February 2004 ESP-RIFTS JIP Overview Slide 1

ESP-Reliability Information and Failure Tracking System

February 2004 ESP-RIFTS JIP Overview Slide 2

Presentation Outline

� Rationale and Benefits � ESP-RIFTS Implementation Strategy� Development Timeline� Other Project Information

February 2004 ESP-RIFTS JIP Overview Slide 3

Rationale/Benefits

� Operators want to� Get a better understanding of the factors affecting ESP run life� Be able to forecast workover frequency in existent applications� Be able to predict ESP run life in different conditionsØ New applicationsØ Changing conditions in current applications

� How?� Accessing a large set of hard ESP reliability data

(avoiding educated guesses)� Making sure this reliability data is consistent

(avoiding misunderstanding)� Incorporating reliability engineering analysis tools� Benchmarking results against other operators� Learning from other’s experience

February 2004 ESP-RIFTS JIP Overview Slide 4

Objectives

� “… development of an industry wide Electric Submersible Pump (ESP) - Reliability Information and Failure Tracking System (ESP-RIFTS), which will permit sharing of ESP run life and failure information among a number of operators.”

� “… ultimate goals ... are two fold: (1) to accelerate the learning curve associated with new ESP applications; and (2) to increase average ESP run life and operating range, by transferring knowledge and experience across the industry”

February 2004 ESP-RIFTS JIP Overview Slide 5

Predicting ESP Run Lifefor New Applications

� Questions in field development feasibility studies� What is the expected ESP run life for the field?� What are the future service rig requirements for the field?� What type of equipment is best suited for a given application?Ø E.g., Is the run life for wells equipped with VSDs the same as wells

equipped with switch boxes?Ø E.g., Are coiled tubing deployed systems less reliable than systems

deployed on jointed tubing? If so, how much?� What is the effect of well completion type on ESP run life?Ø E.g., Should sand control (gravel pack) be used to prevent sand inflow

(but perhaps at the cost of lower well productivity)? Would the ESP run-life be acceptable if the sand is produced?

� What operating practices/conditions are best?Ø E.g., Should the wells be produced at a flowing bottomhole pressure

that is above the bubble point pressure to avoid failures associated with free gas?

February 2004 ESP-RIFTS JIP Overview Slide 6

Early Stages of a Feasibility Study

� How ESP run-life affects the project economics?� Offshore Platform ExampleØ 20 WellsØAverage oil production per well: 600 bopdØAverage intervention cost: 100 k (10 days @10k/day)ØAverage equipment cost: 100 kØAverage workover & waiting time 30 days

� Onshore ExampleØ 50 wellsØAverage oil production per well: 60 bopdØAverage intervention cost: 10 k ØAverage equipment cost: 30 kØAverage workover & waiting time: 7 days

February 2004 ESP-RIFTS JIP Overview Slide 7

Total Workover Cost vs. ESP Run Life (Offshore)

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as percent of revenue

* includes production losses (US$25/bbl)

@ low run livesprojects becomeuneconomical

@ good run livesprojects becomeeconomical

February 2004 ESP-RIFTS JIP Overview Slide 8

Total Workover Cost vs. ESP Run Life (Onshore)

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as percent of revenue

* includes production losses (US$25/bbl)

@ low run livesprojects becomeuneconomical

@ good run livesprojects becomeeconomical

February 2004 ESP-RIFTS JIP Overview Slide 9

Identifying Opportunities:Production Increase and Cost Reduction

� Am I doing the best I can? (compared to others)� It would be nice if I could:Ø Benchmark my run life against other operatorsØ Learn from the experience of others

� Should I upgrade equipment specifications (e.g. trim) to improverun-life?

� Should I start using refurbished equipment to reduce costs? � If something changes, how would this affect the failure rate?� The field water cut has increased; should I try higher HP

systems?� The field GOR has increased; should I try rotary gas separators?Ø E.g., which option is better:

a) 600 bopd and > 360 day ESP Run life, without RGSs, orb) 900 bopd and < 360 day ESP Run Life, with RGSs

February 2004 ESP-RIFTS JIP Overview Slide 10

Identifying Opportunities for Improvement (example)

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Well Yearly

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* Includes production losses (US$15/bbl)

"Opportunity Cost" associated with loss of

300 bopd

With Rotary GasSeparator@ 900 bopd

With Static GasSeparator @ 600 bopd with considering the potentialadditional 300 bopd as loss production

Without Rotary Gas Separator

@ 600 bopd

February 2004 ESP-RIFTS JIP Overview Slide 11

Difficulties in predicting ESP Run Life

� Run life depends on a number of application attributes (field characteristics, well design, completion, fluid properties, equip. specs., etc.)

� Confidence in ‘models’ to predict run life is a function of the range of the historical data that the models are based on� Uncertainty increases when the volume of ‘similar’ data is

small

� Most ‘failure databases’ lack the breath of application characteristics needed to predict ESP run life in new situations

February 2004 ESP-RIFTS JIP Overview Slide 12

We want to share data

� Sharing of reliability data is a recent Industry trend � Turner,W.: “Methods to Assess the Reliability of

Downhole Completions: The Need for Industry Standards”, 2000 OTC (OTC 12168): � “Although the need to reduce failures and minimize risk

has brought about increased desire for operating companies to share information, no industry standardshave been established for reliability assessment of completion equipment. … Establishment of a database to assess the reliability ofdownhole equipment will involve a comprehensive industry-wide effort to collect data and to ensure that quality is to a high standard.”

February 2004 ESP-RIFTS JIP Overview Slide 13

We want to share data ... Why?

� Sawaryn, S. and Ziegel, E.: Statistical Assessment and Management of Uncertainty in the Number of ESP Failures in a Field”, 2001 SPE ATCE (SPE 71551): � “This study shows that large amounts of failure data

covering a wide range of operational conditions will be needed to gain a quantitative understanding of the factors affecting run life. Individually, neither the operators, nor the ESP vendors have access to all the data required and an industry-wide sharing of failure data may be the only route to success.”

February 2004 ESP-RIFTS JIP Overview Slide 14

Ultimate Project Objective

� To provide a framework to facilitate the sharing of ESP Run Life Information among Operators� Failure Information; and � Other Pertinent Data

� Participants have a key role: � They are the main source of information, knowledge, and

experience� C-FER is mainly a facilitator: � Working with the Participants to ensure that sharing takes

place effectively� Being responsible for the development and maintenance of

“tools” to support and foster the effort� Acting as caretaker of Project Information� Investigating differences in performance between

operations

February 2004 ESP-RIFTS JIP Overview Slide 15

• System Maintenance• Processing and Qualification

ESP-RIFTS

End Users

World-Wide Network

System Concept: Interface

� Multiple users world-wide� Internet interface

http://www.esprifts.com

February 2004 ESP-RIFTS JIP Overview Slide 16

Improving ESP Run Life

� All stages in the process affect ESP run life

� Influential Factors � Operational practices

(Qualitative)� Operational Conditions

(Quantitative)

� It is important to track not only failure information, but all other pertinent information

Knight and Bebak, OTC 12171, 2000

February 2004 ESP-RIFTS JIP Overview Slide 17

System Concept: Structure and Operation

Field Data

Well andEquip.Data

Failure Data

Failure Distributions

MTTF Comparisons

MTTF Trends

MTTF Predictions/Survivability

SystemConditions

Min. Data Set

Complete

Consistent

Accurate

Production/Operational

Data

Existing DBs

Anticipated FailureMechanisms

QualifiedData

Process Data Qualify Data Analyze Data

UnqualifiedData

ReliabilityFunctions

What-If?

Tables andCharts

February 2004 ESP-RIFTS JIP Overview Slide 18

Web Site Access

� Anyone with Internet access can browse the public web pages to learn about the project, the System, and who to contact to become a Participant

� Only Users with a valid User Name and Password combination (i.e., a login account) are granted access to the protected area of the site

February 2004 ESP-RIFTS JIP Overview Slide 19

Project WebsiteUSERS

Public pages

Protected pages

Home page- About- Login- Contacts- Notice

About- What is ESP-RIFTS- Participants- Public presentations- Additional Information

Contact- C-FER e-mail- Project manager

Login- Enter valid user name and password combination

User Login Accepted

General- What’s New- New Data- New Features of web site- Downloads

Query Data- Construct and execute query

Examine Data- View Results

Help- On-line help- FAQ

Sign-Out

Notice- General description of site-Copyright, etc.-Minimum System Requirements

Results- View tables and charts- Construct Pivot Tables- Run-Life Estimates- Reliability Analyses- Statistics- Print Summary reports

World-Wide Network

Analysis- Run-life Estimates- Reliability Functions- Comparative Analysis

February 2004 ESP-RIFTS JIP Overview Slide 20

Conducting Analysis

� In general, all analysis conducted in the ESP-RIFTS website consist of a two-step process:1. The User uses one of the five query wizards to construct

and execute a query on the database to retrieve those records of interest

2. The User can then� Examine the contents of the records returned� Prepare summary reports� Group data by variables� Construct charts� Calculate run-life estimates� Calculate reliability variables� Evaluate the statistical uncertainty/confidence in the

calculated run-life estimates

February 2004 ESP-RIFTS JIP Overview Slide 21

What-If Module

� The ‘What-If’ module is a method to predict expected run-life and predominant failure mechanisms (e.g., item and descriptor) for a specific set of influential factors

� The method is calibrated with existing data� But its predictive capabilities extend beyond the range of

the data� Applications� New ESP Applications (e.g., Economic and Feasibility

Studies on a new discovery):Ø For a new application, given a few key parameters, what would

the expected run-life be for a given type of ESP System?� Existing ESP ApplicationsØ If something was changed (e.g., fluid properties, ESP system

design, etc.), what effect might the change have on ESP run-life and on the types of failures that occur

February 2004 ESP-RIFTS JIP Overview Slide 22

System Features

1. Standard terminology for classifying, recording and storing ESP failure information (as per the ESP Failure Nomenclature Standard)

2. Common set of parameters to be tracked by all Participants in the project (as per the General Data Set)

3. Procedure to ensure certain standards of data “quality”4. Database structure to store the data collected5. Data Input Spreadsheet, based on Microsoft Excel to assist in

data collection (with analysis capabilities as well)6. Internet based system to enable Participants to select

records of interest, examine the contents of such records, and conduct a variety of analyses with them

February 2004 ESP-RIFTS JIP Overview Slide 23

Growth of Database

16731739 1854

3593 3940

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90919366

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1260613643

6856

y = 2E-24e0.0017x

R2 = 0.9606

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Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04

Date

Numberof

ProductionPeriods

February 2004 ESP-RIFTS JIP Overview Slide 24

Locations of Fields in ESP-RIFTS

February 2004 ESP-RIFTS JIP Overview Slide 25

ESP-RIFTSFailure Nomenclature Standard

� A standard terminology for classifying, recording and storing ESP failure information,

Ø Leading to consistency in failure analysis performed with data gathered by different operating and service companies

� Conforms to (as much as possible): 1) International Standard ISO/DIS 142242) API RP 11S1

� In general:� Broad definitions and failure attribute classifications were

borrowed from the ISO/DIS 14224� Nomenclature for components, parts and teardown

observations were borrowed from the API RP 11S1

February 2004 ESP-RIFTS JIP Overview Slide 26

General Data Set

� The recommended list of 118 Parameters that an ESP-RIFTS “Failure” record should contain

� Field/Well/Fluid/Reservoir data

� Run time informationØ Install, Start, Stop, Pull dates, etc .

� Production and Operating Information

Ø Producing rates, operating conditions (Speed, Current, etc.), GOR, BSW, Wellhead Pressure and Temperature

� Equipment dataØ Model, rated capacity (head, rate,

power, etc.), dimensions, materials and trim, etc.

Ø Manufacturer “Catalogue” information

� Failure informationØ Mode, Item(s), Descriptor(s), Cause,

and associated comments (as per Standard)

February 2004 ESP-RIFTS JIP Overview Slide 27

Data Input Sheet

� Multi-sheet Microsoft® Excel workbook

� Developed to assist in data collection and qualification

� Field level data capture and tracking

� A number of analysis features (e.g., average run life, MTTF, reliability and statistical analyses)

� CONFIDENTIAL and proprietary to C-FER and ESP-RIFTS JIP Participants

February 2004 ESP-RIFTS JIP Overview Slide 28

Project Status

� Phase I: November 1999 – July 2000 � Phase II: August 2000 – April 2001� Project Web Site: online since July 2000

� Phase III: May 2001 – April 2002� Phase IV: May 2002 – April 2003� Phase V: May 2003 – April 2004� Phase VI: May 2004 – April 2005

� Current Participants: � BP� ChevronTexaco� EnCana� ExxonMobil� Kuwait Oil company� PDVSA

� Petrobras� Saudi Aramco� Shell� Repsol-YPF� Total

February 2004 ESP-RIFTS JIP Overview Slide 29

Benefits to New ParticipantsImmediate Benefits

1. Immediate access to the system - user accounts will be assigned to a number of New Participant personnel

2. Ability to query the data and conduct analyses - display the results in a number of numerical and graphical formats

3. Improved ability to make good decisions on issues affecting ESP run life

4. Access to about US$ 800,000 worth of work conducted in the previous phases of the JIP (phases I - V)

5. Two-day workshop (at a location of choice) to quickly bring the New Participant personnel up to speed

6. Improved understanding of run-life and failure tracking issuesand analysis techniques

7. Opportunity to upgrade current ESP failure tracking systems to the ESP-RIFTS standard:� Achieving consistency within own Company� Achieving consistency within the group of industry Participants

February 2004 ESP-RIFTS JIP Overview Slide 30

Benefits to New ParticipantsLong-Term Benefits

1. Business results, which can span over a variety of aspects, including:� Improved chances of overall economic success in new projectsØ Because there will be less uncertainty in the expected run-life

� Reduced production losses in the upcoming yearsØ Because improved rig scheduling will be possible

� Improved overall run-life and reduced operational costsØ Because best practices can be implemented

2. Business results can start to be obtained as soon as possibleØ In terms of run-life, the effects of good decisions made at one point in

time are only felt in the long term3. Ability to make direct benchmark comparisons

Ø Within own Company’s operations Ø Within the Participants' operations

4. Guidelines for negotiations between the Participant and ESP vendors (e.g., as in alliance situations)

Ø Using benchmarks established with the system

February 2004 ESP-RIFTS JIP Overview Slide 31

Fee StructureYear 2004/2005 (Phase VI)

� New Participant Fees � Entrance Fee: US$30,000 (one-time)� Surcharge Fees: US$ 5,000 (over first three years of participation)Ø Covers� Initial Development Cost Sharing� New Participant Orientations� Mapping and Input of Historical Data

� JIP Participation Fee - Year 2004/2005 (Phase VI)� US$35,000Ø Covers Core Tasks � Data Processing and Qualification � Data Analysis (within the limits of the System)� Web Site Maintenance � Project Meetings (Oct/Nov 2004 and Apr/May 2005)� Project Management and Reporting

February 2004 ESP-RIFTS JIP Overview Slide 32

Further Documentation Available

� Project web site: http://www.esprifts.com

� General Information on the ESP-RIFTS JIP� Benefits to New Participants:

http://www.esprifts.com/General_Information_Benefits.04Feb13.pdf� Detailed work scope, deliverables, and milestone schedule for

Phase V: http://www.esprifts.com/Phase_V_Deliverables.03Mar27.pdf

� 2001 SPE - ESP Workshop Paper� “ESP Failures: Can We Talk the Same Language?”

� 2003 SPE-ESP Workshop Paper� “Benchmarking ESP Run Life Accounting for Application

Differences”

� For addition information, please contact:Francisco Alhanatitel: (780) 450-8989 ext 253e-mail: f.alhanati@cfertech.com