HPHT Performance Review 2008

A Review of the Performance ofCesium Formate Brines in 150Challenging HPHT Drilling and

Completion Operations, 1999-2008

John DownsCabot Specialty Fluidswww.formatebrines.com

SPE Chennai 16 July 2008

Cesium formate

SG 2.3

Key features of cesium formate brinein one slide ......

High-density clear brine SG 2.3 (19.2 ppg) Drilling and completion fluid for HPHT wells Supplied on rental terms Very rare/expensive fluid: may cost > US$ 1 million/well Improves project economics (which is why it is used!)

- Faster/safer well construction, lower NPT- Improves well productivity- Reduces risk and liability


Advances in technology through innovation

Advances in technology occur through either:

Incremental (evolutionary) innovation- Minor or step-wise improvements to existing technologies

Radical (revolutionary) innovation- Pathbreaking advances in technology that generally defy existing conventions and offer a radically new solution to a need or problem


Revolutionary advances in well constructionfluid technology

In the period 1920-1980 three revolutionary innovations shaped the designof well construction fluids:

Solid weighting agents- Use of barite in drilling muds gives hydraulic well control and improved wellbore stabilisation

Oil-based muds- Improved ability to maintain wellbore stability in shale

Soluble weighting agents- Use of bromide brines as clear high-density completion fluidsprovides well control without solids


Subject and outline of presentation

Introducing cesium formate brine the 4th revolutionaryinnovation in well construction fluid technology

The problem definition- HPHT operations, where the first three revolutionary innovations fail

The development of the 4th revolutionary innovation- The pioneering research on cesium formate brine by Shell- The properties of cesium formate brine

Production and deployment of cesium formate by Cabot User feedback from > 150 HPHT operations

- Has this innovation worked? Where? Why? How?


Modern HPHT well constructions whereprevious revolutionary fluid innovations fail

Weighting solids- Bad effect on circulating pressure losses and ECD- Potential to sag, causing well control risk- Gels required, causing high swab/surge pressures- Can create thick filter cakes, encouraging differential sticking risk

Drilling muds based on oil or synthetic hydrocarbons- Solvent for natural gas, creating a well control risk- Gas/condensate influxes can destabilise OBM, causing barite sag

High-density bromide brines as soluble weighting agents- Source of localised corrosion and SCC failure of CRA tubulars- HSE hazard and creation of additional risk/liability


Risks posed by traditional drilling andcompletion fluids in high-angle HPHT wells

Use of oil, barite or halide brines in HPHT well construction fluids canhave significant effects on project economics, safety and liability

Loss of well control Differential sticking and loss of hole/string Loss of well integrity and zonal isolation Reduction in well productivity


SCC of Cr-steels in CaBr2 brine at 320oF,0.2 bar O2 (CO2 gives same problem)

Downs et al, Royal Society of Chemistry Chemistry in the Oil Industry ConferenceManchester, UK, 1st November 2005

Super 13Cr, 1 month 22Cr, 2 months 25Cr, 2 months


9Severe and long-lasting skin injuries dueto contact with halide brines and powders

- Deep skin necrosis injuries taking up to five months to heal


Risk of liability, clean up costs and fines asa result of zinc bromide spillage/leakage

Zinc is a toxic heavy metal and there are financial consequences tolosing zinc bromide to the environment (even via production stream)

Priority marine pollutant Heavy fines for polluting aquatic and onshore environment Substantial clean up costs, and any contaminated waste is

classified as hazardous Financial consequences of contaminating your production

stream Cost of HSE risk can be quantified using new BrineWise

software program from Gaia Consulting


Making a better drilling and completion fluidfor HPHT well construction projects

Remove all weighting solids, oil and halides to correct the fluidperformance deficiencies

Reduce the flow resistance Improve well control Reduce local corrosion and SCC Reduce HSE risk, liability and associated financial penalties


12

New drilling and completion fluid developmentin Shell, 1990-97

Objective: Design an improved HPHT drilling-in and completion fluidthat was free of troublesome components

Free of barite Free of oil Free of halides


13

Shells research strategy base the newfluid on a non-halide brine

Required brine properties Density to at least 19 ppg Safe Minimal environmental impact Non-corrosive Compatible with elastomers Minimal formation damage Shale stabilising


The formate brine family

NaCOOH KCOOH CsCOOH1.0 S.G.8.3 ppg

1.3 S.G.10.8 ppg

1.57 S.G.13.1 ppg

2.3 S.G.19.2 ppg


15

Formate brines ideal non-halide brines

Sodium, potassium or cesiumformates dissolved in water

Density up to 19.2 ppg Non-toxic Safe to handle, pH 9-10 Classified as PLONOR (PARCOM) No limitations on cuttings

disposal (except in GOM) Non-corrosive, no SCC Protect against CO2 corrosion Minimise formation damage Provide protection for polymers against thermal degradation

Cesium formateSG 2.3


16

Formate brines ideal non-halide brines

Lubricating Hydrate inhibition Compatible with Aflas, Kalrez and Chemraz elastomers Not compatible with elastomers that are sensitive to alkaline fluids

(e.g. Nitrile, Viton)

Positive influence on shales- reduce shale swelling- reduce filtrate invasion- reduce pore pressure penetration- induce osmotic back-flow


Cesium formate SG 2.3

Formates and the marine environment

Formate ion is readily biodegradable to CO2 and H2O The alkali metal ions are all prevalent in seawater

- 2nd (Na), 6th (K) and 29th (Cs) most abundant

One cubic mile seawater contains 1,700,000 tonnes of K ion! Full wellbore of K formate brine contains 170 tonnes of K ion Discharge of wellbore full of 13 ppg K formate brine:

- Increase K levels by 1.7 mg/l in 1 km3 sea - Temporary increase of 0.45% above base levels


18

Formates environmental risk assessment

METOC plc* carried out a comprehensive (350-page)environmental risk assessment on formate brines

Main conclusion:The discharge of moderate amounts of formate brinesinto the marine environment is not likely to cause significantenvironmental impacts

* Environmental risk management consultants www.metoc.co.uk


Clear formate brine being reclaimed from usedcesium formate drilling mud, using RVF


No stress corrosion cracking of CRA informate brines

1.7 SG K/Cs formate, 160oC, 10,000 ppm Cl with 0.2 bar O2

Ref : SPE 100438Ref : SPE 100438

Super 13Cr, 3 months Duplex 22Cr, 3 months Duplex 25Cr, 3 months


Traditional formate drilling fluid formulation(for up to 320oF)

Component Function Concentration

Formate brine

DensityLubricity

Polymer protectionBiocide

1 bbl

XanthanXanthan ViscosityFluid loss control 1 1 2 ppb 2 ppb

PAC or modified starchPAC or modified starch Fluid loss control 4 4 8 ppb 8 ppb

Sized calcium carbonateSized calcium carbonate Filter cake agent 15 15 20 ppb 20 ppb

KK22COCO33/KHCO/KHCO33Buffer

Acid gas corrosion control 2 2 8 ppb 8 ppb


New-style formate drilling fluid formulation(for up to 500oF)

Component Function Concentration

Formate brine

DensityLubricity

Polymer protectionBiocide

1 bbl

Synthetic polymer ViscosityFluid loss control 5 5 15 ppb 15 ppb

Sepiolite Fluid loss control 5 5 8 ppb 8 ppb

Graphite coated CaCOGraphite coated CaCO33 Filter cake agent 10 10 20 ppb 20 ppb

KK22COCO33/KHCO/KHCO33Buffer

Acid gas corrosion control 2 2 8 ppb 8 ppb


Formate-based drilling fluids


Formate brines theoretical drilling benefits

Reduced risk of differential sticking

Very thin lubricious filter cakes Reduced risk of differential sticking at high overbalance



Better hydraulics Lower Surge and Swab Pressures

- Faster tripping times- Reduced risk of hole instability or well control incidents

Lower System Pressure Losses- More power to motor

Lower ECD- Drill in narrower window between pore and fracture pressure gradients- Less chance of fracturing well and causing lost circulation

Higher Annular Flow Rates- Better hole cleaning



Improved well control and reduced risk Barite sag eliminated Thermal equilibrium reached quickly

- Reduces flow-check time

Low methane solubility and diffusion rates- Easier kick detection- Low rate of static influx

Mud properties not degraded by gas influxSolubility of methane in drilling fluids: T = 300F (149C), P = 10,000 psi (690 bar)

Fluid Solubility (kg/m3)Diffusion coefficient

(m2/sec x 108)Diffusion flux(kg/m2s x 106)

OBM 164 1.15 53.30WBM 5 2.92 3.98

Formate brine 1 0.80 0.25


Shells conclusion at the end of theirlaboratory testing of formate brines in 1996

In theory, formate brines should make greatly improved HPHTdrill-in and completion fluids

Solids-free: better hydraulics, no sag, lower sticking risk Oil-free: better well control Halide-free: better corrosion control Stability: viscosity and FLC stable to at least 170oC Non-damaging: better well productivities Low environmental impact: no need to treat cuttings

(except in GOM) Lubricious: lower torque and drag

Validated by first HT drilling trials with potassium formate in 1996 (see SPE 59191 by Mobil) but . no cesium formate available for HPHT wells requiring > SG 1.57/13.1 ppg


1993 Cabot buys tantalum mine at Lake Bernic, Canada1996 Cabot invests $ 50 million in cesium mining and extraction plant at site1998 Producing ~700 bbl/month of cesium formate brine

29

Cesium formate produced in Canada frompollucite ore

Pollucite oreCs0.7Na0.2Rb0.04Al0.9Si2.1O6(H20) Mined at Bernic Lake, Manitoba Processed on site to Cs formate brine Cs formate brine production 700 bbl/month Brine stocks > 30,000 bbl


31

Cesium brines for HPHT and extremeHPHT well operations

* Currently being used in Mako-6 well, Hungary: BHST 235oC


Cesium salt Formula Max. density (SG) Temp. limit? (oC)

Cesium formate CsCHO2 2.3 > 235 *

Cesium acetate CsC2H3O2 2.2 > 300

Cesium carbonate CsCO3 2.2 > 300

Cesium citrate CsC6H8O7 2.4 > 200

Cesium tungstate Cs2WO4 2.9 > 300

Cesium molybdonate Cs2MO4 2.7 > 300

32

First field trials of cesium formate brineby Shell September 1999 August 2002

17.20 18.86 ppg completion and workover fluid in six wells

Shell Shearwater field UK North Sea Gas condensate reservoir 15,000 psi BHST 365oF


Elgin and Franklin HPHT fields


Elgin and Franklin HPHT fields

110

400 500

Other Operator

Elf Non-Operating Partner

600 700 800

Initial Reservoir Pressure (bar)

900 1000 1100 1200 1300

160

Tem

per

atu

re (

C)

210

Elf Operator

Arun

Kotelnevsko

F15

Lacq

Lille Frigg

Mary Ann

Embla

Puffin

Eugene Island

Block 823

Erskine

TenguizMalossa

Trecate

Shearwater

ElginFranklin

Thomasville

West Cameron

North Ossum

Norphlet 863


35

Use of cesium formate by TOTAL in theElgin/Franklin field November 1999 present

18.2 ppg completion fluid in eight wells

UK North Sea Worlds largest HPHT field Gas condensate reservoir 16,000 psi @ 20,000ft BHST 400oF 140,000 bbl/day of condensate 13 million m3 gas /day Brine left in wells for up to 24 months (well suspension)


36

First drill-in and completions by Statoil withcesium formate brine January 2001 April 2002

Huldra field, offshore Norway, Gas condensate- BHST: 297oF- Fluid density: 15.75 ppg- Six wells 600 ft reservoir sections 5-7/8 at 45-55o- 12,000 mD sandstone- Open hole, wire wrapped screens

Justification for using formate- Improve well control- Lower ECDs- Run completion in same fluid- Low risk of screen plugging- Shale stabilisation- Lubricating- Safe for crews- Environmentally benign


Highlights of Huldra drill-in and completion(ref: SPE 74541)

Good well control (e.g. no barite to sag) Low ECD ROP similar to OBM Stable hole in reactive shales Good hole cleaning slick hole on trips Smooth sand screen run in Faster tripping Rig time savings Log interpretation manageable Plateau production from first three wells 10 MM m3 gas /day and 30,000 bbl/day condensate


Current drill-in and completions by Statoilwith cesium formate brine June 2004 present

Kvitebjrn field, 16-well programme- BHST: 311oF/155oC- Fluid density: 17.40 ppg- Eight wells so far 1000 ft reservoir sections at 24-30o- Long interbedded shale and coal sequences- Two completed with liners, six with screens

Justification for use (see SPE 105733):- Increase production (see Huldra production)- Improve well control- Lower ECDs- Good Health and Safety (safe to handle)- Low environmental impact (see Agips use of formate brines in the Barents Sea)


Highlights of Kvitebjrn drill-inand completion (see SPE 105733)

Good HPHT well control no incidents in two years Low ECDs (lower than OBMs) Moderate to high ROPs Excellent well bore stability Good hole cleaning No stuck pipe. Low torque and drag Smooth sand screen run ins (4 out of 5) Good wireline logging runs (22 out of 24) LWD drill and ream pass data gives reliable and consistent net reservoir definition Log interpretation matches core porosity High production rates with low skin


Perforating in solids-free oil-based kill pillweighted with cesium formate brine

Visund field- BHST: 118oC- Fluid density: SG 1.65-13 wells 1000-2000 metre horizontal sections- Drilled with OBM ,completed with perforated liners

Justification for use- First 3 wells badly damaged by CaBr2 kill pill- PI only 60-90 m3/bar/day


Perforating in solids-free oil-based kill pillweighted with cesium formate brine

Visund Change to formate- based kill pill (see SPE 73709, 58758 and 84910)- Next three wells perforated in formate fluid- Also used new perforating guns, in dynamic underbalance

Results- Eliminated formation damage problem- PI increased up to 900 m3/bar/day- 300-600% PI improvement- Best well: 53,000 bbl/day

Formate brine

Bromide brine


Perforating in cesium formate brinekill pill BP Rhum field

Water depth: 108 m

Field concept: 3 Subsea Wells with 40 km tieback

Reservoir type: High UCS sandstone

Reservoir depth and BHST: 4745 m TVDss and 150oC


Perforating in cesium formate brine kill pill BP Rhum field (ref OTC 19242, 2008)

5-1/2 DP to surface

7 Liner top9-5/8 Casing shoe

Flow restrictors

3.5 Drillpipe to space-out

4.72" PerfoXtreme Guns PJ4505HMX 5 SPF -72 phasing

Dynamic underbalance perforating with guns deployed on drill pipe was seen as the simplest and most cost effective solution

Modelling indicated possibility of achieving same productivity as underbalanced perforating

Reduces operational complexity for completing large intervals


Cesium formate brine kill pill formulation forRhum dynamic underbalance perforating

Formate brine SG 1.94

Xanthan 1 ppb

Modified starchFL7plus 6 ppb

ULV PAC 6 ppb

Potassium carbonate 5 ppb

Calcium carbonatesolids 30 ppb

Based on standard formate drilling mud formulation for HPHT wells used since 1996

High yield point: 65-80 Designed to provide fluid loss control for at least 72 hours at 149C

62% return permeability in laboratory core flood testing (clear brine gave 84%)


Perforating Rhum wells in cesium formate killpills conclusions (OTC 19242)

Combined use of dynamic underbalanced perforating (PUREsystem) and Cs formate brine brings significant HSE benefits- Keeping the well in overbalance until tubing hangar landed- Facilitating perforating on DP in long reservoir intervals- Eliminate the need to bring hydrocarbons to surface during perforating operations

Low mechanical skins confirm that Cs formate is non-damaging


Cesium formate applications 1999-2008

Over 150 HPHT jobs in 30 fields N. Sea, Europe, GOM, SouthAmerica and Asia Pacific. Usually four jobs four jobs in progress most in progress most monthsmonths Drill-in Completion/workover

- as a brine and in LSOBM formulations (13.8 ppg)- stand-by kill pill- outstanding as HPHT perforating kill pill (Visund, Braemar, Judy, Rhum)

Long-term well suspension Well testing Stuck-pipe release pill (OBM drilling) Melting hydrate plugs


Cesium formate use segmented by application


Cesium formate brine use segmented by operator


Feedback from users extracts from SPE papers

General Major operational success Drilling benefits have given rig time savings Reduced the time to complete well Transition from drill-in fluid to completion fluid was simple For our specific well conditions there was no other alternative Selected cesium formate to minimise well control problems and maximise well productivity


Feedback from users extract from TOTAL presentation to IADC*

HSE

By deploying cesium formate brines in the Elgin, Franklin andGlenelg fields, TOTAL has created new health, safety andenvironmental standards for completion and work over brinesin the North Sea

Other oilfield operators have followed suit, and to our knowledgezinc bromide brines are no longer used anywhere in Europe.

* Presentation to IADC World Drilling conference, Paris, June 2007 and article in Drilling Contractor magazine, June 2007 issue



Well control

No well control or loss situation Extremely good well control environment No sag potential Elimination of gas diffusion into horizontal wells Well stabilises quickly during flow checks Unique track record: 15 HPHT wells drilled and completed with cesium formate brine without one well control incident



Hydraulics ECD is s.g. 0.04 0.06 (0.30 0.50 ppg) lower than OBM Reduced ECD improved ROP in hard formations Fast tripping speeds ECDs higher when drilling clay than when drilling sand

Lubrication Torque values indicate friction factors as low as 0.22 No need to add lubricants Low torque and drag



Hole stability and cleaning Good hole stability in interbedded sand and shales Good hole stability Caliper log of 8-1/2 hole shows 9 in shale sections.. Good hole cleaning Wash-outs up to 20 in 8-1/2 hole at 45o inclination Even after a few weeks of open hole, hole sizes over 9.5 have been very rare

Differential sticking Low potential for differential sticking No incidence of stuck pipe


Feedback from users TOTALs presentationto IADC on the cost* of using Cs formate brine

Elgin wellBrine costs*

($, 000)

G3 913

G4G4 830

G5 602

G6G6 879

G7G7 807

* Includes all brine rental, losses and reconditioning charges


Conclusions

Cesium formate brine represents the 4th revolutionary innovation in well construction fluid technology

Original innovation from Shell but produced, marketed and serviced by Cabot Specialty Fluids

Field use has proven that cesium formate brine provides important benefits in challenging HPHT well constructions:

- Enhanced drilling performance- Improved well control- Good well productivity- Enhanced formation evaluation with LWD tools- And an excellent HSE profile!


Cesium formate is available and beingused in Asia Pacific

The West Prospero rig used for three completions with Cs formate brine in ExxonMobils Tapis field, Malaysia, 2007

Shell Brunei used cesium formate brine last month


Key features of cesium formate brine inone slide ......

High-density clear brine SG 2.3 (19.2 ppg) Drilling and completion fluid for HPHT wells Supplied on rental terms Very rare/expensive fluid: may cost > US$ 1 million/well Improves project economics

- Faster/safer well construction, lower NPT- Improves well productivity- Reduces risk and liability


BrineWise

A Tool for Pricing and Comparing theOperational Costs, Waste and HSE Risk

of Completion Fluids


How BrineWise compares the true cost ofcompletion fluid options

Cost of using fluid

(waste, time,

handover to

production etc.)

Fluid costs

(price per bbl) + =Operational

Costs related

to fluid choice

Operational

Costs +HSE related

costs =Overall

fluid related

cost for well

HSE costs

Consent &

Transport +Cost of HSE risk

(scenario based) =HSE related

costs related

to fluid

choice

Cost of using fluid

(waste, time,

handover to

production etc.)

Fluid costs


Costs related

to fluid choice

Cost of using fluid

(waste, time,

handover to

production etc.)

Fluid costs


Costs related

to fluid choice

Operational

Costs +HSE related

costs =Overall

fluid related

cost for well

HSE costs

Consent &



costs related

to fluid

choice

HSE costs

Consent &



costs related

to fluid

choice


Currency

US$US$US$US$US$US$US$US$US$US$US$US$US$US$US$

Currency

20 % 1 % 20 % 1 %

Scenario 1 type incidents (ROAD) Yes 9 600 48 813 269 615 2 583 856 US$Scenario 2 type incidents (STORAGE) Yes 2 734 116 950 13 930 390 950 US$Scenario 3 type incidents (SHIPPING) Yes 6 600 34 000 309 615 1 827 575 US$Scenario 4 type incidents (RIG) Yes 6 600 34 000 309 615 1 827 575 US$

6 384 58 441 225 694 1 657 489 US$

Currency

US$

US$

US$

US$

US$

US$

0 00

020 000

00

00

0 20 000

0

245 694

COST OF RISKCesium Formate Zinc Bromide

20 000

Zinc Bromide

0

0

FLUID AND OPERATIONAL COSTS

Use of fluid

Cesium Formate

0

00 0

0

ShippingPersonal protectionSuboptimal rig timeDelay in production

Fluid lossesOnshore transport

Fluid related other operational costs 0

225 694

58 441 1 657 489

6 384

1 677 48958 441

Cesium Formate

0

6 384

0

1 861 81 714

00

0

0 0

Zinc Bromide

Additional cost, which is at risk to occur during WC (with

larger than average incident confidence 1 %)

Other, please specifyTotal operational costs

COST SUMMARY

Average cost of incident consequences

Included in

comparison

Operations as planned (79 % of wells)

Operations outside planned (small to average HSE

consequences, 20 % of wells)Operations outside planned (larger than average HSE

consequences , 1 % of wells)

Average cost per well

Additional cost, which is at risk to occur during WC (with

small to average incident confidence 20 %)

Total waste fluids, ship-to-shoreProduced water treatment on rigWaste disposal

Other, please specifyCost of brine, contaminated production stream

COMPARATIVENORMAL

OPERATIONALCOSTS

COST OF HSERELATED RISK

COMPARATIVEAVERAGE COST

PER WELL(taking into

account HSE risk)

COSTS AT RISKFOR THE

ALTERNATIVES

COMPARATIVEFLUID COSTS


The benefits of BrineWise

Combine fluid cost with operational cost- Takes into account the cost of using the fluid as well as price per barrel

Compares completion fluid alternatives- Default values given for cesium formate vs. zinc bromide 1) Calculator is not chemical specific 2) Some tailoring is required for other fluids to be compared

Based on using operation-specific data to arrive at overallprice tag- No database, no numeric simulations = no false assumptions- Allows data relevant to your operation to be included

Allows HSE risk to be taken into account as cost items- Based on direct costs and related to operators own experience through1) Setting incident frequencies (incident record/expectancy, risk aversion)2) Putting a value tag on HSE through weighting


BrineWise calculates four cost scenarios

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

Fluid costs only Normal operation

costs

Costs of an

incident w ith

small to average

consequences

Costs of an

incident w ith

larger than

average

consequences

US$

Cesium Formate Zinc Bromide


BrineWise key management benefits

BrineWise allows systematic cost comparison of theconsequences of using particular completion fluids

Systematic fluid evaluation and costing incorporating:- Fluid cost- Operational costs - HSE costs - Incident-related costs

Shows costs for all operational departments including costconsequences for production

Best overall value (lowest cost) fluid option clearly identified


Documents

HPHT Performance Review 2008