ChevronTexaco R&D Addresses Upstream Technology Challenges

8/10/2019 ChevronTexaco R&D Addresses Upstream Technology Challenges

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ChevronTexaco R&DAddresses Upstream

Technology Challenges

FORCE SeminarStavanger, Norway

April 9, 2002

Trond UnnelandVice President ,

Exploration and ProductionTechnology CompanySan Ramon, California

0 ChevronTexaco 2001


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DOC ID

Outline

ChevronTexaco post merger - a portfolio overview

Upstream Technology Challenges

Some Key R&D Focus Areas - The GameChangers

Long term recruitment needs

International Domestic Norway


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DOC ID

Combined Global UpstreamJoins Super Major League

ChevronTexaco

Conoco

Phillips

MarathonOxy

Hess

ENI

Repsol

0

1

2

3

4

5

0 5 10 15 20 25Reserves (BBOE)

Production(M

MBOED)

ChevronTexaco

RD Shell

Exxon Mobil

BP

TotalFinaElf

1999 data with pro forma adjustments for significant 2000 acquisitions and divestitures

The new company is substantially stronger in research and

development as well as relevant worldwide experience

The recent ChevronTexaco merger allows leveragingthe experience base from two technology focused companies


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3Segment Updates - UpstreamBusinessUnit

Upstream Portfolio Is Diversified and Global

NorwayDraugen

UKCaptainAlbaBritanniaClair

CongoMoho Bilondo

Chad/Cameroon

KazakhstanTengizCPC

Karachaganak

PapuaNew

Guinea

NigeriaEscravos Gas Plant 3Escravos GTLAgbami

AngolaBlocks 0 & 14Angola LNG

AustraliaNorthwest ShelfGorgon

IndonesiaMinas/Duri

Thailand

China

PhilippinesMalampaya

Brazil9 offshore blocks

ArgentinaNeuquen and Austral Basins

VenezuelaBoscanHamaca

U.S.Gulf of MexicoSan Joaquin ValleyPermian BasinAlaska

CanadaHiberniaAthabasca

Colombia

PNZ

Denmark

Bangladesh


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The Oil Industry - Challenges

Operate in increasinglyextreme conditions

Reduced efforts in R&D

among operators

Less creative talent

Aging of technical talent pool -

The Big Crew Change


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From Spindletop to Deepwater . . .At Constant Price

1997 constant $ / bbl

0

10

20

30

40

50

60

70

80

1900 1910 1920 1930 1940 1950 1960 1990 20001970

1980

$20

Technolog y go t us here


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Finding & Development Costs $ / BBL (1999 constant)

0

246

810

12

14

1618

20

1982 1984 1986 1988 1990 1992 1994 1996 1998

Radical innovation has dramatically improved theefficiency of exploration & development

Cost of 3D Seismic / Km2 reduced bytwo-thirds since 1990

Exploration success rate up from10% in 1990 to 25% in 2000

Sources:

SPE European Petroleum Conference, Paris 2000BP Economist


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ChevronTexaco and peers have all successfullycut operating costs - What Next?

What about other opportunities to improve performance?

How do we continue to manage costs and improve value?

How can we drastically increase recovery factors?

NewChevronTexaco

Target?0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1988 1990 1992 1994 1996

Production

CostperBarre

l

1998 2010


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8Segment Updates - TechnologyBusinessUnit

Core Business TechnologyCapabilities Are Deeper and Broader

Deepwater E&P

Heavy oil recoveryand upgrading

Gas-to-liquidsMajor Technology

Programs

Shallow water

operations

Next-generation global

IT infrastructure

Gasification


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Key Business DriversUpstream Research & Development Strategy

Improved capital efficiency

Drilling technology & processes

More accurate delineation of sub-surface

Faster characterization of Reservoir Producibility

Greater operating efficiency

Faster cycle time & better decisions through Integrated Imaging-Modeling-Characterization-Simulation

Monitoring-Analysis-Simulation systematically linked to support Asset Teams,and enable improved operating efficiency


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Major ChevronTexaco Upstream TechnologyInitiatives - The Game Changers

Deep water production technology Commercializing stranded gas (LNG, GTL)

Increase recovery by implementing new sensors, tools andwork processes for subsurface

Key projects include:

Seafloor Processing

Dual Gradient Drilling and Intelligent Well Technology

INTERSECT- The Next Generation Reservoir SimulationModel

The Oil Field of the Future Project; Real Time ReservoirManagement


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2002 E&P Strategic Research PortfolioOverview

Seafloor Processing

Flow Assurance SystemsGas Hydrate Safety & As a Resource

In-Situ Heavy Oil Upgrading And Recovery

Lost Hills Diatomite IORNew and Emerging Well Technologies

Bright Water - Managing the Water Drive

Shale CharacterizationNext Gen Stratigraphic Characterization

Next Gen Seismic Imaging

Composite Risers

Next Gen Sparse 3D Petrophysics

Development of Reservoir Connectivity Mapping

Framework for Integrated Drilling and Earth Model

Applications

Rapid Well Construction, Design, and Simulation

New Reservoir Simulation Technologies

Oilfield of the Future

Subsurface Uncertainty


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ChevronTexaco 2001

DOC ID

Some Key R&D Focus Areas -The Game Changers


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ChevronTexacos Deepwater Presence

Exploration

Appraisal/Development

Production

Kui to

Agbami

Benguela

Belize

Tomboco

...

Malampaya

Geryon

Orthrus

...

BS-4Frade

ClaireNorwegian

Sea

Genesis

Gemini

Typhoon

...

Caspian

Sea

The combination of Chevron and Texacos portfolios resulted in a strong

deepwater position in key prospective basins worldwide.

The sharing of best practices and focus on innovative technology and projectmanagement will help the company achieve its profitable growth objectives.


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Seafloor Processing Collaboration

Today

2006

A New Field Development Option For DeepWater, Long Offsets And Harsh Environments


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ChevronTexaco 2001

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Concept: Seafloor Processing

Hydrocarbon / water separationSolids management

Power distribution

Multiphase Boosting

Produced WaterReinjection

System Modelling& Integration

Reliable Monitoring& Control

Water removal and re-injection in-field

Two phase production boosting to hostSolids removal & management

Options for gas separation

Why Seafloor Processing? Increase NPV relative to

floating facility alternatives

Improve viability of remotedeepwater developments

Reduce likelihood ofslugging, corrosion, andhydrate formation

Eliminate risers inchallenging environments

Reduce chemicalrequirements

Promote standardization &modularization to reduceFEE and allow pre-build ofcomponents

The potential prize:

$1/bbl for HP Oil,

$0.8/bbl for LP Oil

$0.07/MCF gas

15


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Joint Industry Programs play a key role in developing these types of technologiesfor the future.

Seafloor Processing Collaboration (SPC) - Phase 1

Troll Pilot (Norsk Hydro installed 3Q 1999)

60,000 BFPD throughput

2mW Water Injection Pump Centrifugal Flow Conditioning

Gravity Separation

Multiphpase Gas/Oil Export

Seafloor Processing Collaboration (SPC) - Phase 2

Collaboration of BP, ChevronTexaco, Kvaerner and ABB

Focus on oil-water separation, water reinjection and boosting

Ultimate goal is 100 km offset distances in 1500m water

Conventional and compact process equipment to be incorporated, withpilots for each category of technology

One year of 5 year development plan completed

16

Joint Industry Programs


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Managing the Reservoir Today

Reservoir management is generally episodic and reactive

Management of facilities separate from management of subsurface

SCADA is weakly exploited or integrated

Data is not merged and managedconsistently

No direct link between realtime data and numericalor geological models


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INTERSECT - The Next generation ReservoirSimulation Model

ChevronTexaco and Schlumberger are jointly developing aNext Generation Reservoir Simulator to replace eachcompanys current generation products (CHEARS andECLIPSE).

The research and development project, estimated to lastfour years, started July 2000

Located at ChevronTexacos technology center in SanRamon, CA.


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INTERSECT - The Next Generation ReservoirSimulation Model

The two companys are recognized leaders in reservoirmodeling and simulation technologies, and this project isan effort to combine the strengths of the two organizations

Goals are to develop a state of the art simulator using

modern, adaptable object-oriented software architectures Flexible software architecture should accommodate rapid

modifications to the simulator

At least 100% improvement in computational performance


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INTERSECT - The Next generation ReservoirSimulation Model

Effectively handle complex, non-regular gridding schemesrequired to more accurately represent reservoir and faultgeometries and modern complex horizontal and multi-lateral wells.

Current emphasis in reservoir modeling work processes onmore directly addressing uncertainty and risk andoptimization of subsurface and surface designs andoperations


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ChevronTexaco 2001

DOC ID

1969: Cross

disc ip l inary

cont ro l rooms

2001: Slow

loop p lann ing

and decision

2005: Slow

and fast loop

opt imizat ion

21

Oil Field of the Future

Business Driver: Improve AssetManagement through Fasterand Better Decisions

Today: spat ial data

Integrated sub-surfacesoftware platform allows

collaboration across G&Gand reservoir disciplines

Future: spat ial-temporal data

Integrate work processesbetween production andreservoir engineers

Combine control room andvisualization centers

Future Asset Management willbe continuous and proactive


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Reservoir Management Time Scales -Today

seconds 1 day 90 day 2 years 10 years

SafetyControl room decisionsEvent & fault responseMinimize downtime

System reconfigurationExport obligations

Choke & sleeve settingsLift system diagnosticsand optimizationNetwork optimization

Planning of simultaneousoperations on integratedoffshore platforms

Optimize reservoirdrainage, injection

Infill wellsRemedial well ops

RecompletionsSchedule interventions

Optimize investmentplanning

Optimize secondaryrecovery

Tie-in marginal fields

Operator

Optimization

Production

Optimization

Field

Optimization

Reservoir

RecoveryOptimization

Future

Passive seismic

moni to r ing

Near cont inuou s

se ismic moni to r ing

OperatorOptimization ProductionOptimization FieldOptimization

Reservoir

RecoveryOptimization


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When Technologies Converge, BreakthroughsWill Occur

Real TimeReservoir

Management

Visualization,Computing

andDatabase

Management

Intelligent Completions,4D Seismic, Fibre Optic Sensors

AdvancedReservoir

Interpretation,Optimization

Internet, Telecommunication


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The Road Ahead :2002-2010 Oil Field of the Future

Onshore control centers aiming atimproving the daily reservoir and assetmanagement of our fields

Continuous data from various sources isintegrated and managed

Early identification of discrepancybetween real and simulated data

Capable staff focus on high-potentialissues and complex problems

Sub-surface model refreshed with newinformation and knowledge

Real-time integration of field data intoreservoir and economic models


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Technology Exchange between Norway andChevronTexaco

Norway is in the lead in several areas for offshoretechnology

ChevronTexacos focus on improving hydrocarbonrecovery, deep water and gas technology is relevant to the

current NCS challenges Our technology focus may assist Norwegian Continental

Shelfs competitiveness (KONKRAFT)

Currently active in technology development


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Global Recruitment Needs


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0

10

20

30

40

50

60

70

80

90

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-xx

5%

10%

7%

16%

35%

20%

6%

1%

The Bulge gets Older

RetirementAge gets

Younger

Changing Demographics -Will we have Skilled Employees in 10 yrs?


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0

500

1000

1500

2000

2500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Total COPI Mobile Global Workforce Total Remaining Mobile Global Workforce

ChevronTexaco International Mobile GlobalWorkforce Gap


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ChevronTexaco Overseas TechnologyMobile Global Workforce

80%United States

7%

UK / Europe

3%

Canada

2%

Latin America

5%

Africa

2%

Asia / Indonesia

1%

Eurasia

45%United States

15%

UK / Europe

10%

Canada

10%

Latin America

10%

Africa

5%

Asia / Indonesia

5%

Eurasia


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Retirement

Vision of Mobile Global Workforce 2010

Percent of CurrentMobile GlobalWorkforce

Experienced HiresNational EEs fromCOPI SBUs andemployees fromother OPCOs

New Hires fromUniversities - bothUS & InternationalUniversities


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Hiring Strategies

Use new technologies and ideas to attract talent

ChevronTexaco website

e-Recruiting (internet, e-mail, etc.)

Employee referral incentive

Target critical skill sets


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Attributes

Energetic

Productive

Life Long Learners

Flexible/Adaptable

Collaborative

Show Initiative

Take Risks

Networking Capability


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Hiring Strategies-Diversity

Diversity is very important. We have made significantprogress towards hiring diversity candidates. Need tocontinue our search for strong visible diversity candidates

CPDN HIRING TREND: ETHNICITY

CPDN TOTAL- REGULAR HIRES

21%19% 17%

9%

5% 9%

3%

7%

13%

0%

10%

20%

30%

40%

50%

60%

70%

1997 1998 1999

PER

CENTOFTOTALHIRE

CAUC. FEMALE HISPANIC

BLACK ASIAN

INDIAN


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Specific Skill Sets

Key areas for specialization include:

Petroleum Engineering:

Reservoir Characterization and Reservoir Simulation

Well Completions

Drilling Engineering

Production Optimization

Facilities Engineering:

Instrumentation and Electrical

Process Engineering

Structural Engineering

Rotating Equipment

Earth Science:

Geophysics

Reservoir Characterization & Reservoir Management


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Hiring in Norway - Domestic Recruitment

Are currently hiring:

One graduate geologist

One graduate geophysicist

One graduate petroleum engineer For our longer term view, upon success, we will build a

workforce in alignment with our portfolio/business needs,drawing upon the indigenous talent pool in Norway

Documents

ChevronTexaco R&D Addresses Upstream Technology Challenges