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REACTIVATION OF MATURE FIELDS IN NORTHERN MEXICO.

Authors: Ing. Antonio Narváez, PEMEX Exploration and Production


Dr. Luis Roca Ramisa, Schlumberger Oilfield Services

Copyright 2005, CIPM. Este artículo fue preparado para su presentación en el cuarto E-Exitep 2005, del 20 al 23 de febrero de 2005 en Veracruz, Ver., México.
El material presentado no refleja necesariamente la opinión del CIPM, su mesa directiva o sus colegiados. El artículo fue seleccionado por un comité técnico
con base en un resumen. El contenido total no ha sido revisado por el comité editorial del CIPM.

RESUMEN

Los campos maduros y/o marginales en México se fields that have passed their peak production.
definen como aquellos que el margen de utilidad, Fields producing less than 10 bbl/d are considered
aunque rentable; no son suficientemente marginal In the U.S. (IOGCC).
competitivos con otros proyectos de PEMEX
Exploración y Producción. El concepto de madurez There are 12 oilfields considered marginal or
y/o marginalidad es dinámico; es decir, puede ser mature in the Poza Rica-Altamira asset in
temporal en función de las condiciones de Mexico's North Region. Nevertheless, these fields
mercado y nivel de costos de extracción y still have considerable 2P reserves, but their
producción. En los EUA, se considera como average historical recovery factors are relatively
maduro y/o marginal, aquellos campos de aceite low (< 5%). These fields production started in the
con producciones inferiores a 10 bpd por pozo early 1990s. Today, production from these fields
(IOGCC). averages between 3 and 55 bbl/d. These fields
could be reactivated economically and therefore
En el Activo Integral Poza Rica-Altamira existen serve as a springboard for Mexico's North Region
más de 12 campos de aceite que son to again become a net oil producer with
considerados como maduros y/o marginales; sin comprehensive study, properly applied technology
embargo, y poseen todavía una cantidad and a shift in the use of human resources.
considerable de reservas 2P y tienen factores de
recobro históricos promedio relativamente bajos This paper discusses the challenges of reactivating
(>5%). Estos campos fueron descubiertos a lo the North Region and presents plans for doing so.
largo de la década de 1990 y tienen actualmente Experiences with marginal or mature fields in other
producciones que oscilan entre 3 y 55 bpd por locations are cited as a backdrop for this study.
pozo. Con un enfoque adecuado, estos campos
pueden ser reactivados económicamente y ser un INTRODUCTION
detonante para el re-surgimiento de la Región
Norte como productora neta de aceite. The main driver of the oil industry continues to be
the demand for oil and gas, which is expected to
En este trabajo se presentan los retos y planes grow at a cumulative rate of 1.8% from 2001
diseñados por la Región Norte para la re- through 2025 (Fig. 1).2 Despite the projected
activación de estos campos, así como también las growth in demand, production in the world's
experiencias con campos maduros y/o marginales remaining proven reserves has peaked in many
en otras partes del mundo. areas and will peak in others within the next 10
years.
ABSTRACT

Although profitable, Mexico's marginal fields are


those whose profitability is not competitive with
other PEMEX Exploration and Production projects.
The concept of marginality is dynamic in that it is a
function of market conditions and lifting and
production costs. Mature fields could be also
marginal, but the term is applied strictly to those

Fig. 1. World energy demand.


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Remaining reserves are in a limited number of production costs. Mature fields are marginal, and
countries. With the exception of the harsh are further distinguished by the fact that they have
deepwater environments, future new exploration already passed their peak production. These 12
and growth will happen mainly in the Eastern oilfields, which were put on production in the early
Hemisphere. Figure 2 illustrates the peak 1990s, were unprofitable until 1996. After that time,
discoveries in different areas around the globe. gas profitability has remained good to excellent,
but profitability from the production of oil, which
peaked in 1996, has been significantly less
impressive (Fig. 3).3

Fig. 2. Oil reserves distribution.

The larger bubbles, representing remaining oil


reserves in MMbbl, appear mainly in Eastern Fig. 3. North region's profit per business type.
Hemisphere countries.

Peak production in remaining reserves will peak in Today, average production from the Poza Rica
the next 10 years, which means the E&P industry asset is 70 bbl/d; it is 40 bbl/d from the Altamira
will become more production based over time. This asset. Overall production from the North Region is
scenario points to the importance of increasing 100 bbl/d. These intermittent wells also produce a
production in marginal fields and prolonging it in high percentage of water. Despite the declining
mature fields where economically feasible. trend in production, Poza Rica-Altamira reserves
Although new discoveries, new technologies and have significant remaining value, with 2P reserves
new evaluations will come into play, the overall at 5531 MBOE for the Poza Rica and 4881 MBOE
scenario will not change significantly. In Mexico, for Altamira. In general, several difficulties must be
where oil production is a key element of the overcome for these fields to be profitable:
country's continued economic growth, production decreasing production, high production costs,
from marginal and mature fields will play an excess personnel and a low level of financial
important part in its future fiscal well-being. investment.

Twelve oilfields in Mexico's North Region—the Several scenarios could be considered with regard
Poza Rica-Altamira asset—are considered to administering these mature and marginal fields.
marginal or mature. The term marginal, which can These fields could be closed, but such a move
be applied to any oilfield, is dynamic in that it is a would demand huge financial resources and would
function of market conditions and lifting and mean the loss of any profit. Therefore, closing the

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12 fields in the Poza Rica-Altamira asset is not a focused strategy for efficiently allocating human
practicable. Reactivating these fields could resources. In other words, labor as a variable
significantly reduce operations costs and therefore factor must be brought into alignment with
improve profitability. This would appear to be the production.
best option, yet challenges remain. First, human
resources are the variable with the greatest impact While more fields are becoming marginal (26% in
on cost. The scope and focus of the workforce in 2004, up from 11% in 1996), investment and
this area would have to be shifted to economically production have dropped along with increased
support a reactivation scenario. Second, a costs, volatile prices and lower profits. These
substantial improvement in performance would areas must be balanced in order for reactivation of
require a step-change in how decisions are made the North Region fields to be a step in the right
with regard to these fields. Third, reactivating these direction.
fields will require the application of fit-for-purpose,
cost-effective technology that will increase ultimate NORTH REGION GEOLOGICAL
recovery through extended field life. CHARACTERISTICS
NORTH REGION BUSINESS FRAMEWORK The geology of Mexico's North Region—
specifically, the Ébano-Pánuco area—serves as an
In 2003, North Region 3P reserves represented example of the type of geology encountered in
43% of the PEMEX Exploration and Production similar mature fields such as the Poza Rica-
total 3P reserves. Despite this high percentage, Altamira. Heavy oil production in the Ébano-
income from this region accounted for only 8% of Pánuco comes from fractures in the Cretaceous
the income from total PEMEX wells in operation. San Felipe and Agua Nueva formations. The
Investments made in the North Region to date reservoir rock is a Cretaceous carbonate
totaled $2 billion USD, or 27% of the PEMEX total, composed principally of fine-grained limestone with
and North Region workers accounted for 27% of varying amounts of detrital shale. Four lithotypes
the total PEMEX Exploration and Production are volumetrically dominant: argillaceous lime
workforce. The disparity in these numbers points to mudstone (shaly limestone), detrital shale
the need to make significant changes in how and (calcareous shale), chalk (clean, fine-grained
where workers are distributed, and in how critical it limestone) and Argillaceous mudstone.4
will be that future investments are highly targeted
to meet specific production and income levels. In These lithotypes change vertically with
addition, an unfavorable fiscal regime in Mexico stratigraphic position and laterally with geographic
further necessitates that production in the mature location. In general, the rocks become more shaly
Poza Rica-Altamira be carried out in the most toward the west.
efficient manner possible—in a way that ensures
future profitability. Core samples taken in the Ébano-Pánuco reveal
low but measurable values of porosity, ranging
In the Poza Rica-Altamira asset, support staff from 0.4 to 18%. In more than 60% of the thin
makes up a higher percentage of the workforce sections, the pores are too small to be seen with a
than do well operations staff. A significant share— petrographic microscope (micropores). Because of
42%—of the total 3170 workers are used in this small pore size, the overall matrix porosity and
maintenance in the Poza Rica; in the Altamira, permeability are relatively low to low. Lithotypes in
34% of the total 1992 workers are working at the the San Felipe and Agua Nueva formations have
administrative level. In each case, essential areas lower values of porosity (3.75 to 7.5%) and
related to well operations are being covered by permeability (0.008 to 0.0a mD) due to the
only about 40% of the total workforce. This presence of detrital shale mixed with micrite
imbalance must be remedied in coming years with grains.

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Water saturation is uniformly high in the most shaly A focused and ongoing human resources strategy
rocks because the throats of the matrix pores are will be a key part of profitable reactivation to
very small. The irreducible water saturation is very ensure that labor as a variable factor directly
low (15%) in the porous and permeable chalk relates to production. Without such a strategy,
intervals. costs might reach $35 per barrel in 10 years as
Poza Rica-Altamira production declines. Key
Fracture porosity is very important in the area elements of this strategy would include:
because of the low total volume of matrix porosity.
Virtually all the fractures in the rocks are of tectonic • relocating employees to more productive
origin, and at least two stages have occurred in the areas
rocks, both producing vertical fractures. The • modifying work shifts and improving labor
vertical seal is provided by the Mendez and relations
overlying Tertiary formations. Log evaluations have • transferring jobs to expanding business
shown that the Mendez contains a significant units, inside or outside PEMEX Exploration
quantity of shale. The basal part of the Mendez and Production
formation contains a higher proportion of limestone • establishing incentives for performance
than the upper part, and it is likely that some linked to increased production and lowered
locations in the lower Mendez contain fractures costs.
that may act as a Type 1 reservoir.
Targets for linking the size and processes of
Oil gravity in the Ébano-Pánuco ranges from 11 to technical and administrative staff support areas to
14 API, with viscosities ranging from 1200 to 8000 operations will have to be reset to levels that are
cp. This area has produced approximately 1 billion more in line with production. Currently, 65% of staff
barrels of oil from several different sectors. Some works in support areas in the Poza Rica-Altamira.
wells in the area still produce by natural flow, but Reducing that number to 30% would reduce costs
water production is a major problem in these significantly. To fill in the gaps resulting from this
reservoirs where water has coned upward through reduction, training should be offered to improve
the natural fractures. personnel skills in design, drilling and operations of
wells and installations. State-of-the-art information
STRATEGIES AND PLANS FOR REACTIVATION technology and telecommunications equipment
should be put in place to reduce the time
Obviously, the objective of boosting reactivation in personnel currently spend in managing data and
the North Region is to significantly increase transmissions. Where possible, maintenance,
production. Opportunities abound for PEMEX personnel, accounting and other support areas can
Exploration and Production to ensure that mature be relocated within PEMEX or outsourced to move
North Region fields become net producers. resources to areas more essential to reactivation
Exploration in geologic basins associated with activities.
these fields must be carried out to identify
additional areas that are ripe for development. Along with a human resources strategy, the
Appraisal of these fields would include seismic operation and management of wells should be
studies and identifying strategic wells that are expanded and automated where appropriate.
candidates for reentry. Development of mature Since these activities require substantial manual
fields could include directional drilling, where labor, energy and maintenance, steps must be
appropriate. Fields and wells would be optimized taken to optimize management activities.
by artificial lift systems and water control Capacities for separation, storage, pumping,
measures. Secondary and tertiary recovery would transport, injection and compression must be
also be considered. gradually resized, and controls can be
implemented to measure and handle fluids

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automatically and remotely. Crude oil pumping of oil, gas and water flow without fluids separation,
activities can be streamlined to take advantage of which typically requires bulky separator equipment.
the large storage and pumping capacity already The Wet Gas module of Vx permits measurement
available in the Poza Rica-Altamira. of condensates, an important capability where both
oil and gas wells are produced or where the
Funding is another area where projects in mature production character changes over time. In
fields are at risk. Without revising the fiscal regime general, production metering lowers overall costs
and the Law of Financing and Public Expenditure, by providing quick, efficient well tests and early
there are options for strengthening the sourcing for water detection.5
financing mature fields. First, reasonable and
appropriate baselines—particularly for costs— Cost-effective well construction is another area
should be established for evaluating projects. where specific technologies can help lower overall
Second, assistance can also be gained by well/field construction costs and access greater
designating multiannual financial resources for reserves per well. In the Burgos basin, for
mature fields, without restricting these funds to example, the Drillers Technology Corporation
present technical limitations. Third, arrangements (DTC) uses its telescopic double rigs to improve
could be made with the federal government to drilling efficiency. The performance record set the
permit PEMEX to use financial reserves for bar for drilling in the Poza Rica-Altamira. For
reactivating those fields with the most oil and gas example, the average drilling time was 10.68 days,
reserves. Finally, peer groups (competing among with the best time at 9.09 days (drilling times
equals for financial contracts) could establish the adjusted to total well depth of 2000 mV). Best
financial budget as is done by other E&P operating average ROP in an 8 1/2-in. hole section was 31.3
companies. m/hr; in a 6 1/8-in. hole section the average was
22.9 m/hr. Nonproductive time (NPT) was reduced
PUTTING ADVANCED from 14.63% to 2.88% between drilling the first and
TECHNOLOGY TO WORK second wells. With lessons learned in the Burgos
basin, similar achievements can be expected with
Overall, Mexico's oil industry must come to rely on DTC rigs in the Poza Rica-Altamira to lower drilling
technology that lowers lifting costs so that time and costs.
marginal, mature fields become viable. Making use
of and developing new fit-for-purpose, cost-
effective technology and services is essential to
retarding the decline in performance of the world's
production base, while concurrently increasing
ultimate recovery through extended field life. In
addition, digital technologies must become more
central to providing an infrastructure that
maximizes the value of specialists and their
knowledge to improve the overall efficiency of
reactivating mature fields.

Currently, there are a number of ways where using


appropriate technologies can add significant value
to mature fields. Production and reservoir
management tools can more accurately describe
and control production for long-term economic
benefit. For instance, mutiphase flow metering Vx* Fig. 4. Schematic diagram of a DTC telescopic
technology allows the simultaneous measurement double rig.

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New techniques for reentry, stimulation and
intelligent completions can ensure that the value of
mature fields be fully realized. In the past, reentries
have often been hampered by small hole sizes. A
new technique, called TTRD*, or Thru Tubing
Rotary Drilling, combines small high-torque motors,
reliable high signal strength MWD and
sophisticated multicurve resistivity systems. TTRD
technology has demonstrated that sidetracks of up
to 25,500 ft can be drilled at good penetration rates
to targets once considered uneconomical. This
technology also provides the ability to "daisy chain"
targets, a capability that will surely forestall the
decommissioning of existing infrastructure until the
reservoir is totally drained.

With the Rapid* service provided by some


technical companies, wells can quickly be
identified as candidates for stimulation. This time
savings translates into reduced rig time and costs.
Once these wells are identified, a fiber-based fluid
fracturing technique has been shown to fully
distribute within the fracture. This full-height
packing of the fracture effectively increases the
surface area open to flow. The difference in well
productivity can be considerable.

Intelligent completions, such as those applying


one-trip ESP completions and creating a large
zonal pressure and flow differential, will mean that
fewer wells must be drilled. They also allow for
better pressure management, reduced water
production and improved recovery rates. Fig. 5. Axia* fit-for-purpose integrated lifting
system.
Other cutting-edge, reliable and proven technologies
have been used in Mexico's Chicontepec basin.
These innovative technologies have set the standard • Well trajectory planning with 4D seismic—
for improved production and cost management, and A new seismic technology that acquires
may demonstrate the efficacy of their application in data digitally, avoiding the signal averaging
Mexico's mature fields in the near future. Among applied in conventional seismic, for much
these technologies are quicker processing that can more
accurately plan the well track to avoid
• Axia-Production Management—A fit-for- water contact and improve production.
purpose downhole pumping system with
improved reliability and simplified field
operations, and the Axia lifting service that
delivers real-time pump data via a web
browser to monitor well operations.

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• Deep reading measurements—A new
cross-well resistivity that measures
resistivity across thousands of feet to
provide a "view" of often missed reservoir
features such as bypassed oil and water
fingering, and to proactively manage and
produce reservoirs and infill drilling
programs; when combined with controlled
source electromagnetic and
magnetotelluric surveys, yields a resistivity
map of the reservoir.

• ABC* Analysis Behind Casing—Provides a


full range of openhole-quality
measurements in wells after they are
cased to reveal the effects of production
on reservoirs, such as water
encroachment and depletion, where rig
efficiency is of critical importance to the
economic success of a mature field drilling
program.

Fig. 6. Well trajectory planning with 4D seismic.

Fig. 7. Deep reading measurements.

Fig. 8. ABC* Analysis Behind Casing.

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• Well construction for mature fields— EXPERIENCES WITH MATURE FIELDS
Services that can link multiple small
accumulations with a single wellbore by Mature fields in Mexico's North Region will
reducing the number of wells/slots, and ultimately benefit from lessons learned in mature
that can access small single targets, fields in other parts of the world that have had
resulting in reduced well costs, accurate successful reactivation programs. Important
well placement, increased step-out technologies have been applied with considerable
capability, and higher steering capability. success in these key areas:

• Effective processes to quickly identify wells


that are candidates for production
enhancement
• Logging techniques that assist in building
the complete petrophysical picture of
hydrocarbon zones behind casing in
existing wells
• Accurate well placement to ensure long-
term production
• Efficient well construction that maximizes
drilling performance, improves penetration
rates, avoids existing slot/well preparation,
and reduces hole size and drilled length—
Fig. 9. Drilling in complex reservoirs require
all to improve the economics of well
excellent steering capabilities.
reactivation.

A scenario parallel to the Poza Rica-Altamira


FloScan Imager*—Deploys sensors across the
exists in the Chicontepec fields within the North
wellbore to measure holdups and velocities at any
Region. In its first year of reactivation activities,
point in the well to provide a flow profile and an
this field is on track toward increased production
understanding of exactly which zones in the well
and profitability. This field has the largest 3P
are producing and what they are producing.
hydrocarbon reserves in Mexico—18,129 MMBOE.
Within one year of applying a reactivation program
to this field, 25 km of roads have been built, 12
platforms set, 81 wells drilled with 58 completed,
55 km of pipeline laid, and a 3.3-km pumping
network installed.

To reactivate the Chicontepec fields, a new


approach was taken that called for

• Appraisal of fields with seismic activities to


identify strategic wells for reentry
• Development of fields via directional hole
• Optimization of fields and producing wells
using artificial lift systems and water
control
Fig. 10. FloScan Imager* (FSI) System. • Secondary and tertiary recovery schemes.

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Overall, average oil production currently stands at potential for development that could greatly affect
50 bbl/d per well. Over the next 25 years, 13,372 overall outcome.
wells will be drilled with an expected oil production
between 600 and 700 bbl/d and gas production A successful strategy going forward will include
exceeding 700 MMft3/d. pinpointing those reservoirs with remaining
potential that can produce with a margin over the
CURRENT ACTIVITIES TOWARD cost to extract. Once identified, they must be
REACTIVATION OF THE POZA managed in such a way that they are no longer
RICA-ALTAMIRA losing value. The application of fit-for-purpose
technology, reallocation of human resources to
Success in the Chicontepec has paved the way for take greatest advantage of personnel talents, and
new activity in the Poza Rica-Altamira, and much allocating financial resources to cover the special
has already been done to begin a successful needs of these fields will be required to increase
reactivation of this asset. To date, a and prolong production from these important North
multidisciplinary team has been formed to look at Region assets.
all aspects of the project. The marginal fields have
been ranked in terms of the status of their ACKNOWLEDGEMENTS
development, optimization of artificial lift systems
and the production infrastructure. Companies The authors wish to thank PEMEX and
having experience in marginal fields have been Schlumberger for the permission and support to
consulted, along with consultants in specialized publish this paper.
areas from academia and other corporate
institutions. A financing plan has been put REFERENCES
together, along with payment arrangements. Better
labor relations have already been initiated. 1. Marginal Oil and Gas: Fuel for Economic
Growth, IOGCC, 2003.
The team has also set forth a list of services that
would optimally be contracted outside PEMEX 2. BP Statistical Review of World Energy, June
Exploration and Production. Among these are 2004.
converting wells to optimized artificial lift systems;
reengineering of production installations; 3. Antonio Narváez Ramirez, 2004 "Management
negotiating permits for rights of way; workovers; of Mature and Marginal Fields: The Chicontepec
handling produced water; administration and Success," presented at the SPE Mature Fields
maintenance of installations and the infrastructure Forum, Denver, Colorado
of production, just to name a few.
4. Caracterización de Yacimientos, Área Ébano-
CONCLUSION: FINDINGS AND CHALLENGES Pánuco, Veracruz, México, reporte interno de
AHEAD FOR POZA RICA-ALTAMIRA PEMEX Exploración y Producción, 1998.

The Poza Rica-Altamira, like other mature fields, 5. Burgos Review, Schlumberger Publication,
faces great challenges due to high production 2002.
costs, excess personnel, low levels of financial
investment and decreasing production. Despite 6. Satish Pai, "Lifting Our Game: Technology in a
these challenges, mature fields have important Mature Fields Environment," 2004 presented at
reserves, installations, opportunities, experience AAPG, Cancun, Mexico.
and personnel skills. In addition, geologic basins
associated with mature fields have good remaining Note: An asterisk throughout this document
denotes a mark of Schlumberger.