
Business advantages of the introduction of these integrated solutions that yield information instead of just data
As part of wellhead automation systems, remote terminal units are tough by

design and digital oil field-ready and offer performance out of the box, with low
power consumption and include integrated controls. (Image courtesy of GE
Intelligent Platforms)
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AUTOMATION
WELLEZ0
The Leading Oil & Gas
Reporting System
include increased operational effectiveness and response to demand cycle

fluctuations, the ability to overcome human resource constraints due to an
aging workforce, limited availability of experienced personnel, and lower
total cost of ownership of assets.
The following details some of the most interesting opportunities for technology to have a major impact for E&P operators.
Opportunities for technology

Industrial big data. Robust operations data management is a key requirement
for strategic growth and a space where IT and technology systems have
evolved over time. Advanced historian systems provide features that facilitate
a conversion between IT and management because the data provide an
enterprise operations intelligence platform that provides complete context
in the decision-making process.
The right level of virtualization. Oil and gas companies have been investing in
IT infrastructure as well as automation and control for improving safety and
performance. While there is standardization to reduce the number of disparate
systems, with the advancement of technology and geographic spread, companies are likely to have multiple platforms instead of a single common one.
Data virtualization helps get data from multiple sources within the enterprise to a single repository, which can be used by various departments for visualization of the real-time status of fields and equipment, historical trends, and
as a data source for simulation and optimization packages. Virtualization is the
key to having a complete picture of the events unfolding in different operational areas within the value chain, be it upstream, midstream pipelines, or
the tank storage area, since events in one location can create a backlash in
other related operational areas. The prevention of damaging events is a critical factor for safety.
While virtualization is a must, due consideration must be given to how
much to virtualize. With the decrease in costs of servers and storage equipment, it is easy to fall into the trap of data and information overload. A balance between not enough and too much is crucial for ensuring that
decision support systems have the relevant data.
Investments in virtualization and visualization deliver value to any organization; however, it is important to document and communicate the benefits
during the implementation process to avoid the perception of this investment as wasteful.
Foresight and insight for increased asset performance. Operational intelligence
enables operators of large industrial equipment to understand what is happening across the fleets and to predict and prevent equipment problems.
These systems increase production efficiency by improving reliability and
availability. The valuable insight that information provides helps boost asset
performance. For example, effective analytic systems can preempt alarm and
failure events based on historical modeling, enabling active avoidance to
minimize asset downtime and hence increase yields. These solutions provide
actionable warnings of impending equipment problems much earlier than
existing condition-monitoring approaches to:
detect, diagnose, and prioritize emerging performance and reliability
problems;
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AUTOMATION
focus maintenance efforts;

maximize and leverage resources; and
keep operations safe.
The average user of this type of solution can achieve
return on investment (ROI) in six to 12 months, and
sometimes much sooner.
Intelligent pipeline monitoring. Expanding the digital
oil field concept to optimize the transportation of liquids and gases and the storage and custody transfer of
end products ensures that the market demands for the
products are matched with the production to maximize
ROI. The what-if analysis helps business managers have
real-time scenario planning and optimize production
and supply for increased profitability.
Wellhead automation systems. E&P companies are
under intense pressure to maximize productivity, reliability, and efficiency while addressing increasing cost
and profitability pressures. Significantly high financial
and operational stakes in oil and gas recovery, coupled
with sophisticated processes in extremely harsh envi-
O R D E R
ronments, call for renewed focus on the criticality of

wellhead operations. This is the initiation point of the
complete oil and gas value chain and the focal point
for the implementation of digital oil fields, also known
as decision support systems.
Optimizing performance
Reliable information is at the heart of optimized performance. The critical and complex nature of E&P
operations demands that technology solutions aid in
improving the safety of the environment and people,
increase efficiencies, and enable real-time decision
support based on data from multiple disparate sources.
Companies that are lacking accurate, timely, and
integrated information cannot adequately control
and optimize production, leverage a centralized repository of data for real-time and historical analysis, or
monitor and enhance field production strategies
a significant disadvantage that results in suboptimal
performance.
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AUTOMATION
Industry groups tackle R&D

for drilling automation
The case for drilling automation in both onshore and offshore operations has been robustly
debated as the industry moves toward standardized development platforms.
Nick Gibson, Sekal Aberdeen Ltd.
he drive for drilling automation within the oil and gas

industry has become stronger in recent years. Industry
research has moved from the laboratory and test rig to
the drilling floor as drilling component vendors as well
as oil and gas companies have launched standardized
development platforms for third-party solution and
service providers to plug into.
Land and offshore drilling automation

Conventional oil and gas technology adoption models
predicted that the initial drivers for drilling automation
would come from the more expensive offshore operations
and migrate to the onshore operations when the technologies were proven and established.
However, this has been observed to not be the case for
drilling automation since land drilling operations for shale
hydrocarbons and coalbed methane have used drilling

automation technologies to address several key operations
issues. These include standardization of key drilling
processes and operations, addressing HSE issues involved
in drilling, and supporting the new generation of landbased drilling personnel who have less drilling experience.
Drilling automation initiatives

There are two distinct groups focused upon drilling
automation within oil and gas: the SPE Drilling Systems
Automation Technical Section (DSATS) and the IADC
Advanced Rig Technology (ART) Committee. DSATS
focuses on facilitating the development and implementation of systems automation specifically, including the linkage of downhole tools with surface sensors and controlled
equipment, while ART focuses on advancing rig technology. In 2010, the two groups began working together on
the topic of developing drilling automation systems within
oil and gas.
The DSATS and ART groups regularly organize major industry events
such as symposiums, workshops, and
debates to advance oil industry knowledge in the drilling automation field.
Automation case studies from both
inside and outside the oil industry have
been presented at meetings, and the
case for drilling automation in both
land and offshore operations has been
robustly debated and discussed by
meeting attendees.
Data automation protocols
The DrillScene Advanced Monitoring software provides separate views for the driller, toolpusher, mud engineer, mud logger, drilling engineer, and drilling supervisor and superintendent. This is the screen for the driller. (Images courtesy of Sekal Aberdeen Ltd.)
78
In 2011, the IADC established the

Drilling Control Systems (DCS) Subcommittee to establish protocols that
enable surface drilling control systems
to communicate with downhole drilling
tools to automate the drilling process.
Downhole tool information is made
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AUTOMATION
available from a variety of

proprietary acquisition systems through protocols
such as WITS, WITSML,
and real-time digital log
information standards.
Rig surface systems use a
variety of communication
protocols more appropriate
for high-speed control. For
drilling automation, the
OPC UA protocol has been
proposed as a common
communication mechanism to link the drilling
control systems and sensors
on the rig with automation
systems that will also
employ downhole data for
intelligent decision-making
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AUTOMATION
or support. Working groups are focusing on improving

communications and developing common protocols.
A DSATS working group is currently forming to recommend interoperability within the control space. This can
be seen as a dictionary that allows different applications to
talk to each other in real time, which DSATS sees as key
to rapid adoption of automation within the drilling
environment.
Membership of both groups is open to industry professionals who wish to connect with experts in drilling system
automation. The next major event will be a symposium on
Learning from Heavy Industry Front Runners in Amsterdam at the RAI Congress Center on March 4, 2013.
Drilling automation at IRIS

Since 2003, the International Research Institute of Stavanger (IRIS) has devoted R&D to drilling automation
using the Ullrigg drilling and well center along with its
virtual-rig environment within its facilities in Stavanger,
Norway.
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The Ullrigg drilling and well center includes a fullscale, offshore-type drilling rig with access to seven distinct wellbores. It provides the oil and gas industry with
a full-scale test rig facility to perform R&D and to test
new workflows, technologies, and drilling solutions.
The result of this research on active control of the
drilling machinery to avoid damaging the well during
drilling operations is DrillTronics, which has been the
subject of multiple articles and technical papers within
the oil and gas commercial and technical press over the
last eight years.
DrillTronics uses coupled dynamic drilling process
models to help monitor downhole behavior within the
wellbore in real time. Using the models predictive capability, key operational sequences are optimized, and
process behavior is diagnosed for subsequent triggering
of reactive mediating action. It also provides envelopes of
protection for operating the drilling machine within the
acceptable limits of the wellbore.
These models are continuously calibrated and updated
using real-time data from the active drilling program,
ensuring that the physics-based model of the process
behavior in the wellbore remains accurate.
To date, there have been three distinct development
phases for DrillTronics focused on developing safety
mechanisms for drilling fluid circulation and drillstring
dynamics as well as automation of key drilling processes.
Safeguards. The system continuously computes an
envelope of protection for key operational parameters
and inputs the calculated limits into the DCS such that
drillers cannot exceed those limitations (unless they
elect to do so);
Safety triggers. For some chosen parameters, the system
computes maximum or minimum expected values.
Any measurement outside the allowed window is interpreted as an incident, and automatic action is performed (e.g. stopping the upward rig block movement
when the hook load is too high); and
Automatic sequences. There are predefined sequences
that are performed automatically or semi-automatically by the system. These sequences require that both
safeguards and safety triggers are already in place in
the system.
The DrillTronics system has been applied on active
offshore Norwegian drilling operations on two occasions, the last time in 2009 on Statfjord C. In addition,
further system testing was performed at the IRIS Ullrigg
center, providing hands-on training in the capabilities
and functionality of the system for offshore drillers. The
results of this training will be the subject of an SPE
paper expected to be published in 2013. The capabiliNovember 2012 | EPmag.com
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ties of the system are further described in SPE papers

99027, 112744, 119650, 128234, 128285, and 128286,
and in ADE paper AADE-07-NTCE-45.
Alongside DrillTronics, IRIS developed the DrillScene
Advanced Monitoring software, which models the physical state of the full wellbore in real time using the same
coupled physics-based algorithm set as DrillTronics.
DrillScene actively monitors frictions, cuttings returns,
and actual drilling fluid volumes within the wellbore
and provides real-time notification of deviations from
the modeled behavior.
DrillScene uses WITS or WITSML formats for realtime data feeds as the drilling data input with which to
provide feedback on the well behavior in real time.
The current functionality and drilling issue detection
capabilities of DrillScene are further described in SPE
papers 119435, 150422, and 150942.
the team at IRIS will focus on the real-time performance

within the Machine Control Logic Unit of the DCS
along with adaptation for wired pipe solutions. This
upgraded version will be implemented and demonstrated in the virtual rig environment and the Ullrigg
test facilities at IRIS.
Automation is progressing within the oil and gas
drilling industry. The robust efforts of the SPE and
IADC specialist groups have ensured a common focus
of R&D and the regular exchange of ideas from both
inside and outside our industry.
Acknowledgement
Sekal was established in 2011 to commercialize the DrillScene
and DrillTronics systems as developed at IRIS in Norway.
DrillScene and DrillTronics are now commercially available
from Sekal and are being adopted by a number of global oil and
gas companies.
Next steps for research

The next phase of R&D for the DrillTronics system by
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FLOW
ASSURANCE
Are slugs too fast to handle?

Research into slug flow could facilitate significant advances in the safe design
of mechanical restraint systems.
Paul Fairhurst, Cranfield University
systems in terms of both the maximum allowable loads

and fatigue life.
ook up the definition of slug in the dictionary, and

Forces caused by density
and velocity variations
you will find everything from the familiar garden gasForces due to multiphase flows in offshore risers began
tropod and bullets to a unit of mass. Everything, that is,
to receive increased attention in the 1980s with the
other than the two-phase flow hydrodynamic regime of
advent of flexible risers. It was realized that the shape
slug flow, which consists of alternating high-speed liquid
of the riser could be affected by the fluid density variaslugs and slower moving gas bubbles.
tions and could lead to riser clashing and increased
Slug flow is a common flow regime encountered in
static loads, particularly at the touch-down point and
the operation of oil and gas flowlines and generally
the riser top.
results from flowline sizing pressure and velocity conIn addition, slug flows can lead to high-frequency
straints. The very nature of slug flow gives rise to time
oscillations that may excite structural vibrations at a
variations in fluid density and velocity. The slug is
similar frequency to vortex-induced vibration and
pushed along the flowline at high velocity by the gas
generate high stresses due to the change in flow direcpressure behind it, and this can give rise to liquid
tion. The high frequency of slugging (one per minute
flow rates in the slug that are an order of magnitude
or less) can lead to fatigue concerns, even if the magnigreater than the average. Slug impact loads can be
tude of the loads is not that large. Slugs can be so large
very high. There are also fatigue concerns, which
that the riser could be completely liquid and then gasemanate from the density variation between the slug
filled. While unlikely in the case of normal hydrodybody (liquid dominant with gas bubbles) and the
namic slug flow, it could easily happen during transient
bubble region (gas dominant with a liquid film).
These can be a significant
issue due to the relatively
high frequency of slugging.
Designing for the effect
of slugging requires an
understanding of the interaction between the internal multiphase flows and
the containing conduit,
a subject which is in its
infancy relative to external
fluid structure interactions.
Recent advances in computational power, numerical
techniques, 3-D multiphase
flow simulation, and
detailed experimental
measurement techniques
have the potential to facilitate significant advances
Shown here are the excursions of a wave catenary riser with a slugging velocity of 10 m/sec (33
in the safe design of
ft/sec). (Images courtesy of Cranfield University)
mechanical restraining
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FLOW
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Conventional
wisdom says
Phase and pressure are distributed as the slug tail leaves the bend center.
events and pigging operations. These effects lead to the need for coupling
between the modeling of the internal multiphase flows with the riser mechanical design packages.
Another manifestation of the damaging effects of the density variations
caused by slug flow has been the so-called bouncing pipe that has been
observed at buckle initiator sites. Here, the production pipe is laid along
sleepers at various points to promote lateral buckling during initial startup.
This creates a hump in the pipeline, and its buoyancy changes during the
passage of the dense liquid slugs and the lighter gas bubbles. The result is a
pipeline that bounces and rocks with such a high frequency the fatigue life can
be shortened dramatically.
that multiple-zone
frac systems
are only for
open holes.
At NSC-Tripoint,
we do things
a little
unconventional) .
Momentum forces due to impacts and change of flow direction

Any fluid or moving object that is constrained to change direction requires a
force to be applied to make it change direction. If the fluid has a steady density and is moving at a steady velocity, the force required is constant and may
be evaluated from a force/momentum balance.
This is the case for stratified, bubbly, and annular multiphase flows. However, for the case of intermittent slug flow, the velocity and density of the flow
89
FLOW
ASSURANCE
D
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7-? r,
Out flow
platform to support bend setup
3-component force sensor
torque sensor
preload set for force and torque sensors
aluminum brackets to fix bend on preload
bellow 2
pressure top 2
bend support 2
conductance probe 3
In flow
H bellow 1
G pressure top 1
0
F
Flow discharged into a slug catcher

via a 2 .57-m (8 .43-ft ) pipe
bend support 1
conductance probe 2
Air-liquid slug
flow developed
in a 9-m (30-ft)
pipe
bend
iI
J
The University of Cambridge designed and built the test rig shown to measure slugging forces.
NSC-Tripoint has taken multip le-zone fracturing to another level ,

where cement is just another isolation option. Our revolutionary completion
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FLOW
ASSURANCE
varies with time and can give rise to large variations in

the forces experienced as the flow is made to change
direction.
The important thing to note is that the force is proportional to the velocity. The intermittent nature of the
flow means that the force is pushing the bend out as the
slug front hits the bend, which then snaps back as the
tail of the slug passes.
If it is a long slug, acceleration can occur, giving rise
to a higher slug tail velocity compared to the slug front,
meaning that the maximum load on the bend may be
due to the recoil, which is somewhat counter-intuitive.
There are many cases in industry of the destructive
forces of slug flow at bends causing them to move, ultimately jumping off pipe supports or failing. Bends near
separator inlets can generate a twisting torque, leading
to cracks. Separator internals have been damaged.
Topside separators can experience large loads if a
long slug exits the riser due to the large accelerations
at the slug tail. This is caused by the reduced hydrostatic pressure required, which is then available to
accelerate the slug. However, the friction length is
reduced as the slug is consumed by the separator,
leading to a type of domino effect where the main
restraint on the maximum velocity is the backpressure
created in the separator.
Flowlines that operated satisfactorily early in their life
may start to experience movement as the field matures
and the water cut increases. This can increase the loading due to the greater density of the liquid.
In terms of dynamic impact factor, its value is the sub-
Completion Tools
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For more information on our unconventional and
ject of debate, but it is generally regarded as a maximum of 2, mainly from field experience. Whether it
is 1 or 2 can make quite a lot of difference, and this
debate has led to several experimental attempts to
measure the slug forces on pipe bends. This has been
quite difficult to do, with one of the most successful
attempts achieved at the University of Cambridge in
2002. The sophisticated testing rig used a three-axis
load cell to measure the forces due to slugging on a
70-mm (2.75-in.) pipe bend and generally corroborated
the use of a dynamic impact factor of two as a maximum design value.
These data were subsequently analyzed using a
1-D transient multiphase flow code linked to a 3-D
computational fluid dynamics (CFD) code; in this case
the STAR-OLGA coupling was used. In the coupling
model, the horizontally oriented 90 bend is modeled
using the 3-D CFD code STAR-CCM+, with the flowline
upstream of the bend modeled using the 1-D transient
multiphase flow code OLGA. The predictions were able
to provide reasonable estimates of the slug flow-induced
forces on the bend and were able to generate force distribution contour plots that illustrated the large forces
that act on a certain area of the bend wall, which is the
part most vulnerable to mechanical damage.
This type of simulation represents the current state
of the art in trying to get a handle on speedy slugs. In
the future, the industry needs to attempt experiments
at a more representative scale and with hydrocarbon
fluids or even consider making the slugs less damaging
in the first place.
VV
1r SC
conventional products and services, call us today:

V
337.330.8180
www .NSCTripoint .com
-Tripoint TM
The way completions should be
FLOW
ASSURANCE
The economics of subsea sampling

in offshore production
A new subsea multiphase sampling system ensures the collection of accurate PVT data.
Eivind Gransaether, Mirmorax
ne of the most commonly used terms in the oil and

gas industry today is flow assurance, and a reduction
in well intervention is one of the most accurate means
of determining flow assurances success. With rigs priced
at as much as US $1 million a day, the costs of shutting
down production for well intervention can quickly add
up, as can the risks. Subsea multiphase sampling can play
a role in preempting well intervention.
The growing role of subsea multiphase meters

With test lines for subsea well testing costing as much as
$60 million along with the accompanying logistical challenges, the last few years have seen subsea multiphase
meters become a valuable alternative to well testing.
Multiphase meters have ushered in a new era for operators with smaller platforms and the ability to upgrade facilities to subsea tiebacks.
The SMSS collects
samples under
isobaric conditions
via an ROV.
(Images courtesy of
Mirmorax)
92
Commingled pipelines and test separator measurements are a poor indicator of individual well production;
multiphase meters are providing operators with much
clearer data on their operations. Multiphase meters, however, can only operate to their full potential if precisely
calibrated and sensitively aligned with the changing
conditions of the reservoir and fluctuating flow rates.
With the cost of purchasing and integrating just one
multiphase or wet gas meter being approximately
$400,000, subsea multiphase sampling can have a
significant impact on the economics of the field.
Effective subsea sampling delivers true volumetric sampling on oil, gas, and water in the well without interrupting production. Through subsea sampling, the operator
can accurately capture fluid properties, calibrate multiphase and wet gas meters, and ensure that the wells are
performing at the peak of their production limits. An
important source for evaluating fluid properties and predicting reservoir performance today is pressure-volumetemperature (PVT) data.
Importance of accurate PVT

By tracking composition changes, PVT data can play a key
role in supporting production and fiscal allocation and
providing input to EOR programs.
These fractional data on oil, gas, water, salinity, and PVT
are crucial for calibrating multiphase meters. All multiphase meters using a gamma source must be configured
with the fluid properties of oil, water, and gas and must
reflect the changing PVT data over time.
Conventional test separators have determined the
changes in volumetric behavior of the reservoir fluid as
it passes through the separator with samples and then is
reconstituted to produce a representative live sample by
recombining the fluids with separator gas to match the
wellhead gas-oil ratio (GOR).
This process can lead to potential inaccuracies, particularly when using a separator on longer pipelines and
where lower pressures decrease PVT accuracy. Using
a test separator to run well tests one at a time can have a
negative impact on field economics with production shutdown sometimes inevitable.
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The dangers of inaccurate

PVT analysis were highlighted as far back as 1997
in an SPE paper by Adel M.
Elsharkawy of Kuwait University. In this study, inaccurate PVT analysis resulted in
a significant underestimation of the solution GOR
and oil formation volume
factor and an overestimation of crude oil viscosity.
The result was an underestimation of
the ultimate oil recovery from the field in
question by as much as 40%. Better representation of
PVT data ensures better prediction of reservoir behavior
and production optimization. This can only be achieved
through true volumetric sampling.
Subsea multiphase sampling

Recent technology developments in subsea multiphase
sampling systems are generating accurate samples through
the meeting of a number of criteria.
First, the sample needs to be maintained at its original
pressure conditon through extraction, delivery to the surface, and transportation to the laboratory facility. Maintaining this pressure condition and the true representation of
the process is crucial in providing accurate PVT analyses
and accurate samples.
This is opposed to traditional subsea sampling, which
normally takes place topside with samples taken randomly
without attention to the flow dynamics of the fluids being
sampled and the original field pressure conditions. The
result is an incomplete sample and a lack of accurate PVT
data. There also is the danger of fluid contamination
where samples are sometimes exposed to oil-based
drillling or other reservoir production fluids.
Second, sampling needs to take place regularly, with
sampling repeated multiple times on the same well to
secure a number of samples over a certain time period.
This is compared to traditional sampling, which is often
based on a limited number of ad hoc samples retrieved
either through wireline sampling or flow tests.
In addition, water conductivity may change significantly
during the time between the sample being taken and
results received by the laboratory, jeopardizing the validity
of the test and having a major potential impact on well
stimulation operations.
Subsea sampling needs to take place as close to the wellhead as possible. In the case of multiphase meters, it is
94
In this 3-D plot, the correlation curve

between two core data inputs and
the output value is shown. The red
point places the 3-D plot of the
meter in reference at a fixed
point, with PVT data needed to
ensure that all values correlate.
only through sampling at

or near the wellhead that
representative samples of
the fluid flowing through the
meter can be generated, yielding more
accurate fluid properties and more accurate
multiphase measurements.
Mirmoraxs subsea multiphase sampling system (SMSS)
has been developed based on the above criteria and is
already having an impact on a number of North Sea fields
in supporting multiphase meters. The SMSS collects the
sample under isobaric conditions for transport back to the
surface via an ROV.
Reservoir management economics

Subsea multiphase sampling today is having a positive
effect on the economics of the field in a number of areas.
While it is difficult to cite specific numbers, it is clear
that the costs of well test lines can have a highly negative
effect on the economics of a reservoir. Subsea well intervention can be labor-intensive and costly, in addition to
the lost production as a result of the shutdown and the
testing and reconnection of the well. A typical well test,
for example, can lead to lost production for 12 hours.
If a well is producing 15,000 b/d and the crude can be
sold for around $95/bbl, losses can amount to more than
$700,000. With the costs involved, the need to calibrate
multiphase and wet gas for maximum effectiveness is vital.
Based on the functionalities of an inline multiphase
sampling system, the operator can read the oil, gas, and
water fractions directly from the sampling bottles taken at
a specific time window. This provides a phase fractional set
of data that can be compared to the metering data for the
same time period.
By calibrating this fixed point at given pressure, temperature, and volumetric fractions, the operator can provide
the multiphase meter with a fixed point, increasing the
meters accuracy significantly in relation to the pressure
and temperature collection conditions of the sample.
The use of fixed datapoints for later reservoir simulation
and effective subsea multiphase sampling is likely to have a
substantial impact in cost savings and flow assurance.
Our focus orbear-wellbor

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UNCONVENTIONAL:
MARCELLUS
Capital efficiency, optimization

keep Marcellus shale active
The proximity to the Northeast markets provides incentive for companies to continue activities
in the Marcellus shale even though natural gas prices remain in the doldrums.
Scott Weeden, Senior Editor
he number of drilling rigs in Pennsylvania reached a

three-year low at the end of September. However,
production continued to climb during the first half of
2012, according to data from the Pennsylvania Department of Environmental Protection (DEP).
The culprits were low natural gas prices for the
former and new gathering system infrastructure
coming onstream for the latter. Production is expected
to increase even more since so many wells are waiting
to be connected to the delivery pipelines, according
to an article in the Philadelphia Inquirer Oct. 3, 2012.
About one-third of the completed wells in the state are
still waiting for a hookup.
The rig count in Pennsylvania was at 63 rigs by late
September 2012, down from 109 rigs a year earlier.
Some rigs have been moved out of the state as companies pare down drilling. The number of rigs in Ohio,
mostly in the Utica play, rose to 19, an increase of six
rigs since last year. West Virginia had 27 rigs running
both this year and last year.
The US Energy Information Administration (EIA) said
in May, With the shift to and increase in horizontal wells,
Pennsylvanias natural gas production more than quadrupled since 2009, averaging nearly 3.5 Bcf/d in 2011.
Consol Energy completes a

hydraulic fracturing job in the
Marcellus. (Photo courtesy of
Consol Energy Inc.)
96
Drilling programs in Pennsylvanias shale formations,

like those in other, more established plays such as the
Barnett and Eagle Ford in Texas, are migrating to more
liquids-rich areas due to the price premium of crude oil
and natural gas liquids.
The effect of low natural gas prices is apparent in
Pennsylvanias 2012 well count for the first third of the
year. From January through April, drilling began on 618
new natural gas wells; over 700 new natural gas wells
were started over the same period in 2011. In contrast,
263 new oil and combination (oil and natural gas)
wells were started in Pennsylvania from January through
April 2012, well above the 164 new wells that began
drilling during the corresponding period in 2011,
according to EIA.
Focus on drilling, production efficiency

Even though the number of drilling rigs in the Marcellus has fallen, companies continue to develop the available resources through more efficient drilling and
production technology.
Consol Energy, for example, said in its operations
update in July that it achieved a peak 24-hour production rate of 17.9 MMcf in a well in Westmoreland
County, the highest of any well in company history.
During 2Q 2012, the company drilled 17 Marcellus
shale wells and placed another 18 wells online. Noble
Energy, operator of a joint venture with Consol, drilled
six Marcellus wells in the liquids-rich area of the play.
Noble has one rig drilling in the area, and two additional rigs are expected to arrive in 3Q 2012. Noble
Energy now expects to drill 31 wells in 2012 on its
operated acreage, down from earlier expectations
of 39 wells, according to the company.
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UNCONVENTIONAL:
MARCELLUS
Pennsylvania boosts environmental stewardship in Marcellus play

The regulatory climate in Pennsylvania has been a big factor in opening up the E&P, petrochemical, and manufacturing industries in the state. The Marcellus play provides the resources for the transformation of those industries.
he success of oil and gas production in the Marcellus shale is not just an energy revolution. It is also a
petrochemical revolution and an industrial rebirth,
Michael Krancer, secretary, Pennsylvania Department of
Environmental Protection (DEP), told E&P.
He pointed to three refineries in the state that were on
the brink of death. What saved them was a gutsy airline
that bought one and a gutsy investor Carlyle Group
that formed a joint venture with Sunoco for another one.
The regulatory climate in Pennsylvania was a big
factor, he said. We are certainly open for business in
Pennsylvania. We are looking for creative solutions.
As an example, he described a study that was done
for the Marcus Hook refinery in Delaware County. The
study came up with seven potential uses for the refinery, and six of those were related to the Marcellus. If
that study had been done in 2007, there would have
been one use. The study would have taken eight hours
instead of eight weeks.
Krancer noted that the DEP provides regulatory services across all industries in the state from farming to
X-rays to natural gas to oil refineries. Government has
two major roles, he said. The primary role is to promote public safety. The second is to put our economic
house in order. The DEP is in position to protect public
safety.
However, the DEP is not just involved in public safety.
We certainly have a role in education, and not just oil
and gas, he said. We need to increase the energy IQ
of the average Joe Q. and Jane Citizen.
There are a lot of positive stories to tell. Recently, on a
three-well pad in southwest Pennsylvania, Consol
Energy used a 10% blend of mine-sourced water for
fracing.
In Pennsylvania, we have an abandoned-mine
drainage problem. I met people in the western part of
the state who didnt know that streams were not sup-
Consol has reduced the cost of completing its wells.

The company pointed out that its costs per frac stage in
2011 was US $205,000 per stage. In 2012 to date, frac
costs have declined to $181,000 per stage.
The company has found other ways to improve production efficiency and lower costs. The Gas Division
extended its laterals to an average of 1,242 m (4,100 ft)
98
Hydraulic fracturing continues to pose environmental challenges

in Pennsylvania. A Weatherford crew works on a well in the Marcellus shale. (Photo courtesy of Weatherford International)
posed to be orange, he said. One recommendation

from the Marcellus Shale Advisory Commission was to
try to use mine drainage. Now we have a white paper to
try to put legs on this. There is a bill pending in the state
senate to put legs on this as well. This is one of a genre
of efforts with technology in the industry.
He pointed to other fracing technologies, including
GasFracs propane fracing and efforts by Air Products to
use nitrogen for fracing. All kinds of technology are
coming to the fore, he said. There is a lot of capital
investment aimed at using less water.
There are challenges facing the oil and gas industry
that are similar to what faces other industries. Protecting
the water is one of those, he said.
This is a world-class play with world-class operators
and world-class expectations, Krancer continued.
Companies are not welcome in Pennsylvania unless
they are committed to environmental stewardship. An
economic case for being environmental stewards could
be made. Companies that do not have an environmental ethos will not be tolerated. n
in the first half of 2012. In 2011, the average was 1,000

m (3,300 ft). Longer laterals, when combined with
other efficiencies such as pad drilling, help to make
Consols Marcellus shale program economic at current
projected NYMEX prices, said the companys update
report in July.
The division also used water from coal mines for
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UNCONVENTIONAL:
MARCELLUS
Several companies maintain steady drilling
operations in the Marcellus play. (Photo
courtesy of Consol Energy Inc.)
hydraulic fracturing for the first time. The three-well

Morris 14 pad in southwest Pennsylvania was fraced with a
10% blend of mine-sourced water. The pad came online
in early July and was producing at an initial rate of 18
MMcf per day, according to the report.
Anadarko Petroleum ended its 2Q 2012 producing
about 1.2 Bcf/d gross from about 340 wells. The company spudded 17 wells during the quarter using four
operated rigs. Another 39 wells were spudded with 11
non-operated rigs.
The companys focus on capital efficiency and optimization has resulted in a 16% reduction in drilling
costs since 1Q 2012, while drilling cycle times have been
safely reduced to an average of 20 days per well from
22.5 days during 1Q 2012, according a 2Q 2012 report
from Anadarko. The company also reduced its average
completion cost to approximately $3.7 million per well
compared to $4.5 million per well at year-end 2011.
Anadarko also began testing another formation in the
play. Its first Geneseo well was completed with encouraging early results. The formation is about 303 m (1,000
ft) shallower than the Marcellus shale. The company
expects to begin production from a second Geneseo
well soon.
100
Cabot Oil & Gas Corp. maintains its enthusiasm for

the play. Marcellus production averaged more than 700
MMcf/d for the last two weeks in August, hitting a
record 752 MMcf during one 24-hour period.
This production increase was driven by a coordinated
effort to manage field line pressures rather than new well
connections, said Dan O. Dinges, chairman, president,
and CEO in a press release. Our infrastructure provider,
Williams Partners LP, recently completed a series of projects and upgrades that improved the pipeline system
operating efficiency, allowing increased production.
Recently released data from the state of Pennsylvania
showed that the company had 14 of the top 20 producing wells in the first half of 2012. Since the start of our
efforts in Pennsylvania, our cumulative production has
reached 354 Bcf, with only 145 producing horizontal
wells, said Dinges.
The DEP noted that the top five gas producers
Chesapeake Energy Corp., Cabot Oil & Gas, Talisman
Energy USA Inc., Range Resources Corp., and
Anadarko produced 61% of the states total. The
four most productive counties, representing 68% of
production, are Bradford, Susquehanna, Lycoming,
and Tioga.
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UNCONVENTIONAL:
MARCELLUS
In West Virginia, one company that is planning on

increasing its operations in the Marcellus is Antero
Resources. The company is operating 10 drilling rigs
in the play in northern West Virginia. An 11th rig was
being added in August and a 12th rig in October.
Antero has 315 MMcf/d of gross operated production
in the play, of which 98% is coming from 88 horizontal
Marcellus wells. Nineteen horizontal wells are either
being completed or waiting on completion.
The company also has two fully dedicated frac crews
currently working along with spot crews as needed. A
third Antero-dedicated frac crew is scheduled to begin
work in 4Q 2012. In 2Q 2012, Antero completed 13 horizontal Marcellus wells with an average 24-hour peak rate
of 14 MMcf/d and an average lateral length of approximately 2,182 m (7,200 ft).
Antero has 258,000 net acres in the Marcellus shale
play. Only 16% of that acreage was associated with
proved reserves at mid-year 2012.
Citrus Energy now ranks as the No. 10 producer in
Pennsylvania with 14 wells, all in Wyoming County. The
company has the two top wells in the state with only
26,500 leased acres.
Long-term service life
product or service. Additionally, we are building new

locations so we are better equipped to supply resources
when needed, and the goal is to hire and train locally
when possible, he told E&P.
The Marcellus has proven its economic value but is
still in its infancy in terms of lifecycle, so we anticipate
continued activity for the coming decade. We believe
the Marcellus operators will turn to technology to
increase efficiency and maximize their rate of return.
These technological improvements will materialize in
both the drilling and completions phase of the well,
he said.
Other companies pull back

According to EOGs 2Q 2012 report, the company
planned to further decrease its drilling activity on its
dry gas reserves during the second half of 2012 due to
the ongoing weakness in natural gas pricing.
Through active drilling programs in prior years and
2012 to date, EOG has captured strategic natural gas
acreage in the Uinta, Horn River, Barnett, Haynesville,
and Marcellus plays. When natural gas prices rebound,
EOG will hold an attractive portfolio of natural gas
resources for future development, according to its
report.
The service companies still see the Marcellus as an area

Refining impacts, new technology
for continued drilling and development. Many of the
One unexpected impact from the Marcellus boom
operators are migrating toward the liquid producing
has been the turnaround of three refineries in Pennsylareas and are looking for reliable and efficient solutions
to solve their development challenges, said
Weatherford conducts a flow test for an operator in the Marcellus
Thomas Distephano,
shale. (Photo courtesy of Weatherford International)
northeastern general
area manager, Weatherford International.
Weatherford has
operations in Indiana, Illinois, Kentucky, West Virginia,
Pennsylvania, and
Ohio to service
clients in the Marcellus and Utica shale
plays. We are currently moving more
resources to client job
sites in the area, and
in most cases the
additional bodies are
related to an introduction of a new
102
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MARCELLUS
vania. The Marcus Hook crude oil refinery shut down

in December 2011 due to high crude oil prices overseas. In July, Delaware County officials released an IHS
report that recommended renovating the plant to
use Marcellus gas.
Two other refineries have seen changes in ownership
that want to take advantage of the nearby surplus of
gas and liquids. Sunocos Philadelphia refinery was
purchased by the Carlyle Group and is now Philadelphia Energy Solutions. Delta Airlines bought the idled
ConocoPhillips refinery in Trainer to refine jet fuel for
the airline.
On the technology side, EQT Corp. has launched
several different projects that impact the bottom line.
The company began a program to convert the power
generation on drilling rigs to use LNG, displacing the
diesel at the well site. This program marks the first
LNG rig conversion in the Marcellus shale and will
provide a cleaner burning alternative fuel for the
regions drilling operations.
We continually look for opportunities to improve

our operations, and displacing diesel, by introducing
the use of alternatives such as LNG and field gas, is one
way of doing so, stated Steve Schlotterbeck, president,
E&P for EQT, in a press release. LNG is about 40% less
expensive than diesel. The LNG being used for EQTs
pilot program is produced locally from Marcellus natural gas reserves. EQTs initial rig conversion is now
operating in northern West Virginia. A second rig
also has been converted and is now in operation.
EQT also introduced its new fracing design. Its original design called for 91-m (300-ft) stages consisting of
five clusters on 18.2-m (60-ft) spacing. The new design
calls for 45.5-m (150-ft) stages that consist of five clusters on 9.1-m (30-ft) spacing.
The wells using this design have a 40% higher IP and
20% to 25% greater estimated ultimate recovery. The
incremental cost per well is about $1.2 million. The
return on the incremental investment is higher than
100% at a NYMEX gas price of $4 per MMBtu.
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104
Automating the Subsea Field
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2013 will be an exciting year for Roxar as we

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The release of our 3rd generation subsea Multiphase meter
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Fresh Perspectives orr North Americ an I u f r astructure.
As horizontal drilling and multi-stage fracturing technology is applied to Rockies basins, producers are bring ing
tremendous new amounts of hydrocarbons to market . From new Bakken oil destined for the U.S. Gulf Coast to new
NGLs from the wet - gas-filled horizontal Niobrara play, the industry is hurrying to get these supp lies to end users
across the Lower 48. At the Rockies Midstream conference , producers , shippers and end-users will discover how
each is working toward to turn black gold into greenbacks . Join colleagues and other oil and gas professionals as
industry leaders share actionable intelli gence on what lies ahead for infrastructure build-out .
FEATURED SPEAKERS INCLUDE:
Porter Bennett
Ponderosa
Advisors
Tim Carter ,
Xcel Energy
Pn 'sent ecr by :
HA R T E N E RG Y
Bob Clark,
Bear Tracker
Energy
Kristen Holmquist,
Ponderosa
Advisors
Sponso red b y :
MIDSTREAMy,
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James Kleckner
Anadarko
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Steve Moore
Wall Street
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Tad True
Bridger
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James Volker
Whiting
Petroleum Corp.
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DECEMBER 6 , 2012
COLORADO CONVENTION CENTER

DENVER , CO
ROCKI ES MI DSTR EAM.COM
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DECEMBER 6, 2012 - PRELIMINARY CONFERENCE AGENDA

7:00 am
Registration Opens - Breakfast on Exhibit Floor
8:30 am
O pening and Welcome Remarks

John Harpole , Founder and President ,
Mercator Energy LLC
8:40 am
Producer 's Perspective: A Spotli g ht on

Crude in the Bakken
Jim Volker , Chairman and CEO ,
Whiting Petroleum Corp
9:10 am
1:30 pm
The Rockies Producer 's Perspective:

A Spotlight on Natural Gas
Moderator: Paul Hart , Editor,
Midstream Business , Hart Energy
2:00 pm
Roundtable: The Growth of Rockies-S ourced NGLs

Moderator: Kristen Holmquist , Midstream Analyst ,
Ponderosa Advisors
Don Baldridge ,Senior Vice President ,NGL
Marketing and Logistics ,DCP Midstream Partners

Bob Clark , Chairman and CEO , Bear Tracker Energy
Panel: Crude Oil Transport - Getting to Markets
Tad True, Vice President , Bridger Pipeline LLC
10:00 am
Networking Break
10:30 am
The Rockies Producer 's Perspective:
2:45 pm
Networking Break
3:15 pm
Panel: Back to the Future - Marketing Gas in the Rockies

Moderator : John Harpole, Founder and President ,
Mercator Energy LLC
A Spotlight on NGLs
Tim Carter , Director ,Gas Supply, Xcel Energy
James J. Kleckner , Vice President - O perations ,

Anadarko Petroleum Corp.
11:15 am
Panel: Natural Gas in the Rockies
Moderator: Stuart Nance, Vice President ,Market-
Bill Barnett , Vice President ,Nitrogen Projects ,

Dyno Nobel
4:15 pm
Closing Keynote: Porter Bennett ' s Vi ew of the

Future of Rockies Midstream
Porter Bennett , President and CEO ,
Ponderosa Advisors
Freepoint Commodities.
5:00 pm
Networking Reception
Luncheon and Keynote Speaker
Agenda content and timeline subject to change
ing, Bill Barret Corp.

Becca Followill, Managing Director ,
U.S. Capital Advisors
Bryan Hassler , Managing Director ,

12:00 pm
Steve Moore ,Economist , Editorial Board

Member , Wall Street Journal
OFFSHORE
WELL INTERVENTION
Retrieving subsea wells in one trip

Whether they reach their economic limit or suffer irreparable damage, all offshore wells inevitably
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Richard Segura and Delaney Olstad, Weatherford
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demand, which requires a substantial investment in
infrastructure. Whether the equipment resides above
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Dismantling a subsea well and its supporting
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Plug and abandonment operations are viewed as
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The technology is suitable for single-trip cutting
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The system has a maximum 400,000 lb pull capacity
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Greater stability
By latching on to the external profile of the wellhead
high-pressured housing, the system prevents wellhead
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internal latch mechanism, which risks damaging the
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thus making the wellhead unusable, the technologys
grapple arms never contact the internal seals.
BHA schematics for the three MOST tool configurations: These

include compression cutting with marine swivel (left), compression cutting with mud motor (center), and tension cutting
with mud motor (right). (Images courtesy of Weatherford)
108
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reene 's Energy Group
ovides our clients with safe and

liable equipment and services
for drilling , production, pipeline,
tr ee dro v
maintenance, restoration and
construction support for both

onshore and offshore operations.
Greene's services Include:

Drilling Support Equipment
Completion Support Equipment

Pipeline Pre-commissioning
.I:
Facilities Management
Pressure Testing
Pumping Services
Chemical Cleaning and Pigging
Nitrogen,Air and Compression
Services
Equipment Rental
Coiled Tubing Lift Frames
Pre-Commissioning Services
Asset Management
4
,
? : Vii,
+? -y'?
?-
_,
Gas Dehydration Unit Management

Wellhead and Valve Services
We make sure your assets

perform beyond is good enou h"
Greene s
Energy Group, -
www.GreenesEner
4
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.co
OFFSHORE
WELL INTERVENTION
affirmation on complete separation is achieved by simply pulling up on the tool.
Operational principles
The system was specifically designed for deployment
from a semisubmersible rig or monohull vessel. The
technology is easy to apply and set, by lowering it into
position as part of a bottomhole assembly (BHA). The
grapple arms are activated by moving the mandrel body
upwards. The grapple arms then close and engage the
external profile on the subsea wellhead.
The latch and unlatch can be visually confirmed using
an ROV at the seafloor. The mandrel is rotated into the
locked position inside the grapple housing, which is also
visually confirmed via the ROV.
When the cut is made in tension, the grapple arms are
already engaged and latched onto the high-pressure wellhead housing with an overpull of 20,000 lb to 30,000 lb.
Once the cut has been completed, the entire assembly is
pulled out of the hole and landed in the rigs moonpool.
Field-proven system
The unlatched (left) and latched (right) views of the MOST tool
are shown against the external view of the high-pressure wellhead housing.
This system has been deployed in more than 1,500 wells

globally, including in the US Gulf of Mexico (GoM),
Australia, North Sea, Norway, and West Africa.
In the worlds first rigless subsea abandonment, the
system was deployed from a monohull vessel to decommission five subsea wells in the North Sea region. The
This design also provides greater clearance to allow

the cuttings to flow out of the ports and away from the
working mechanism, preventing a swarf
buildup. The external latch provides
support to the wellhead assembly to
eliminate any lateral whipping that
might impede cutting and helps
increase the likelihood that the
retrieved wellheads can be reused
with minimal damage.
Unlike abrasive cutting tools, the
MOST system works reliably at any wellbore depth. In addition, it eliminates
the need for explosives or chemical
agents. By avoiding the preblast protocol that must be followed when using
explosives, the system also can improve
wellsite safety and efficiency.
In addition, shape charges may not
completely sever the pipe on the first
explosion, necessitating a second blast
and raising further safety and environThe MOST tool (pictured) allowed the wellhead to be recovered with the high-pressure
mental risks. By contrast, once the cut
is made with the MOST system, positive and low-pressure housings intact and no damage to the internal profiles.
110
()
FmXPRO
Ex pro
Delivers well flow management
-?
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Siubsea Safety Systems
. 1,1 ; ;
1Anal
si
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Downhole Vide
pad kage of specialised services and products to assist ou

customers achieve their goals across the lifecycle of a well.
Our people are committed to delivering operational excellence t
i it
www.exprogroup .com
at D
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th 51
WELL FLOW MANAGEMENTT
OFFSHORE
WELL INTERVENTION
WELL CONTROL SCHOOL

COMMITTED TO QUALITY...
DELIVERING VALUE!
e_
01
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-LEARNING
COURSES
IADC & API Well Control
(Drilling,Workover/Completion,
Coiled Tubing, Snubbing,Wireline)
GAP Skill Assessment Program
INSTRUCTOR -Led
COURSES
operation marked the worlds first drillpipe-deployed surface recovery and

storage of oil-based drilling fluids.
Crews recovered the 1834-in. subsea wellheads, 30-in. conductor casing,
20-in. casing, and the retrievable guidebase from the seabed in a single
trip. This project was completed in 40 days with no accidents, environmental incidents, or nonproductive time.
The tool also was used to recover an exploratory subsea wellhead off the
coast of western Australia in approximately 1,186 m (3,914 ft) water depth.
After cutting and pulling a 958-in., 53.50-lb/ft production casing string using
a BHA consisting of a cut and pull spear and the M-23 cutter, a second BHA,
including the MOST system, was run to cut and pull 20-in. by 36-in. conductor casing strings and recover the subsea wellhead.
The second BHA, consisting of a 12-in. outer diameter M-24 casing cutter, non-rotating 1714-in. stabilizer, and the MOST tool, was lowered in the
hole and stabbed into the wellhead at 1,186 m (3,891 ft) with an ROV. The
tool latched on to the high-pressure wellhead housing and locked with
30,000 lb overpull. The conductor casing was cut at 1,191 m (3,907 ft)
using sea water and a flow rate of 900 gal/min with 1,600 to 1,840 psi
pump pressure. The cut was completed in four hours, and the wellhead
was released and pulled to the rig floor and laid out.
GoM subsea abandonment

COMING NOVEMBER 2012
IADC & API Well Control
(Drilling, Workover/Completion,
Coiled Tubing, Snubbing, Wireline)
IADC WeIICAP Coiled Tubing

IWCF Well Control
IADC WeIICAP Plus Course

(Trainingfor Deepwater Drilling
Operations)
.
c
-
s-
112
IV".
API
,?P oar
H1 F P
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An operator in the GoM used the system to help permanently abandon a

4,267-m (14,000-ft) subsea well in 95 m (313 ft) of water, fulfilling regulatory requirements for protection of the environment and clearing the
subsea floor. Two separate BHAs were run to cut and retrieve 958-in. and
then 1338 -in. casing strings. After the proper plugs were set, the riser and
BOPs were pulled.
The compression-cut MOST tool with the M-24 cutter dressed to cut 20in. by 30-in. conductor was deployed. An ROV was used to guide the assembly into the wellhead, and the MOST tool engaged the wellhead externally
with its grapple arms locked onto the outer profile. An overpull of 40,000
lb was applied to ensure engagement, and once confirmed, a 10,000-lb
down weight was set on clamps prior to cutting.
Cutting parameters of 900 gal/min at 2,758 psi were established, and the
cut was made 6 m (20 ft) below the mud line. Maximum pump pressure of
3,800 psi was recorded. Mud coming out from around the outside of the
30-in. casing, lateral movement on the wellhead, and a drop in pressure (to
2,850 psi) all gave positive indication that the cut was completed. With an
overpull of 55,000 lb, the wellhead and conductor started to come out of
the seabed. The wellhead and the guide base were successfully recovered
without any damage to the wellhead, allowing it to be reused. The cutting
operation was completed in just over three hours.
These jobs highlight the various options and flexibility that the technology is capable of handling. The shallow-water GoM job was performed with
a smaller, inexpensive semisubmersible rig, and the production string cuts
were done using mud motors as the rig had limited top-drive capabilities.
The deepwater Australian job used a larger semisub with a top drive system
of greater capability. Both these jobs were completed without any safety or
environmental incidents accidents, allowing the wellheads to be efficiently
recovered for reuse.
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`
arc lus Shaleand Utica Shale
OFFSHORE
WELL INTERVENTION
A question of intervention
The market for light well intervention vessels has both opportunities and pitfalls
for new players in equal measure.
Daniel Quarm, Derrick Offshore
he best way of defining the well intervention market,

specifically the light well intervention (LWI) market,
is when well operations and maintenance (except
drilling) are carried out on a live well without a riser.
Well intervention is used to increase the productivity
and lifespan of wells and has been proven to add years to
a wells productive life. Typically, these types of operations
have been performed from a drilling rig, but in an effort
to reduce costs, LWI methods using a monohull vessel
have been in development for some time. The benefits of
this method include being able to move quickly from one
well to another, which reduces production downtime, and
also the lower dayrate costs of a monohull vessel compared to a drilling rig (especially for deep water).
New technology developers nearly always expect the
market to rave over their new products, but oil companies have been apparently reluctant to back unproven
technologies, which has led to several companies bankrupting themselves in the process.
AX-S
The most recent casualty has been UK-based Expro AX-S,
which recently entered administration after spending the
past two years and an estimated US $200 million trying to
fine-tune its AX-S system, which it had fitted to the subsea
vessel Havila Phoenix. Expro had recently secured its first
major contract in the LWI market, but it was too little too
late. BG Group had awarded the company a rolling contract with the potential for an extended intervention
campaign, which was due to start in October this year.
This was not soon enough for the Aberdeen-based company, which had been paying approximately $90,000 to
$100,000 per day for the vessel and other extras such as
ROVs, with roughly half just being for the base vessel.
The vessel has now been returned to Fugro-TSM, which
is chartering the vessel from Havila Shipping but has yet
to decide upon its future.
The administrators KPMG are seeking buyers for
Expro AX-S (the Expro Group is unaffected), and there
are several companies out there who might be interested
in taking on the system, which has the selling point of
114
Helix, currently building a new version of its Q4000 semisub unit

for deepwater well intervention work at a cost of $385 million,
also has leased the Skandi Constructor for three years for the
well intervention market. (Photo courtesy of Helix)
being able to work in deeper water than most other LWI

systems. One such company is Cameron, which has been
trying to enter the market but has until now found it too
capital-intensive. It may now find this opportunity more
favorable as the AX-S system is a fair way along its testing
phase and apparently nearing operational readiness
with its BG contract award.
Other potential buyers include rivals such as FMC
Technologies, Helix Well Ops, Baker Hughes, and
Schlumberger, all of which already have their own systems. There also are plenty of other subsea engineering
companies out there who have an interest in the intervention market.
Recent market developments indicate that this casualty will not have a major impact on the competition as
they already have begun their expansion programs in
recent months, mostly on the back of contracts with
major oil companies.
New contracts
Statoil has contracted Aker Solutions and Eide Marine
Services for newbuild semisubmersible intervention vessels, which will work with the Norwegian operator for
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NETWORK: Top Executives from Australia and the United
Matthew Battrick
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Willis
OFFSHORE
WELL INTERVENTION
eight years after delivery plus six years of options. The

state-owned oil company also has extended its contract
with Island Offshore for the Island Frontier (which uses an
FMC Technologies intervention system) for a further five
years in direct continuation of its current contract.
Helix, through its Well Ops subsidiary, has contracted
Sembcorp to build a new version of its current semisubmersible unit Q4000 at a cost of $385.5 million, due to
enter the market in 2015. Helix also has purchased a drillship, Discoverer 534, from Transocean, which it will convert for well intervention duties at a cost of $180 million,
including the vessel cost, intervention tower, and conversion. Those vessels will be focused on the market in the
GoM, while for Helixs European and West Africa division
it has added the Skandi Constructor to its fleet for three
years starting from 1Q 2013, giving it time to build and
test an intervention tower for the vessel.
Aker Solutions, apart from its newbuild semisubmersible vessel for Statoil, is looking to consolidate its
position in the LWI market after it recently secured a
contract with Total E&P Angola to provide intervention
services for two years using the vessel Skandi Aker, which
had been seeking a long-term contract for some time.
Another of Akers vessels, Skandi Santos, has been working for Petrobras installing subsea trees and will continue
with the Brazilian major for a few more years. Its other
vessel, the Aker Wayfarer (a sister ship to the Skandi Aker),
has not had an intervention tower installed yet, although
Aker maintains that this is the plan for the vessel.
Aker has been working on the construction vessel spot
market mostly and has managed a fairly consistent utilization level, although its current work scope is coming to
an end with no future commitments. It may be more willing to move the vessel into the intervention market now
that Aker has secured the $250 million contract from

Total E&P Angola.
Barriers to entry
Any newcomers into the LWI market will have to compete
with these three players who all have long-term contracts
in place, as well as Eide Marine Services. The latter has
managed to break into the market with its own eight-year
contract to supply a hybrid design Category A LWI vessel
for Statoil, although whether the company has the ability
to maintain its market position remains to be seen.
There are many companies out there that may have the
technology to enter the LWI vessel market. The question
is whether they have the capital and cash flow to prove
their technology before they are awarded a long-term contract by a major company or if they can convince smaller
oil companies to take the risk of backing them.
LEFT: Statoil earlier this year opted for Eide Marine Services innovative hybrid Category A semisubmersible
vessel for an initial eight-year LWI term of service. The
first of its kind, the vessel hull is nearing completion in
China before it heads for STX in Finland for outfitting.
(Image courtesy of Eide Marine Services)
ABOVE: Aker Oilfield Services Skandi Aker is the first
well service vessel of its kind capable of performing
riser-based subsea well intervention in deep and ultradeep waters. Its first contract will be for Total E&P
Angola offshore Angola starting early in 2013. (Photo
courtesy of Aker Solutions)
116
OPTIMIZING RESERVOIR DRAINAGE / INTERVENTIONS
OUR
TRACK
RECORD
GOES A LONG WAY
YEARS CONVEYING TOOLS
AND SERVICES
YEARS RUNNING
MECHANICAL INTERVENTIONS
,
I
'
YEARS CLEANING-OUT WELLS

YEARS PERFORMING
MILLING SERVICES
10,000 .000
9.000,000
8,000,000
7.000,000
6.000,000
As the first company to introduce a- line interven-
5.000,000
tions , Welltec " has amassed an impressive track
4.000,000
record across a wide range of intervention solutions:
3.000,000
2.000,000
1.000 ,000
1996
1997
1996
1999
2000
2001
2002
2003
2009
2005
2006 2007
3008
2009
200
2011
2012
'Ulf
years performing milling services
years cleaning out wells
10 years running mechanical interventions

17 years conveying t o o l s a n d services
Wel ltec
tech
WATCH
Isolation system
shuts down gas migration
A new swellable system uses proprietary elastomer technology to effectively
seal off micro-annular voids.
tion. Planning for these problems is complicated by differences in wellbore fluids and downhole temperatures,
which affect swelling and compatibility.
hallow gas migration through cement, in which gas
Conventional elastomers tend to swell only in the presfrom a shallow zone migrates to the surface before the
ence of a single fluid phase oil or water and, dependcement can properly harden, affects zonal isolation and
ing on the downhole temperature, may swell too slowly to
has been a major source of problems for many years. It is
isolate the wellbore prior to gas migration. The proprinot easy to prevent the micro-annular gas fissures or peretary hybrid elastomers used in the isolation system
manent flow channels to the surface created due to this
demonstrate greater flexibility and are activated by oil,
migration. Because they occur at shallow to medium
water, wet gas, or a combination of any of these to condepths, it is difficult to maintain sufficient hydrostatic
form to and seal off the micro-annulus. The elastomers
pressure while the cement is still in a liquid state, and
also are designed to swell only when they are in place to
lower temperatures near the surface extend the transition
avoid rapid reaction with wellbore fluid during deployperiod from the cements liquid to elastic-solid state. In
ment on the pipe or with the mix water in the cement
applications where the well is going to be fractured, the
while it is curing.
problem can be further compounded due to balThe MSIS-Unit is the central system compolooning and contraction of the pipe from the
nent. When combined with other mechanical
fracing pressure cycles.
cementing products, the unit can provide excelThis is becoming a particularly difficult problent casing standoff and highly efficient displacelem as operators continue to push into unconment of mud during primary cementing
ventional shale plays characterized by a large
operations for improved wellbore stability in both
number of natural fractures. Solutions that can
regular and irregular annular geometries.
effectively, economically, and permanently isoThe systems ultimate goal is to create at
late these zones and allow the cement to
least one point in the well where total annular
harden thoroughly prior to the onset of gas
isolation is achieved. However, the traditional
migration are becoming increasingly critical
deployment scenario consists of strategically
to the long-term viability of the well.
positioning multiple tools on cemented pipe to
Weatherfords swellable Micro-Seal isolation
provide a series of response points to ensure that
system (MSIS) prevents fluid and pressure
fluid migration is stopped wherever it may occur.
migration because of its proprietary hybrid
The customizable system comprises of a family
swellable elastomer that conforms to and
of elastomers and centralizer designs for deployseals against micro-annular voids between
ment in a range of wellbore geometries and reserthe cement sheath inner diameter and the
voir temperatures. The elastomer is available in a
casing outer diameter.
slow-swelling form for deployment in wells with
ambient temperatures of 66C up to 150C (150F
Conforming to the problem
to 300F) to prevent premature swelling and stickWhile swellable elastomers have demonstrated
ing prior to arriving at the designated isolation
an ability to isolate wellbores in many types
point. For wells in the range of 38C (100F)
The bow string, as part
of wells, a range of construction challenges
or lower, another elastomer can be used to
of the isolation system,
complicates isolation performance when conswell more quickly and provide faster microhelps to enhance annular annular isolation.
ventional elastomers are used. These chalisolation. (Images courlenges range from short-term stimulation
The suitable elastomer is selected for each
tesy of Weatherford)
concerns to long-term micro-annulus isolawell after comprehensive screening tests durDavid Westgard, Weatherford
118
tech
WATCH
The MSIS provides customized, swellable wellbore isolation

while preventing micro-annular fluid and pressure migration.
ing the planning stage, in which the elastomer packer

seals are tested in actual well fluids for criteria including
fluid compatibility, life expectancy, bond strength, swell
ratio and elongation, and shear. With this information, an
optimal elastomer is chosen that not only enables swelling
times to be properly managed during deployment but
also maintains a high-integrity seal during its required
operating life.
The MSIS-Unit consists of a slip-on seal unit that is effective as a standalone product. It also can be deployed with
one of several centralizers, depending on the wellbore.
The MSIS-Bow is a slip-on bow-spring centralizer designed
to provide optimal casing standoff in appropriate casedhole and openhole sections. Finally, the MSIS-Rigid is
a slip-on rigid centralizer with axial or biased blades
designed to optimize mud displacement in vertical,
inclined, or horizontal wells. The ultimate result of each
of these designs is better mud removal during primary
cementing operations for improved wellbore stability.
The swellable isolation system has demonstrated
improved wellbore quality while reducing the frequency of interventions and
remedial cementing operations. Strategic positioning of multiple systems
across the expected problem area also
has been shown to prevent buildup of
annular casing pressure, which reduces
or eliminates the need to bleed off at
the wellhead.
annuli created during or after cementing operations or

following fracture stimulation.
The isolation units are deployed with a bow centralizer
design on 1134-in., 958-in., 858-in., and 512-in. casing/liner
strings in open holes ranging from 812 in. to 14 in. As of
September 2012, the units have been deployed in more
than 70 wells in the field and have consistently prevented
gas migration to the surface.
The technology has been implemented elsewhere,
including offshore Angola, for an oil producer looking
for a way to shut off potential water migration along annular voids in an 812-in. hole with 7-in. casing cement sheath.
This operator deployed the MSIS-Rigid at 3,271 m (10,733
ft), providing isolation above and below the oil/water
contact zones and the oil-bearing zones at an inclination
angle of 28. To date, the installed casing string and units
have successfully isolated water migration per the clients
production program.
The MSIS-Bow also has been deployed for a gas producer in the Middle East who wanted to mitigate against
sustained annulus pressure and shut off potential pressure migration in a well. Several systems were installed
on the 9.63-in. casing string inside 13.38-in. casing, at
key points along a 27 to 31 interval to provide a series
of response points for potential gas migration. The systems integrated centralizer provided maximum casing
standoff for mud displacement during cementing operations, and the combined action of the strategically placed
units prevented the need for the remedial cementing
operations that are typically required due to micro-annular pressure migration. Since this initial deployment, the
operator has deployed similar MSIS-Bow units on six
other wells in the region.
Field tests proving potential

To date, more than 1,000 of these systems have effectively and efficiently shut
off gas migration along the micro-annuli
in cemented liners, including use in
many US shale gas plays like the Marcellus. Producers in this region needed
a long-term solution to isolate microEPmag.com | November 2012
The companys swellable elastomers yield many benefits and are formulated to
meet an operators specific operational environment objectives.
119
tech
TRENDS
High-temperature downhole pumps

extend PCP application
High temperatures in wells have
often prevented
operators from
applying progressing cavity pumps
(PCPs) in downhole operations.
Robbins & Myers
Energy Services
The line of HTD pumps provides solutions
Group now proto high-temperature applications that
vides a line of
high-temperature previously prevented operators from
downhole pumps, using downhole PCPs. (Image courtesy of
Robbins & Myers Energy Services Group)
the Moyno HTD
pumps, to withstand the complications of high-temperature situations when applying
PCPs. The companys Moyno HTD350 and HTD600 hightemperature downhole pumps feature an elastomeric stator that is mechanically secured to the stator tube as well
as an all-metallic stator that enables resistance to chemicals and the ability to handle high temperatures. Because
of their capabilities of withstanding high downhole temperatures, these pumps are able to extend the application
range of PCPs. The HTD350 technology is designed to
mechanically secure the stator elastomer without using
bonding agents between the elastomer and the stator
tube. The Moyno HTD600 is an all-metallic stator that is
compatible with steam injection applications without having to remove the stator from the well. The Moyno HTD
series are available in a variety of models to suit a range of
applications. rmenergy.com.
pulling process. The latch can then be locked into the

release position using an integral J-slot mechanism to
revert the connection into pivot mode. peakwellsystems.com.
Repair system seals damage

on outer sheath of flexible risers
According to Flexlife, about 35% of risers may contain
damage to the outer sheath, which increases the risk of corrosion from the surrounding oxygenated seawater. Instead
of replacing the sheath, the company suggests the use of its
Armadillo technology. This repair system is designed to
create a seal that will prevent seawater entering the risers
annulus. The system is constructed in bespoke lengths and
diameters, allowing continuous operation of the flexible
pipe. In an offshore operational demonstration in Brazil,
the technology was applied on a gas-lift riser in a semisubmersible production platform. It was installed at a 4-m (13ft) water depth and endured a pressure test of 2.5 bar in
the annulus. According to the company, the pressure test
proved the integrity of the repair, confirming the technologys capabilities. flexlife.co.uk.
Flexlife engineers handle Armadillo technology in Flexlifes

Aberdeen R&D facilities. (Image courtesy of Flexlife)
Connection tool facilitates rigid assemblies

Peak Well Systems 90 Degree Safe Connect tool uses a pivoting design to enable extended-length rigid assemblies to
be safely and securely raised or lowered between horizontal and vertical positions during deployment into the well
and removal from a well. This can prevent undue stress
and bending that causes damage to wire and tool components and potential harm to personnel should the wire or
tool component fail, according to the company.
The tool is connected directly above the long assembly in
the horizontal position and provides a hinge or pivot when
being raised into the vertical position. Once the item is in a
vertical position, an internal latch automatically locks the
connection. This produces a rigid tool that can sustain
both upward and downward jarring during any setting or
120
Shale technology increases reservoir contact

Baker Hughes FracPoint MP sleeve with DirectConnect
offers more controlled hydraulic fracture initiation points
and improves connectivity to the pay zone, allowing
increased contact with the reservoir. The technology does
this by using openhole packers to isolate multiple stages
and ball-activated sleeves to divert the fracturing treatment
into the formation. A single ball opens five sleeves per
stage, each sleeve including eight DirectConnect ports
that are placed 45 apart.
At each stage in the hydraulic fracturing process, a ball
is dropped. The sleeves open, and hydraulic pressure
pushes the telescoping DirectConnect ports into the formation at high velocity. According to the company, the
tech
TRENDS
ports act like chisels to initiate fractures at controlled

points along the wellbore, resulting in an accurate placement of the hydraulic fracture treatment and a better connectivity to the reservoir. Operators are able to fracture
through five sleeves per stage with as many as 17 stages per
well, connecting with the reservoir through as many as 85
sleeves and 680 ports, said the company. bakerhughes.com.
Drilling fluid
remains stable
to ensure quality
reservoir characterization
The new RHADIANT
ultra-high temperature
non-aqueous drilling
fluid system from MISWACO, a Schlumberger company,
eliminates drilling fluid
The ultra-high temperature non-aqueproduct degradation,
prevents wellbore con- ous drilling fluid system is the first
trol issues, and provides drilling fluid proven to deliver stable
rheological performance at bottoma thin filter cake for
enhanced logging con- hole temperatures approaching
ditions. Unlike conven- 260C (500F), according to the company. (Image courtesy of MI-SWACO)
tional non-aqueous
drilling fluids, the system prevents barite sag and stuck pipe, according to the
company. The drilling fluid system maintains a stable rheological profile and extreme temperature stability during
prolonged static conditions throughout well construction
and openhole logging, with little maintenance necessary.
Ultra-thin and slick filter cake deposits and the stable rheologies clear the path for logging, casing, and cementing
operations, thus enabling accurate perforation placement,
optimized completions, and quality reservoir characterization, according to the company.
The technology was used in an ultra-high temperature
exploration well in the Gulf of Thailand, where, with zero
lost circulation, it effectively delivered filtration control
and filter cake quality with stable rheological properties.
Even though the fluid remained static for more than 90
hours, the customer was able to perform seven openhole
wireline logging runs when using the drilling fluid system.
Monitoring system measures microseismic

events during hydraulic fracturing
ESG Solutions Hybrid Downhole/Near-surface microseismic monitoring system addresses recent concerns surrounding the potential of oil and gas operations to induce
larger magnitude events. According to the company, this

technology fills a need to accurately detect seismicity
greater than M0 in addition to small-scale microseismic
activity. It deploys near-surface or shallow buried microseismic arrays. Geophones, the conventional tool used to
measure micro-earthquakes, may not be optimized like
the companys new microseismic monitoring system to
record the lower frequency signals, some in the range of M4 to M0, or to record the larger frequency signals, some
in the range of M0 to M4. The hybrid tool combines its
near-surface microseismic arrays with a network of vertical
downhole tool strings to increase the physical field of coverage and more accurately measure the events of larger
magnitude. esgsolutions.com.
Integrated reservoir engineering

software suite improves decision-making
The Roxar Tempest 7.0 by Emerson Process Management
provides a single consistent interface to E&P reservoir
engineers, encompassing five modules that can be
deployed as an integrated unit with a common interface
or individually to enhance existing workflows. This version builds on the previous versions of the companys simulation and history matching software. The modules
include:
The Tempest VIEW, capable of processing results
from multiple simulations with millions of cells and
thousands of wells;
The Tempest ENABLE, a history matching and uncertainty estimation software solution that harnesses the
simulator to drive it through hundreds of realizations
and to steer it to deliver better quality history matches
and more reliable uncertainty estimates;
The Tempest MORE, a full physics simulator that can
be optimized for very large models;
The Tempest PVTx, an equation-of-state pressure-volume-temperature analysis tool, which facilitates the
characterization of black oil or compositional fluids;
and
The Tempest VENTURE, an economic evaluation
tool, which provides cash flow analysis derived from
simulation results to allow the incorporation of inflation rates, prices, currencies, costs, taxes, and other
variables.
This software is for use on all types of reservoirs and
geologies. According to the company, it is ideal for unconventional and EOR studies such as CO2 injection, coalbed
methane, steam-assisted gravity drainage, and shale gas
fields. emerson.com.
Cody zcan, Assistant Editor
121
REGIONAL REPORT:
ASIA PACIFIC
Asia-Pacific region poised

for huge growth in investments
Capex levels in Asia are forecast to continue to recover after stagnating between 2006 and 2009.
Scott Weeden, Senior Editor
ven with heightened political tensions between countries bordering the East China and South China seas,
the Asia-Pacific region is set for unprecedented growth
as demand for natural gas and oil continues to surge
upwards.
As the world and the region continue to search for
undiscovered hydrocarbon resources and to maximize
already developed fields, capex investments in E&P activities are important for long-term producing countries like
Malaysia to tackle production declines and continue to
compete with new players, as smaller countries, such as
Brunei, Bangladesh, and Myanmar, come into the market, said Dr. Arnis Judzis, Offshore Technology Conference (OTC) board of directors representative, at the
opening of OTC Asia 2012 Oct. 2.
Asia is becoming increasingly important in the world
of oil and gas exploration and drilling. The region is supported by strong fundamentals including sustained high
rates of economic growth and high oil prices, leading
many international operators to expand oil E&P activity in
a region with a rapidly growing thirst for energy, he said.
Asia-Pacifics offshore resource development, which
already accounts for almost 30% of the 306 E&P projects
worldwide, is poised for aggressive growth in the next five
years, according to an offshore oil and gas market analysis
provided by Infield Systems Ltd.s, Regional Perspectives
Offshore Asia Oil and Gas Market Report to 2015, which
was commissioned by the OTC board.
Forecasters estimated that between 2011 and 2015,
US $87 billion would be spent in the region. The largest
capex increase in the region is expected to be for projects
offshore Malaysia at more than $59 billion even ahead
of China and India. An estimated 84 fixed deepwater
platforms and eight FPSOs will be installed offshore
Malaysia between 2011 and 2015.
As the demand for fixed, floating, and subsea units
continues to rise, we envision the players here making
technological leaps in drilling, exploration, production,
and environmental protection over the next few years,
Judzis said.
122
Asia is expected to be the largest fixed-platform market over

the next five years in terms of capex.
Added the Infield authors, Despite this expected surge

in demand, it is unlikely that the regions largest countries will be able to reduce their dependency on crude
imports, giving further support to exploration and production activity in the long run. Meanwhile, new oil frontiers are being opened up in deeper waters and also in
countries such as the Philippines and Myanmar, which
did not previously have any significant levels of offshore
activity. These developments are expected to greatly
increase demand for subsea units in a region traditionally
dominated by shallow-water production.
Regional capex growth

Malaysia and Indonesia face production decline if they
do not take steps to maintain E&P activity.
In Indonesia, producers are expected to increase
capex on Indonesian projects from the $8 billion spent
between 2006 to 2010 to more than $12 billion forecast
for 2011 to 2015, according to the report.
Projects offshore Malaysia are expected to see the
largest increase between forecast periods, with more than
$17 billion forecast over the next five years. Meanwhile,
China and India are expected to be in second and third
place around the world with $13.5 billion and $13.1 billion in spending, respectively.
A wealth of undeveloped gas reserves and continued
increases in demand from the region will drive capex
REGIONAL REPORT:
ASIA PACIFIC
Some 49 FPS installations are expected, primarily in

Indonesia (13 units), Vietnam (12 units), and Malaysia
(eight units).
Over the next five years, other smaller Asian countries
are expected to come into the FPS market, including
Brunei, Bangladesh, and Myanmar. With this extra
demand, floater capex is expected to increase by 42%
between 2011 and 2015.
Pipeline, subsea markets

Although shallow-water rigs like Seadrills jackup West Defender
will continue to have a market in Southeast Asia, Indonesia,
Malaysia, and the Philippines are all expected to move into deep
water. (Photo courtesy of Seadrill)
spending in Australia to more than $4 billion per annum

over the next five years.
Capex levels on pipeline and fixed platform developments will take up the regions largest proportion of
regional expenditures. Pipeline capex is expected to total
more than $42 billion, with fixed-platform costs forecast at
$27 billion over the same period.
Subsea capex will see strong growth, from more than $2
billion in the period 2006 to 2010 to more than $7 billion
for the next five years, according to the report.
Fixed-platform market
Asia is expected to be the largest fixed-platform market
over the next five years in terms of capex. Forecasts indicate that the region will take up almost 31% of the global
market between 2011 and 2015 or $27.5 billion out of
$89.8 billion, according to the report.
The greatest expenditure and units will be directed
towards projects offshore China, Malaysia, and Thailand.
China is expected to install 78 units with a capex of $5.7
billion, while Malaysia is expected to install 84 units costing more than $4.4 billion.
Asia is expected to install 459 fixed platforms between
2011 and 2015, with the vast majority of units expected to
be pile-type (434 platforms out of 459 fixed units), mostly
for shallow-water developments. Drilling in deep water offshore China, India, Indonesia, and Malaysia is expected to
speed up, the report continued.
In terms of capex, the Asian pipeline market represents

the largest segment of oil and gas expenditure in Asia.
Between 2011 and 2015, the reports forecasts show that
the region will see more than $42 billion in spending.
Projects based in Malaysia and India are expected to be
the driving forces behind capex in the region, with operators predicted to spend more than $7.2 billion and $7.1
billion, respectively.
Overall, pipelines forecast for 2011 to 2015 exceed what
was installed in the previous five years by almost 50%.
The Asian subsea market is the third smallest in the
world, since many of the developments are in shallow
water that negates the need for subsea infrastructure.
Capex expenditure is expected to be just more than $7
billion on subsea projects between 2011 and 2015 compared to $2.25 billion over the previous five years. Within
the region, the countries that are expected to drive subsea
demand include Malaysia, Indonesia, China, and India,
according to the report.
Malaysia and Indonesia are the regional subsea drivers
and are expected to require 57 and 45 subsea trees over
the next five years, respectively. China and India also are
expected to be significant demand drivers, requiring 42
and 38 subsea trees, respectively.
Floating production systems market

Compared with other regions, capex on floating production units in Asia is ranked the second lowest in the forecast period, ahead of only the Middle East and Caspian
regions, stated the report. Overall, during the 2011 to
2015 period, forecasts suggest that just less than $7.2 billion will be invested.
China has gained experience with its offshore operations in the

Bohai Bay and will be expanding into deeper water. (Photo courtesy of ConocoPhillips)
123
REGIONAL REPORT:
ASIA PACIFIC
Boundary conflicts could derail plans
islative assembly on the Paracel Islands, which also are

claimed by Vietnam. The move added to the tensions
between the two countries.
The Philippines also weighed in on the dispute Sept.
5 by renaming the waters west of that country. The area
is now the West Philippine Sea, according to Philippine
President Benigno Aquino III. He ordered all maps to
be redrawn using the new name for the area west of the
Philippines, including the contested Spratly Islands
and the Scarborough Shoal, which are prime areas
for exploration.
In April, China and the Philippines were in a confrontation over the Scarborough Shoal. The new West Philippine Sea is supposed to boost the Philippines claim to
the OCS. Planned drilling operations offshore Vietnam
and the Philippines could bring the matter to a head.
How the countries deal with these conflicts could have
an impact on oil and gas companies far beyond just those
regions. If these become armed confrontations, oil prices
could skyrocket.
Attempts to occupy islands by Japanese and Chinese protesters have heightened the conflict over maritime boundaries in the East and South China seas. Japan, Vietnam,
Malaysia, and the Philippines are facing off with China
over which country owns what part of the Outer Continental Shelf (OCS).
As the demand for oil and gas in the region continues
to grow, these conflicts over potential petroleum resources
are becoming more threatening. The China-Japan confrontation is getting the biggest headlines currently, but
leasing activity offshore Vietnam and the Philippines is
heating up the confrontations as well.
CNOOC recently offered 22 blocks in the South China
Sea, much to the consternation of Vietnam. Nine of the
blocks, according to Vietnam, are within the Vietnamese
exclusive economic zone. The blocks are well south of
mainland China; thus the OCS claim for China would be
difficult to determine.
In July, China put a military garrison along with a leg-
Statement of Ownership, Management, and Circulation
UNITEDS TATES
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PIGS MultiClient
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REGIONAL REPORT:
ASIA PACIFIC
MegaProject gives the big picture

in Makassar Straits
An interpretation project that ties basins together from East Java to Muara could be the key to
understanding the regional framework and exploring for new prospectivity.
Tad Choi, Andrew Botsford, and Larry Endebrock, PGS
he East Java-Makassar-Muara (EJMM) MegaProject

consists of 98 2-D lines totaling more than 16,000 km
(9,941 miles), covering the four hydrocarbon-bearing
basins: East Java/North Lombok, South Makassar, the
Kutei/North Makassar, and the frontier Muara basins.
It combines five separate long offset 2-D surveys
acquired by PGS and MultiClient Geophysical between
2005 and 2010 into a single consistent time-, phase-, and
amplitude-matched seismic dataset. The interpretation
of the EJMM MegaProject dataset has been undertaken
post-data merge to provide an improved, consistent, and
FIGURE 1. The black lines indicate the EJMM MegaProject. The

gray lines are other PGS 2-D data. This Tertiary isochron map
defines the North Lombok, South Makassar, North Makassar,
and Muara basins. (Images courtesy of PGS)
126
comprehensive interpretation by tying wells to a common

2-D seismic database.
The 2-D grid ties the basins together and intersects
several key wells. It gives the ability to obtain a regional
geological perspective to help evaluate proven and new
plays, look at the petroleum systems at the regional scale,
understand recent well results, and correlate key stratigraphic elements across the basins to better understand
the lateral continuity of sequences and structural development of the basins.
Regional geologic setting

The EJMM MegaProject covers four Tertiary basins
along the eastern margins of the Sundaland Craton in
the tectonically complex area between the island of Java
to the south and the islands of Borneo and Sulawesi to
the north, all of which are affected by the collision of
Eurasia with the Australian and Pacific plates.
From the Early Cretaceous to no later than the Early
Eocene, the area experienced periodic episodes of extension and compression, which have resulted in the current
configuration of the basins. This dataset has been constructed to study the back arc East Java/North Lombok
basins in the southern zone of the data and the South
and North Makassar basins, which extend northward to
the contiguous Muara basin around the northeastern
edge of Borneo.
All of the basins in the EJMM MegaProject contain
thick Tertiary sections. An isochron map between seabed
and top pre-rift (basement) defines the Tertiary depocenters. North Lombok, South Makassar, and North Makassar basins are clearly defined, whereas the Muara basins
complexity is shown (Figure 1). The stratigraphy of these
basins is very similar, with both syn-rift and sag contributing to the deposition of Paleocene-Eocene clastics, which
are overlain by Eocene-Oligocene reefal complexes
buried by thick Miocene-Recent packages.
All of the basins have undergone various degrees of
extensional and compressional tectonics, resulting in
a range of possible exploration targets, from simple
inverted basin floor fans or stratigraphic pinchouts to
intricate thrust-fold complexes resulting from more
REGIONAL REPORT:
ASIA PACIFIC
intense deformation as the Australian continental plate

collided with the continental Eurasian plate.
Seismic interpretation
Six key horizons were interpreted for this project. Five
of these are major unconformities, regional seismic
markers that have been tied to formation tops where
well data is available. Due to the nature of these markers, interpreting horizons away from the well ties was
generally straightforward over most of the project area
except in zones of major compression and inversion
where either the horizon has been eroded or the tectonic complexity prevents accurate imaging by the seismic data.
A simplified stratigraphic column has been prepared
FIGURE 2. This simplified stratigraphic column shows the litholofor the EJMM MegaProject area. This shows the key
gies across the basins and the relationship of the horizons in
lithological descriptions of the four main basins (East
this project.
Java/North Lombok, South Makassar, North Makassar,
and Muara basins) and their relationship to the horiAdvantages of a MegaProject when exploring
zons picked (Figure 2).
The EJMM MegaProject gives new entrants and existing
The seabed horizon was picked as the first continuous
operators the opportunity to regionally evaluate the geotrough on all the 2-D lines across the project area. The
logical concepts and hydrocarbon play elements of these
importance of picking this reflector is mainly for calculatTertiary basins on a single 2-D seismic dataset. It enables
ing time thickness maps. The Early Pliocene Unconfortying key wells, understanding recent well results, and
mity, related to the collision of the Australian continental
correlating stratigraphy across the basins to help derisk
plate with the Eurasian continental plate, is the shallowest
decisions and high-grade prospective areas.
horizon picked. The Mid-Miocene Unconformity is an
The main aim is to be able to evaluate basins at the
extensive marker that correlates to a major eustatic sea
big picture regional scale instead of postage stamp
level fall and the spreading of the South China Sea. It
evaluations. A continuous 2-D section approximately
reflects transpressional inversions related to a number
2,000 km (1,242 miles) long shows how the four basins
of local and regional collisional events, primarily along
can be seen in one section (Figure 3).
basin edges. Post-rift thermal sag was initiated in the
Late Eocene and continued through the Oligocene
into the Early Miocene. The Top Oligocene
horizon defines the end of this rift/sag period
and the onset of inversion as the front edge of
the Australian Plate makes contact with the
Eurasian Plate. It marks the end of oil-prone
lacustrine and deltaic petroleum systems and
the beginning of the development of shallow
to deep marine systems.
The Eocene Unconformity is a rifting surface
related to the initial collision of the IndianAustralian plate with Eurasia and the beginning
of the spreading of the Celebes Sea.
The top pre-rift pick marks the base Tertiary.
There are only a couple of well ties for this
horizon in the South Makassar basin. The geoFIGURE 3. The North Makassar and South Makassar basins are shown here in
logical age of the pre-rift section is equivocal,
usually labeled as Pre-Tertiary but postulated to the higher image in one continuous seismic section, while all four Tertiary
be at least Mesozoic and likely to be even older, basins of the EJMM MegaProject are shown in one continuous seismic section
in the lower image.
possibly ranging to Pre-Cambrian.
127
international
HIGHLIGHTS
For additional
information on
these projects
and other global
developments:
READ MORE ONLINE
EPmag.com
EUROPE
Irelands Kish Bank to be explored

Irish explorer Providence Resources has been awarded a
Foreshore License over an area in the Kish Bank basin
offshore Dublin. The license was awarded by the Foreshore Unit of the Irish Department of Environment,
Community, and Local Government and permits a 2-D
seismic program and a wellsite survey as well as the
drilling of an exploration well on the Dalkey Island
prospect, located in Exploration License 2/11. Providence holds a 50% interest as operator in SEL 2/11
with its partner PSE Seven Heads Ltd., a wholly-owned
subsidiary of Malaysias Petronas.
Barents Sea boost for Eni
Italys Eni has hit gas and condensate with its first wildcat
in production license 533 in the Barents Sea offshore
Norway. Eni Norge AS, the operator of PL 533, completed the drilling of well 7220/10-1 with the Norwegian
Petroleum Directorate estimating the size of the find
at between 5 MMcm and 7 MMcm of recoverable oil
equivalent. The wildcat well, dubbed Salina, is located
50 km (31 miles) northwest of the Snhvit field. In the
primary target, a 38-m (125-ft) gas/condensate column
was encountered in the Knurr formation. In the secondary target, a 54-m (177-ft) gas/condensate column was
encountered in the St formation. Further delineation
of the discovery will be considered. The well was drilled
to a vertical depth of 2,371 m (7,779 ft) and terminated
in the Snadd formation in the Upper Triassic. The probe
was drilled by the Scarabeo 8 rig in 348 m (1,142 ft) water
depth, with the well to be permanently plugged and
abandoned. Eni operates PL 533 with a 40% interest,
with its partners Lundin, Det Norske, and RWE Dea
holding 20% each.
AFRICA
Eni mulls floater for Ghana
Italys Eni is considering a fast-track early production
development using an FPSO for its first deepwater oil discovery offshore Ghana. The state-owned operator confirmed that its first crude discovery in the Offshore Cape
128
Three Points (OCTP) block in the Tano basin has the

potential for a commercial development because of
the presence of oil as well as gas and condensates. The
Sankofa East-1X well hit 28 m (92 ft) of gas and condensate. But crucially, it also hit 76 m (249 ft) of gross oil pay.
Eni is immediately planning to spud further appraisal
wells to delineate the size of the find. The Sankofa East1X well was drilled to a total depth of 3,650 m (11,976 ft)
in 825 m (2,707 ft) of water, with a production test flowing 5,000 b/d of high-quality oil. Eni also said that there
are ongoing engineering studies for the development
and commercialization of the blocks non-associated
gas reserves. Eni, through its subsidiary Eni Ghana E&P
Ltd., is the operator of the OCTP block with a 47.22%
share. Its partners are Vitol Upstream Ghana Ltd.
(37.78%) and GNPC (15%).
Maersk hits Angolan oil
Denmarks Maersk Oil has hit more oil in a deepwater
concession offshore Angola, with the company and its
partners planning to carry out further appraisal and
evaluation work. The companys subsidiary Maersk Oil
Angola A/S, together with concessionaire Sonangol E.P.
and partners Sonangol P&P and Odebrecht Oil and Gas
Angola Ltd., said it had successfully completed drilling
the Caporolo-1 wildcat in the Lower Congo Basin with
positive results. Caporolo-1 is a step-out exploration well
on a separate structure adjacent to, and not part of, the
existing Chissonga discovery in Block 16. A production
test was conducted, which flowed at a maximum rate of
3,000 b/d of oil on a 3664-inch choke size. The well was
drilled in the western sector of Block 16, around 13 km
(8 miles) from the companys Chissonga discovery. The
probe was drilled in 1,235 m (4,052 ft) of water to a total
depth of 5,508 m (18,072 ft) using the Pride South Pacific
semisubmersible rig. Sonangol E.P. is the concessionaire
of Block 16.
NORTH AMERICA
Shells Alaskan adventure kicks off
Royal Dutch Shell is under way with a well in the Beaufort Sea offshore northern Alaska targeting the Sivulliq
prospect. As with a well it spudded in September in the
Chukchi Sea off northwestern Alaska, Shell is currently
permitted by federal authorities to drill only to shallow
depths short of oil-bearing reservoirs. The permits
issued by the US Bureau of Environmental Safety and
Enforcement allow only top-hole drilling because Shell
has not yet met the required oil-spill regulations, having
failed to gain US Coast Guard clearance for a required
OFFSHORE
ENERGY
iil
I
I
I
CENTER
II for omrna
f Offshore No
Ili Mall of
Help us honor those
that made our industry

what it is today.
OFFSHORE
PIONEERS
2013
is currently calling for nominations of Industry

Pioneers and Pioneering Technologies for induction
into the Mail of fame. for 2013, the committee would
like to place an emphasis on receiving nominations for

the individuals who formed some of the foundations
for the offshore industry's technology and/or were

corporate leaders, preferably before 1985 including
overseas developments.
recognizes important achievements of individuals

who are recognized leaders in the offshore energy
industry.
The Offshore Pioneers

will be inducted into the
Offshore Energy Center 's
Hall of fame
in September of 2013
rd
recognizes important technologies by individuals ,
companies , organizations or institutions.
Nominations Close
December 10 , 2012
To receive a nominating package,please contact the
Offshore Energy (enter at 281.679.8040,
il
W--"
email oecraoceanstaroec.com or log on to

www.oceanstaroec .com and download the forms.
Hugh Elkins - Chairman,Hall of Fame Committee
international
HIGHLIGHTS
oil-spill barge.
Shell said the
barge, the Arctic
Challenger, will
not be available
for use this year
in Alaska but
that repairs
should be completed in time
The Kulluk rig is drilling the Sivulliq prospect
for next years
26 km (16 miles) offshore in the Beaufort Sea
open-water
offshore Alaska. (Image courtesy of Shell)
drilling season.
The Sivulliq
prospect being drilled by the Kulluk rig is 26 km (16
miles) offshore. The Burger prospect in the Chukchi,
which Shell is drilling with the Noble Discoverer drillship,
is 112 km (70 miles) offshore.
TGS survey in British Columbia
TGS, through its newly-acquired subsidiary Arcis Seismic
Solutions, is to acquire 3-D seismic onshore in northeast
British Columbia, Canada. The Cameron River 3-D survey is a multiclient project that will cover an area of 470
sq km (181.5 sq miles) along the prolific liquids-rich Triassic Montney and Doig unconventional fairways, said
TGS. High-resolution seismic will enable exploration for
stratigraphic and structural traps and will illuminate the
Cretaceous through Devonian section. The seismic data
will be processed by Arcis. Intermediate products will be
available to the industry in 1Q 2013, with final data available in the second quarter.
GULF OF MEXICO
Pemex reveals second Perdido find
Pemex has confirmed another ultra-deepwater oil discovery in the Gulf of Mexico (GoM) with estimated reserves
put at about 200 MMbbl of oil. The find follows on the
heels of its Trion-1 discovery in the Perdido Fold Belt
area, revealed in August. This latest find on the Supremus
prospect was made in a water depth of around 2,900 m
(9,500 ft) and is part of the companys US $1.1 billion
spending program this year on deepwater targets. The
probe was drilled by the Bicentenario semisubmersible rig,
which will next go to drill a wildcat on the Maximino
prospect, for which Pemex also has high expectations.
The estimated proven, probable, and possible (3P)
reserves for the Supremus-1 well are put at between 75
MMbbl and 125 MMbbl of crude. Trion-1 was estimated
to have 3P reserves of up to 400 MMbbl of crude.
130
BOEM unveils Central GoM sale

The next lease sale for the Central GoM will take place
in March 2013, with a total of 38 million acres to be
offered by the Bureau of Ocean Energy Management
(BOEM). Lease Sale 227 will take place in New Orleans
March 20, 2013, and is the first of five such annual Central Gulf sales. The sale will encompass around 7,250
unleased blocks located in water depths ranging from 3
m to 3,400 m (9 ft to 11,115 ft). BOEM estimates the
proposed sale could result in the production of 0.46
Bbbl to 0.89 Bbbl of oil and 1.9 Tcf to 3 Tcf of natural
gas. Western Gulf Lease Sale 218, held in December
2011, received high bids on tracts covering about 1 million acres and netted nearly US $325 million. Central
Gulf Lease Sale 216/222, held in June 2012, attracted
more than $1.7 billion in high bids for more than 2.4
million acres. The next sale, Western GoM Lease Sale
229, announced earlier this year, will take place in New
Orleans Nov. 28.
SOUTH AMERICA
Uruguay deepwater winners
ANCAP, the national oil company of Uruguay, has
signed offshore production-sharing contracts (PSCs)
with four companies that pave the way for deepwater
exploration activity in frontier Atlantic Margin acreage
over the next three years. The NOC signed the deals
with BG, BP, Total, and Tullow Oil, initially awarded the
blocks in April. The two British companies each won
three oil blocks, while there was one each for Total and
Tullow. The blocks are located in water depths ranging
between 500 m and 2,500 m (1,640 ft and 8,202 ft) in
the Pelotas and Punta del Este basins. Total planned
investment is estimated at up to US $1.6 million over the
first three years. The work plans for the first three-year
period include one exploration well, 3-D seismic data,
3-D electromagnetic data, seabed samples, and 2-D seismic data. Each PSC covers a period of 30 years.
Petrobras fills in Franco SW details
Petrobras has completed drilling a fourth well in its
Transfer of Rights area in the presalt Santos basin and
verified a hydrocarbon column of 438 m (1,437 ft). The
Brazilian major had previously announced the find in
August when the well was still being drilled and had
reached a depth of 5,656 m (18,557 ft). At that time it
had confirmed up to 295 m (968 ft) of net pay. The
3-BRSA-1053-RJS (3-RJS-699) well, known as Franco SW,
is located in 2,024 m (6,641 ft) water depth around
210 km (130 miles) offshore Rio de Janeiro. It is also
to
1\A
DATE
CANADIAN UNCONVENTIONALS
uk
tion Cent
lJ
Canada
DEVELOPING UNCONVENTIONALS
Hart Energy is once again proud to host our latest DUG T`' Series
Conference and Exhibition. Together with the Canadian Society
for Unconventional Resources (CSUR), we will bring the latest
tight oil and gas insights to Calgary in February 2013.
CA NADA
Canadian oil production is forecast to double between now and 2030 , and the country 's light ,tight
oil plays will contribute mightily to that growth.The Duvernay shale play is quickly emerging as a
world-class target, while powerhouse producers such as the Cardium and Montney are posting
impressive production gains. Traditional Deep Basin vertical plays -the Nordegg , Dunvegan, Belly
River and more-are now being targeted by operators wielding horizontal unconventional technology.
And classic oil-saturated reservoirs such as the Slave Point in the Peace River Arch are in the midst
of major rejuvenation.
.
Presented by:
........ . .. .........................
. ........ .........................
.............
HART ENE RGY

r,?^k, CSUR
The 2ND ANNUAL DUG CANADA CONFERENCE AND EXHIBITION

will look at the depth and breadth of Canada 's rapidl y-developing
unconventional p lays. Beyond insi g hts into the most active
producers and their programs in the hottest plays, conference
agenda topics include:
> Key Geological & Geophysical Characteristics
Sp onsored bry:
.........................
.....................................
Invnd(kis
> Breakeven Costs & EURs
....................
MIDSTREAM
u
MRNOMI
> JVs, Corporate & Asset Deals

> Optimal Drilling & Completion Strategies
> Social & Environmental Challenges
> Midstream Infrastructure
> Export Opportunities
If your company is involved in Canada 's resource plays,or if you

want to explore the opportunities in Canada now and into the
future, plan now to attend this conference.
international
HIGHLIGHTS
17 km (10 miles) south of discovery well 2-ANP-1-RJS

(Franco). The total depth of 5,973 m (19,597 ft) was
reached in a stratigraphic horizon established in the
exploratory program. Analyses of the oil recovered from
carbonate reservoirs below the salt layer confirmed good
quality oil (from 28 API to 30 API). This well is part of
the Mandatory Exploratory Program in the Franco area
where Petrobras acquired the right to produce up to 3
Bbbl of oil. The exploratory phase is under way and is
expected to be completed by September 2014.
MIDDLE EAST
RWE extends Nile Delta find
Germanys RWE Dea Egypt has confirmed a further extension of the South Sidi Ghazy-1x discovery in the Egyptian
Nile Delta. The latest well follows the successful appraisal
of the North Sidi Ghazy-1x discovery reported earlier this
year. The companys Disouq project is planned to start producing next year. Well SSG-1-2 was the second to be drilled
in the South Sidi Ghazy structure and reached a total measured depth of 2,833 m (9,295 ft). The well was drilled 1.3
km (0.8 miles) northwest from the discovery and confirmed the extension of the gas resources and the good
Messinian (Abu Madi formation) reservoir properties in a
northwestern compartment of the field. The first phase of
the Disouq development will see RWE Dea develop seven
gas discoveries together with the Egyptian Natural Gas
Holding Company and the Suez Oil Company. The
onshore block covers 5,375 sq km (2,075 sq miles).
Ultra-deep wildcat off Israel
Calgary-based GeoGlobal Resources Inc. has spudded a
deepwater wildcat offshore Israel in the Mediterranean
Sea. The Sara-1 exploration probe was spudded by
GeoGlobal and its partners in September using
the Noble Homer Ferrington semisubmersible rig.
The well is located 60
km (37 miles) offshore
in approximately 1,400
m (4,593 ft) water
depth. Sara-1 is planned
to be drilled vertically
to approximately 4,000
m (13,124 ft) true vertiNobles Homer Ferrington rig will
cal depth subsea and
drill the Sara-1 probe to a planned
is anticipated to take
depth of 4,000 m (13,124 ft).
approximately 50 days
(Image courtesy of Noble Drilling)
to drill. GeoGlobal is the
132
operator of the well with a 5% stake. ILDC Energy and its

affiliates own 41.6%, and its parent company Israel Land
Development Company owns 5%. Modiin Energy LP, controlled by Tzahi Sultan and Nochi Dankers IDB Holding
Corp. Ltd., owns 29.2%, IDB directly owns 5.6%, and IPC
Oil and Gas Holdings Ltd. holds 13.6%.
CENTRAL ASIA
Black Sea shoot for Lukoil
A 3-D seismic survey is underway by Lukoil subsidiary
Lukoil Overseas on two deepwater blocks in the Romanian sector of the Black Sea. The shoot over the East Rapsodia and Trident blocks is being carried out by CGGVeritas
and is due for completion in November. The survey will
cover up to 2,000 sq km (772 sq miles). The blocks are
being explored by Lukoil (80%, operator) and US independent Vanco International (20%). The consortium was
awarded the right to implement these projects as a result
of concession agreements signed in 2011. Both blocks feature water depths ranging from 90 m to 1,000 m (295 ft to
3,281 ft) and lie between 60 km and 100 km (37 miles to
62 miles) offshore.
ASIA PACIFIC
Chevrons Satyr no myth
Chevron has notched up further exploration success
offshore Western Australia, with its Satyr-2 probe in the
Greater Gorgon area hitting gas pay. The exploration
well in the Carnarvon basin confirmed approximately
39 m (128 ft) of net gas pay in the WA-374-P permit area
approximately 120 km (73 miles) northwest of Barrow
Island. The well was drilled in 1,088 m (3,570 ft) of
water to a total depth of 3,796 m (12,454 ft). Satyr-2 is
Chevrons 15th discovery in Australia since mid-2009.
Chevron Australia is the operator of WA-374-P with a 50%
interest, while Shell and ExxonMobil each hold 25%.
Beach in a whirl over Windmill
Australian independent Beach Energys Windmill-1
exploration well in PEL 92 on the western flank of the
Cooper basin onshore Australia discovered oil in the
Namur Sandstone and Birkhead formations. The well
reached a total depth of 2,100 m (6,890 ft), and wireline
logs have now been acquired. The well hit a 6-m (20-ft)
net oil column in the Namur sandstone and indications
of oil within the Birkhead formation, said minority partner Cooper Energy in a press statement. Joint venture
participants in PEL 92 are Beach Energy (75%, operator) and Cooper Energy (25%).
'MA d
MARCELLUS-UTICA
MIDSTREAM
CONFERENCE
&
4TH ANNUAL
MARCELLUS-UTICA MIDSTREAM
CONFERENCE & EXHIBITION
DAVID L. LAWRENCE CONVENTION CENTER
EXHIBITION
PITTSBURGH , PA
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Mark your calendars ! The Marcellus-Utica

Midstream Conference and Exhibition is
moving to January !
The 4th Annual Marcellus Midstream Conference & Exhibition (now
renamed Marcellus- Utica Midstream) focuses on opportunities
surrounding the region's burgeoning production. From dry-gas pipelines
and processing plants to liquids options and markets , excitement
continues to build in the midstrea m sector. Hart Energy provides topica l,
industry leading speakers and presentations to provide actionable

business intelligence for sponsors, exhibitors and attendees.
It's the same great conference that surpassed 2 ,000 in attendees in
2012 and had over 200 exhibitors. Take time now to mark your
calendars , register to attend and plan to exhibit.

We ll see you in Pittsburgh on January 29-31, 2013.
PRESENTED BY:
541
HART ENERGY
HOSTED BY:
MIDSTREAM
ts,4,r,,e:s
CO
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PEOPLE
Sam Henry has been named president
and CEO of GDF SUEZ Energy
Resources, succeeding Robert Wilson
in the position. Wilson was recently
named president and CEO of GDF
SUEZ Gas NA Holdings LLC.
Jeff Miller has been promoted to
executive vice president and COO of
Halliburton. He will be responsible for
the companys global operations, business development, and marketing.
Dr. Mario Ruscev has been named
chief technology officer of Baker
Hughes Inc., where he will lead
efforts in technology, research,
and development.
The National Ocean Industries
Association has appointed Michael
Kearns as vice president for government relations.
Dr. Alice P. Gast was elected to
Chevrons board of directors. She
will serve on the companys Audit
Committee.
Schlumberger Business Consulting
has appointed Chris Peeters as director of Europe, Middle East, and Africa
region and will assume responsibility
for managing the Paris-based utilities
practice.
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134
Remi Volpe (right) has been

selected as vice president
and general manager for
Honeywell Sensing and
Control, where he will oversee the
companys Europe, Middle East, and
Africa region.
Clariant Oil Services has appointed

Michael Brauchle as business development manager for Europe and CIS.
McCrometer has tapped Carl Kull as
its new regional sales manager for
Southeast Asia.
Brandon Leger (right) has
assumed responsibilities as
operations coordinator
Quality Control for Variable
Bore Rams Inc.
Norway-based
Mirmorax AS has
appointed Erlend
Blanchard (left)
as its business unit
manager. Svein Torkelsen
(top right) has been
named as technical product
manager for Mirmoraxs
Oil in Water product line.
Snorre Lge (bottom right) has
been selected for its R&D engineer
position.
Xodus Group Houston has named
Dominic Wright as flow assurance
lead.
Hogan Lovells recently announced
that Diogenes Bermudez, former
general counsel for Petrobras
Venezuela, has joined its Caracas
office as counsel in the infrastructure
and project finance practice.
Renita Durbin recently joined
J&J Technical Services, LLC where
she will oversee growth in Louisiana
as a member of the companys sales
team.
EXPANSIONS
UTEC has announced
the appointment of Sean
Halpin (left) as global AUV
manager and US geophysical manager.
Ashtead Technology Offshore will

soon be relocating to its new global
headquarters in Westhill, Aberdeen,
Scotland.
P.
MARKETING | SALES | CIRCULATION
Group Publisher
RUSSELL LAAS
Tel: 713-260-6447
rlaas@hartenergy.com
Associate Publisher
DARRIN WEST
Tel: 713-260-6449
dwest@hartenergy.com
United States
Canada / Latin America
1616 S. Voss Road, Suite 1000
Houston, Texas 77057 USA
Tel: 713-260-6400
Toll Free: 800-874-2544
Fax: 713-627-2546
Regional Sales Manager

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

Africa / Middle East
Eden House
64-66 High Street
Chobham
Surrey GU 24 8AA, UK
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
Sales Manager
Eastern Hemisphere
DAVID HOGGARTH
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
dhoggarth@hartenergy.com
Advertising Coordinator
CAROL NUNEZ
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cnunez@hartenergy.com
Subscription Services
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List Sales
MICHAEL AURIEMMA
Venture Direct
Tel: 212-655-5130
Fax: 212-655-5280
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on the
MOVE
Glacier Energy Services has relocated
its main business and manufacturing
operations to its new facilities in Glasgow, Scotland.
Ikon Science has opened new offices in
Calgary, Alberta, Canada, focusing on
delivering services to the Canadian
exploration and development industry.
Aberdeen-based Xodus Group, an
international energy consultancy,
recently announced plans to expand
into Middle East operations with the
opening of a new office in Dubai, UAE.
Honeywell has expanded its presence
to Saudi Arabia, where it recently
opened a research and training center
in the Dhahran Techno Valley.
Partnering with OFS Energy Fund, KW
International LLC plans a new manu-
facturing facility in Columbus, Texas.

The company specializes in midstream
and production equipment.
Iowa-based Mechdyne Corp. has
expanded its presence into the Middle
East with the opening of its new office
in the UAE.
dGB Earth Sciences has announced
the opening of an office in Rio de
Janeiro, Brazil.
Aker Solutions recently expanded its
services to Labuan, Malaysia, opening a
subsea lifecycle service base to support
the Asia Pacific region.
Reflex Marine has opened an accredited service center in Mount Pearl,
Newfoundland, appointing Nord
Marine Services Ltd. to operate the
new Canadian location.
ADVERTISER INDEX
Allmand Bros. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
American Jereh International Corporation . . IFC
Archer Well Company Inc. . . . . . . . . . . . . . . . 47
Australian American
Chamber of Commerce . . . . . . . . . . . . . . . 115
Baker Hughes Incorporated . . . . . . . . . . . 39,45
BGP International . . . . . . . . . . . . . . . . . . . . . . 63
Bluebeam Software, Inc. . . . . . . . . . . . . . . . . . .24
Cameron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Carbo Ceramics . . . . . . . . . . . . . . . . . . . . . . . 27
CGGVeritas . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Compressor Systems, Inc. . . . . . . . . . . . . . . . .87
Cudd Energy Services . . . . . . . . . . . . . . . . . . . 49
Dragon Products, Ltd. . . . . . . . . . . . . . . . . . . 7, 81
E&P . . . . . . . . . . . . . . . 76, 106-107,124,131, 133
Expro Group . . . . . . . . . . . . . . . . . . . . . . . . . .111
Falcon Technologies . . . . . . . . . . . . . . . . . . . 101
FlexSteel Pipeline Technologies, Inc. . . . . . . .97
FMC Technologies . . . . . . . . . . . . . . . . . . . . . . 36
Forum Energy Technologies . . . . . . . . . . . . . .42
Frac Chem . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Frontier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Fugro Jason . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
GE Oil & Gas, Surface Pumping Systems . . . . 16
Glen Raven Technical Fabrics . . . . . . . . . . . . .14
GL Noble Denton . . . . . . . . . . . . . . . . . . . . . . . 11
Gorman-Rupp Company, The . . . . . . . . . . . . . 93
Great Wall Drilling Company . . . . . . . . . . . . . 77
Greenes Energy Group . . . . . . . . . . . . . . . . . 109
Halliburton . . . . . . . . . . . . . . . . . . . . . . . 4, 83, 99
ION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
J&J Truck Bodies & Trailers . . . . . . . . . . . . . . . . . 25
Magnum Oil Tools International . . . . . . . . . . . 61
McJunkin Redman Corporation . . . . . . . . . . . 15
Mechanix Wear . . . . . . . . . . . . . . . . . . . . . . . . . 88
Mewbourne College of Earth & Energy . . . . . . 9
M-I Swaco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Momentive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
National Oilwell Varco . . . . . . . . . . . . . . . . . . . 34

Newpark Drilling Fluids . . . . . . . . . . . . . . . . . 32
NSC-Tripoint . . . . . . . . . . . . . . . . . . . . . . . . 89-91
Offshore Energy Center . . . . . . . . . . . . . . . . .129
Oilfield Improvements . . . . . . . . . . . . . . . . . 134
Paradigm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
PGS Exploration (UK) Ltd. . . . . . . . . . . . . . . . . 30
PGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Pentair Technical Products Anoka . . . . . . . . . . 46
Precision Geophysical . . . . . . . . . . . . . . . . . 113
Roxar Software Solutions . . . . . . . . . . . . . . . . . 29
Roxar Flow Measurement . . . . . . . . . . . . . . . 105
Schlumberger . . . . . . . . . . . . . . . . . . . . . . . 3, BC
Schneider Electric . . . . . . . . . . . . . . . . . . . . . . 20
Select Energy Services . . . . . . . . . . . . . . . . . .59
Spacecom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Spectrum Geo Inc. . . . . . . . . . . . . . . . . . . . . . . 67
Statoil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Surfside Abstracting, Inc. . . . . . . . . . . . . . . . 104
TAM International . . . . . . . . . . . . . . . . . . . . . . .41
TEAM Oil Tools . . . . . . . . . . . . . . . . . . . . . . . . 84
Tenaris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Tendeka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95
Tetra Technologies Inc. . . . . . . . . . . . . . . . . . IBC
Tex-Az Field Services . . . . . . . . . . . . . . . . . . . .82
TGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Thru Tubing Solutions . . . . . . . . . . . . . . . . . . . .79
Timken Company, The . . . . . . . . . . . . . . . . . . . .51
TrueNorth Steel . . . . . . . . . . . . . . . . . . . . . . . . 80
U.S. Steel Tubular Products . . . . . . . . . . . . . . . 73
Volvo Penta . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Weatherford International, Ltd. . . . . . . . . . 22, 23
Well Control School . . . . . . . . . . . . . . . . . . . . .112
WellEz Information Management, LLC . . . . . . .75
Welltec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Zeeco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
October 2012 | EPmag.com135
last
WORD
Managing social risk

Getting a license to do business requires understanding public perception.
Hamish Wilson, SLR Consulting
ocial risk is becoming as important a factor in project

delays as technical risk. Being technical people, we are
used to managing technical risk and have the processes
and systems in place to do so. However, we have yet to
develop effective processes to manage social risk. Historically the industry has largely managed to escape the
impact of social risk as our projects have been offshore
and out of sight, but it is becoming more evident that our
interaction with the local population as well as at government, national, and international levels creates significant
risk to the project and to the company.
In a number of developing countries, particularly in

Africa and the former Soviet Union states, our industry
has a dominant impact on the national economy and in
some cases enables corrupt governments to stay in power
to the detriment of their subjects. World Bank data from
1970 to 2001 shows that on average, countries in Africa
and the Middle East are worse off now than before hydrocarbon development.
The industry has the chance to improve social wellbeing in emerging hydrocarbon economies such as
Ghana, Uganda, and Mozambique. In Ghana the signs
are very encouraging, but sadly less so for Uganda and
Mozambique.
Taking a holistic view

Social risk
The shale gas debate has brought oil and gas into the
center of the public eye when it comes to addressing
our energy needs.
Disenfranchised populations living around a project
routinely delay and damage project progress. The need to
win the hearts and minds of people living near production
facilities is just as important in the international domain.
But perhaps more complex in international operations
is the industrys interface with national governments. An
important cause for disenfranchised people is the effect
of hydrocarbon wealth on a corrupt government. Key
questions for us to address are the roles an oil company
has toward national governments and whether we can
choose to ignore the human rights/social justice records
of the host governments in countries in which we operate.
Most companies would agree that the answer to the
second question is probably no, but to the first,
the honest answer is we dont know.
Many of the issues discussed here are caused by poorquality governance. However, I believe the solution starts
at the local and project level. The implicit contract that
a company has is that a project will damage the local
neighborhood but that local people will be better off.
The industry has manifestly broken this contract in that
the populace is patently worse off.
Achieving a winning outcome to this contract requires
managing the interplay of three risk domains: environmental, societal, and technical. The value of the environment must be determined in social terms (and not a
purist preservation measure set in Western ivory towers).
We can manage our environmental impact at the project
design phase through engagement with the local people.
We can also manage the benefits to society with local procurement and wealth creation (i.e., not just building
schools and hospitals to salve our conscience).
The way forward

We should take the same approach to winning social
acceptance for a shale gas development in the UK as for
building an LNG plant in Mozambique by engaging with
people early, listening to them, and having a material
value proposition for them.
Achieving such an outcome requires integrating early
social engagement and HSE functions into the project
stage processes to address local concerns alongside achieving regulatory compliance. This will be a challenge for
many companies that have only just managed to get geologists to talk to engineers. Social scientists may appear a
step too far but are absolutely essential.
136
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