Revista E&P - Septiembre 2011

8/10/2019 Revista E&P - Septiembre 2011

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T E M B E R 2 0 1 1

ultilaterals/ERD

Stimulation

Technology

Productionuality and Rate

Improvement

GeophysicalTechnology

Update

North SeaOpportunities

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E P M A G . C O M

T E M B E R 2 0 1 1

ultilaterals/ERD

StimulationTechnology

Productionuality and Rate

Improvement

GeophysicalTechnology

Update

North SeaOpportunities

Special Report:

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PRODUCTION QUALITY

AND RATE IMPROVEMENT

4-D reservoir characterization improves EOR

Efficiencies deliver value

Accurate well output measurement helpsmaximize performance

Openhole multistage frac systems offereconomic advantages

GEOPHYSICAL TECHNOLOGY UPDATE

Shell, HP collaboration leads to developmentof super sensor

Smart migrations algorithms speed processing

Quality control is challenging but achievable

MULTILATERALS/ERD

New system raises bar for multilateral junctions

Advanced casing exit technology improvesdrilling efficiency

STIMULATION TECHNOLOGY

Stimulating technology boostsunconventional production

Jetting technology improves production

REGIONAL REPORT: NORTH SEA

North Sea: Mature province gets its second wind

Mature fields spark innovative jackup design

SPECIAL REPORT: BRAZIL

Brazil deepwater presents challenges,opportunities

Brazil takes the lead in subsea processing

International investment takes a back seatto presalt

Brazil to become major technology hub

New operator joins the ranks in Brazil

Class evolves to meet changing needs

IndustryPULSE:Tax credits, incentiveshelp offset technologydevelopment costs

R&D is essential to the future of the industry, but oil andgas companies do not have to foot the bill alone.

EXPLORATION & PRODUCTIONW O R L D W I D E C O V E R A G E

SEPTEMBER 2011VOLUME 84 ISSUE 9

A HART ENERGY PUBLICATION www.EPmag.com

COVER STORY

32

Multiphysics couldbe a gamechangerThe understanding of newer meas-urements is becoming more routine,but integrating them into the bigpicture is still a challenge.

6

WorldVIEW: Take the unout of unconventionalBruce Vincent is pro resource plays but

questions the lexicon.10

Unconventional: Marcellus

Appalachias Marcellusis a proven giant

A recent study projects Marcellus gas production

could rise to more than 17 Bcf/d by 2020, making it

the single largest producing gas field in the US.

38

42

46

48

50

54

62

64

58

68

76

72

82

86

90

92

96

99

101

104


4/125

AS I SEE IT

The Arctic draws R&D efforts 5

MANAGEMENT REPORT

Logistics evolves from commodity to business-critical 14

DIGITAL OIL FIELD

Enterprise informatics power smarter, more streamlined science 18

IT aids in facility management 23

EXPLORATION TECHNOLOGY

Time to ditch the cables? 27

WELL CONSTRUCTION

Younger fleets take Brazil 29

PRODUCTION OPTIMIZATIONTaking a long-term view lessens the fear of change 31

TECH WATCH

Imaging tool improves debris removal operations 109

TECH TRENDS 115

INTERNATIONAL HIGHLIGHTS 118

ON THE MOVE/INDEX TO ADVERTISERS 123

LAST WORD

HFDM improves safety in the sky 124

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. Singlecopies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER: Send address changes to E&P, 1616 S Voss Road, Suite 1000,Houston, Texas 77057. Address all non-subscriber correspondence to E&P, 1616 S. Voss Road, Suite 1000, Houston, Texas 77057; Telephone:713-260-6442. All subscriber inquiries should be addressed to E&P, 1616 S Voss Road, Suite 1000, Houston, TX 77057; Telephone: 713-260-6442 Fax: 713-

840-1449; [email protected]. Copyright Hart Energy Publishing, LP, 2011. Hart Energy Publishing, LP reserves all rights to editorial matter in this maga-zine. No article may be reproduced or transmitted in whole or in parts by any means without written permission of the publisher, excepting that permission tophotocopy is granted to users registered with Copyright Clearance Center/0164-8322/91 $3/$2. Indexed by Applied Science, Technology Index and Engineering IndexInc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $25,000 for violations.

DEPARTMENTS AND COMMENTARY

ABOUT THE COVER A new brand of data integration, often referred to as

multiphysics, is paving the way for the next generation of geophysical interpreta-

tion. (Cover image courtesy of Paradigm; cover design by Laura J. Williams)

COMING NEXT MONTH The October issue of E&P brings you the latest advances in well

construction technology along with an in-depth regional report on activity in Atlantic Canada. The

exploration feature takes a look at whats new in electromagnetics, while the drilling feature presents

managed pressure and underbalanced drilling technologies at work in the field. Find out how compa-

nies are using subsea systems, optimizing mature assets, and improving exploration success along with

what is happening in the Eagle Ford shale, one of the most active US shale plays.

As always, while youre waiting for the next copy of E&P, remember to visit EPmag.comfor news, indus-

try updates, and unique industry analysis.

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ONLINE CONTENT SEPTEMBER 2011

PREMIUM CONTENT Subscribe @ EPmag.com/explorationhighlights

Russian oil field discovered in Sladkovsko-Morozovsky regionMoscow-based Rosneft has reportedly discovered a high-yield oil field

in the western part of the Sladkovsko-Morozovsky oil and gas region.The new field is in the Slavyansko-Temryuksky license area in

Krasnodar Krai in southwest Russia on the Black Sea.

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Reflecting on the past

By Rhonda Duey, Senior Editor

Dawson Geophysical celebrates the

90th anniversary of reflection seismology

by going back to where it all began.

Examining Texas hydraulicfracturing disclosure law

By Mike Madere, Senior Online Editor

Three energy lawyers share their insight

into legislation that will require operators

to reveal most chemicals used in fracing.

Sharing knowledge: Technologypartnerships vital to industry

By Nancy Agin, Associate Editor

Partnerships among oil and gas companies

remain mission-critical for the industrys

continued success as exploration and

development becomes riskier, costlier, and

more difficult in remote and environmentally

sensitive areas.

READTHELATESTEPmag.com

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The hubbub surrounding deepwater presalt activity offshore Brazil and the clamor

of the shale gale have all but drowned out reports of work that is going on inarctic technology development. Gaining access to the estimated 90 Bbbl of oil,1.7 Tcf of gas, and 44 Bbbl of natural gas liquids in the Arctic will require significant

advances in technology, which means a lot of money needs to go toward research.An organization headquartered in St. Johns, Newfoundland and Labrador, is

working to ensure R&D money is available for arctic technology development.Petroleum Research Atlantic Canada (PRAC) is a not-for-profit organization that

funds and facilitates collaborative petroleum-related R&D in Newfoundland andLabrador.

PRACs funding members are operators of offshore licenses and include Exxon-Mobil, Chevron, Husky Energy, Statoil, and Suncor Energy. Delegates from the New-

foundland and Labrador Department of Natural Resources, Nalcor Energy, and theAtlantic Canada Opportunities Agency (ACOA) also are members.

According to Dave Finn, PRAC COO, the organizations overarching goals are to

improve regional prospectivity and reduce E&P costs for the regional petroleum

industry.One objective, Finn said, is improving recovery in the Grand Banks.

Although the Jeanne dArc basin in the Grand Banks is not officially part of the

Arctic, the harsh conditions allow it to be considered part of this region, which ishome to Newfoundland and Labradors three producing offshore fields: Hibernia,Terra Nova, and White Rose. A fourth, ExxonMobils heavy-oil Hebron field, is tocome onstream in 2017 if the current development plan is carried out.

The Province has been able to maintain offshore activity with these sequentialprojects, Finn said, but for Newfoundland and Labrador to remain an area of inter-est and achieve sustainability as a player in the oil and gas industry, it has to have

more than a few producing fields. He believes technology will be a big part of theanswer to sustained interest in the region, and much of that technology will deal

with the Arctic.Arctic technology is a common need for companies operating in Atlantic Canada,

he said, and PRAC will help fund technologies that advance arctic operations,enhance oil recovery in harsh-environment fields, and improve HSE.

A recent requirement in Newfoundland and Labrador is for operators to invest inlocal R&D that will allow the region to compete on an international level with estab-

lished research organizations. PRAC will help to allo-cate these funds (which Finn said could amount tomillions of dollars over the next 15 years) to local

companies that qualify for grants.The Arctic presents huge challenges, Finn said.

We would love for Newfoundland and Labrador to

play a continued role in its development.

As ISEE IT

EPmag.com | September 2011

1616 S. VOSS ROAD, STE 1000HOUSTON, TEXAS 77057

TEL: +1 713.260.6400FAX: +1 713.840.0923

www.EPmag.com

The Arctic draws R&D efforts

5

Read more commentary at

EPmag.com

JUDY MURRAY

Editor

[email protected]

Editor JUDY [email protected]

Senior Editor RHONDA [email protected]

Senior Editor TAYVIS [email protected]

International Editor MARK THOMAS

[email protected]

Associate Editor NANCY [email protected]

Corporate

Art Director ALEXA [email protected]

Senior GraphicDesigner LAURA J. WILLIAMS

[email protected]

Production Director& Reprint Sales JO LYNNE POOL

[email protected]

Senior Editor/ManagerSpecial Projects JO ANN DAVY

[email protected]

Executive EditorOnline RICHARD [email protected]

Director ofBusiness Development ERIC ROTH

[email protected]

Group Publisher RUSSELL [email protected]

Vice President, Digital Media

RONS DIXON

Senior Vice President, Consulting Group

E. KRISTINE KLAVERS

Executive Vice President and CFO

KEVIN F. HIGGINS

Executive Vice President

FREDERICK L. POTTER

President and Chief Executive Officer

RICHARD A. EICHLER

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Due to exponentially increasing energy demands andever-changing regulations, the oil and gas industry

is scrambling to develop solutions to many complex

issues. Companies around the US are undertaking high-

cost projects to improve upstream production technolo-gies, optimize process systems, and develop customized

engineering design solutions and construction tech-niques. These companies recognize the necessity ofR&D efforts, but many are unaware that the costsincurred during their day-to-day projects are eligible for

R&D tax incentives.

Tax supportThe R&D tax credit is a business tax incentive for com-panies that provide unique solutions to present-day mar-ket needs. The traditional notion of R&D brings patents

and lab coats to mind, but for tax credit and incentive

purposes, R&D is defined much more expansively.The R&D credit provides a direct reduction of tax lia-

bility for labor, supply, and contractor costs incurred onprojects that are technological in nature. It is in place toincentivize the development of specialized solutions toengineering and construction projects. The intent of

the credit is to reward the expansion of domestic devel-

opment activities.To qualify for the R&D credit, projects must meet a

few generally defined criteria. For example, projectsmust be undertaken to develop a new or improveddesign solution such as a custom product, engineeringdesign, or construction technique. In addition to quali-

fied research, qualified activities include direct supervi-sion and support.

Projects undertaken by the oil and gas industry typically

are quite challenging and unique. This increases the like-lihood that the activities conducted will qualify for thecredit. Companies all over the nation are constantly

expanding their capabilities by taking on projects toimprove efficiency while comply-ing with ever changing regula-tions and site-specific constraints.

It should be noted, however,that expenses for prospecting ordetermining the location of oiland gas deposits do not qualify.

Putting tax credit to workRecognizing that a company

could qualify for a credit is the

first step. For companies unsureabout whether they merit thecredit, it would be helpful to

consider some situations wherecredits have been granted.

Consider this example of a

company applying for an R&Dcredit for tax year 2012 a multi-discipline engineering EPC firmwith US $35 million of yearly

gross revenue and $23 million inW-2 wages. The company designs

September 2011 | EPmag.com6

industryPULSE

Tax credits, incentives help offsettechnology development costsR&D is essential to the future of the industry, but oil and gas companies do not have to foot

the bill alone.

Dean Zerbe and Matthew Carter, Alliantgroup

Many technologies developed for specific

deepwater applications could qualify for

R&D tax incentives.


9/125

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process piping and structuralsystems for upstream and down-stream facilities, employing a

team of project managers, proj-ect engineers, design engineers,and CAD drafters that partici-pate in design and develop-

ment processes. An in-depthstudy found that the companyspent approximately 20% of

its labor costs on qualified

research activities. The near$5 million in qualifying laborcost resulted in a net tax benefit

of $280,000.Another company in the

same industry, with annual rev-

enue of $25 million, designsand manufactures customizedcontrol units for blowout pre-venters (BOPs). The company

develops each BOP unit forcustomer-specific applications

to fit within unique site constraints and to interface withexisting systems throughout drilling platforms. Thecompany employs mechanical and electrical engineers,

programming logic control programmers, and a team ofspecialty assemblers and welders. Each system design isunique and designed for the companys clients applica-tions. In this example, approximately 35% of the com-

panys annual $3.5 million in wages from 2007 to 2010went toward these activities as well as all supply costsassociated with each unique unit. The resulting tax

credits total $500,000 over the four-year period.

Getting a piece of the pieAs oil and gas consumption and corresponding produc-

tion continue to increase, more companies will undertake

R&D efforts to develop new technologies, engineeringdesigns, and unique construction means and methods.

The effort put forth into this research is crucial to ensurethe continued growth of the American oil and gas pro-duction industry.

The R&D tax credit exists to ensure this growth con-

tinues and that these activities occur in the US ratherthan abroad. Activities occurring every day in the oiland gas industry qualify for significant tax benefits. The

federal government and many states offer tax incentives,and many more companies qualify for these incentivesthan are taking advantage of them.


industryPULSE

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Offshore structure design with respect to generator

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Development and testing of plug and abandonment

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Development and testing of turnaround and shut-

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Plant design with respect to pressurization, safety,

chemical segregation, and environmental and pollu-

tion control systems;

Waste water treatment solutions;

Refining issues;

Drill design and improvement;

Containment systems;

Fuel combustion testing; and

Performing environmental testing and remediation.

Among the innovations eligible for R&D tax

incentives are offshore structure designs

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Take the un out of unconventional

Bruce Vincent is pro resource plays but questions the lexicon.

To an industry insider, unconventional refers to the

fact that these oil and gas reservoirs are traditionally

considered to be source rock, not reservoir rock.

But to the layman, unconventional might imply that

these reservoirs are risky business. Bruce Vincent, presi-

dent of Swift Energy Co. and chairman of the Independ-

ent Petroleum Association of America (IPAA), believesthis second interpretation is dangerous to the industry.

We have a marketing problem industry-wide on both

the policy side and the demand side to convince the end

user and policymakers that these plays are real, Vincent

said. The use of the word unconventional implies that

the hydrocarbons are challenging to get. Theyre not.

Exploiting these fields is getting easier because the

industry is getting better at what we do.

The sooner we all stop calling it unconventional, the

better.

Despite his unconventional view on unconventionals,

Vincent is a firm proponent of natural gas production inthe US. He readily agrees that the gas market has been

saturated, and he hopes convincing the public shale gas is

here to stay will result in a demand uptick in the form of

natural gas vehicles, power generation, LNG exports, etc.

After all, industry naysayers have all but vanished.

Now the industry has to work the same magic on the

consumers.

We had CEOs of prominent companies five years ago

who werent involved in the shale plays and didnt think

they were working, he said. Everybodys got a shale

play now. We need to develop that same level of confi-

dence in the end users.That will require change in the way the industry views

these end users, he explained. Typically, the oil and gas

business produces and sells a commodity, not a specific

product. We dont care who we sell our oil or gas to,

he said. Well sell it to whoever pays the highest price.

As a consequence, we dont have the mentality in our

industry to focus on the customer.

We dont have customer orientation, but maybe we

need to have stakeholder orientation.

Bullish on resource plays

Vincent does not let his dissatisfaction with the u wordkeep Swift from being a major participant in some of

North Americas hottest plays. Its long-term position in

South Texas helped it expand rapidly into the Eagle

Ford shale play, he said.

Traditionally drilling the Olmos, a tight sand 450 m

(1,500 ft) above the Eagle Ford, Swift engineers in the

1990s toyed with the idea of drilling a horizontal well to

expose more reservoir. At the time we couldnt figure

out how to stimulate it, he said. As we watched other

companies developing the multistage frac technology,

we decided to try it on Olmos. We drilled an Olmos mul-

tistage frac before we drilled an Eagle Ford well, and itworked quite handily.

Currently, the company is actively drilling horizontals

in both formations.

Its Eagle Ford efforts are successful, but Vincent said

Swift suffers from the same logistical challenges as any

other company, primarily in terms of availability of equip-

Swift Energy CEO and IPAA chairman Bruce Vincent: Every-

bodys got a shale play now. We need to develop that same

level of confidence in the end users. (Images courtesy of Swift

Energy Co.)

Rhonda Duey, Senior Editor


worldVIEW


13/125

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worldVIEW

ment and people. Its like building a Model T, he said.Youve got steps along the way, and each one of thesesteps has component parts. Each of these parts has to be

ready at the same time. At some point if you dont havefront doors or tires or paint, it shuts the whole line down.

This has caused the company to engage in planning ina time frame that would be unthinkable for a typical

exploration company. Companies with resource playshave this incredible line-of-sight inventory, he said. Itsmore predictable, reliable, and dependable than any-

thing weve ever had before. You can plan your businessthree to five years out so much better.

We need to take advantage of that, but its a chal-lenge because many of us arent used to doing that.

Were used to planning as far ahead as the next explo-

ration well.

Politics as usual?Vincents two-year stint as chairman of the IPAA ends inNovember, and he said it has been an interesting ride.

From the time Obama was elected, its been the most

difficult administration this industry has seen, certainlyin my career, he said. I think its the most anti-businessadministration Ive ever seen, and certainly the most

anti-oil and gas.He finds this attitude bewildering because of the many

benefits the oil and gas industry brings to the country.

IPAA commissioned a study of onshore independentsand discovered that the entire direct, indirect, andinduced ecosystem of the independents generated US$131 billion of federal and state taxes in 2010, a figure

that will increase to $189 billion by 2020.Why the administration is so opposed to the industry

is hard to fathom, especially when you consider howmuch money the industry contributes to government

coffers, he said.With the lack of a cohesive industry advertising mes-

sage, organizations like IPAA and the American

Petroleum Institute do their best to convey positive

messages about the industry. Vincent identified EnergyIn Depth (www.energyindepth.org) as one source for accu-rate information.

I liken it to a campaign-style war room, Vincent said.Every day it tells whats being printed about the indus-try. Its not just a clipping service. Its taking that infor-mation and righting the wrongs. Its educating people

about the facts. Ultimately we will win with the facts. Butits a huge educational undertaking.

IPAA is going a step further by educating the writers

and reporters who are generating this news. It also ishelping its member companies educate communities.The good part about the bad policy coming out of is

that it has mobilized and energized people in this indus-try who havent been involved in policy before in their

careers, he said. Thats good because we need helpfrom everybody.

He added that service companies have been particu-larly good at attending town hall meetings and educat-ing local communities about their services.

Hopefully this education process will steer more peo-ple to a profession in the energy industry. Weve gonethrough cycles with people, but its never been as con-strained as it is today, he said. Weve got these people

in their 20s and early 30s, and then weve got people intheir late 40s, 50s, and 60s. One of the real concerns isthat some of the people in their 50s have done well, so

many of them decide to go to the ranch. Theindustry will feel their loss.

We need to entice these people to stay around.We need to figure out new ways to keep them

involved and to continue to engage their expert-ise and experience.

Vincent added that, for younger people, there

has never been a better time to enter the indus-try. The fights were having over policy and thenegativity wont be there forever, he said. We

need to push for policies that advocate the

development of Americas energy

resources. But we need people in thisbusiness to make it happen.Crews perform a frac job on one of Swifts

South Texas properties.


15/125

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In the past, many oil and gas companies looked atlogistics and supply chain management as a necessary

evil. This perception is changing dramatically due to an

evolution in services designed to offer strategic business

value and significant impact on the bottom line.Freight forwarding has moved from being a mere

commodity for the oil and gas industry to being viewedas an essential process that is becoming increasinglycomplex through innovative technologies, stringentoversight, and multifaceted international agreements.

Interruptions in the supply chain can lead to misseddeadlines on mission-critical milestones in a drilling orproduction process. In the end, the impact on E&P

operations can be very costly.

A new approach

Ten years ago, a vast majority of logistics discussionsrevolved around price. The perception that logistics wasa freight forwarding commodity with little to no strate-gic value led to price shopping for the lowest bid. These

days, logistics conversations are beginning to focus onbusiness-critical issues such as cycle times, transit timesto rigs, inventory management, contract logistics, andvendor management.

Because of the complexity of running an end-to-endlogistics operation in a global market, the industry isshifting to a situation where within three or four years

everything that has to do with oil and gas logistics will be

completely outsourced.Several factors are causing this shift. First, oil and gas

companies are realizing that cycle times and inventory

drive tremendous costs. Since many drilling contractorsbudget an average of US $500,000 per rig for freightand logistics cost, tightening up supply chains, moving

equipment faster, and focusing on inventory control canhave a significant impact on the bottom line.

The oil and gas business does not take a holidaybreak. Operations continue around the globe 24 hours

per day, 365 days per year, and there are many instanceswhere emergencies occur and charters are required and

parts are received, checked, packed to specification, andon the plane within two to three hours in order to meetthe requirements of the customer.

Because of the recent focus on shoring up logistics,energy executives are taking a page from the playbookof cost-conscious retail leaders such as Dell and Walmart

that have some of the most innovative and meticulous

inventory and supply chain operations in the world. Notsurprisingly, energy companies are starting to tap into

all sectors including automotive, retail, and technology for logistics personnel who may not know the industrybut understand how to apply best-in-class methodologyto streamline supply chains and save significant costs.

Drilling contractors, service companies, and oil com-panies are all going after experienced logistics talentfrom the retail sector. While logistics departments in the

oil and gas industry used to be relegated to a subsectorof procurement in the purchasing group, the function isnow being elevated to a much higher and more strategic

Logistics evolves fromcommodity to business-criticalEfficiently transporting parts and equipment from one location to another often in difficult

surroundings is an important component of the overall drilling process.

Bruce Hulings, CEVA


managementREPORT

Freight forwarding used to be viewed simply as a commodity.


17/125EPmag.com | September 2011 15

managementREPORT

level. These personnel are increasingly looking to out-

sourcers to drive further logistics efficiencies. A combi-

nation of logistics experts and seasoned energy industryveterans can create a powerful and strategic outsourced

solution.

Another factor in the shift toward more attention to

logistics and outsourcers is the increased complexity of

managing a global oil and gas logistics operation in the

21st century. Without deep country-by-country experi-

ence, navigating a dizzying array of trade regulations

can cause costly delays on equipment and parts ship-

ments. Some oil and gas locations are extremely active,

and customs procedures continue to be a challenge.

Also, compliance with intricate guidelines requires vast

experience and dedicated resources around the worldto avoid major environmental, safety, and legal snafus.

Add this to trying to manage an increasingly disparate

global supplier network, and it is easy to see why oil and

gas companies are looking for outsourced alternatives.

Looking outside for helpOne CEVA customer builds christmas trees. This com-

panys biggest problem is managing the suppliers ofvalves, spools, fittings, and pipes. Instead of hiring addi-

tional staff dedicated to nothing more than managing

vendor relationships and contracts, the company turned

the entire supplier management process over to CEVA.

These kinds of solutions are being implemented

much more frequently in the industry where before they

would never been the considered.

In a complex environment, logistics companies that

can provide an intimate knowledge of energy sector

issues and a wide array of contract, compliance, trans-

port and inventory services are the ones who will not

only succeed but become strategic energy partners. Thisshift toward outsourced logistics operations is ultimately

in the best interests of oil and gas companies by allowing

them to focus on their core areas of expertise while opti-

mizing the efficiency of their supply chains.

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Oil and gas companies and their suppliers are under

mounting pressure to innovate, keep costs down,

and improve the speed, safety, and agility

of their exploration and oilfield R&D efforts. But the

increasing sophistication of and demands on explo-

ration and drilling techniques presents both benefits

and new challenges. Technologies for reservoir simula-

tion and management; 3-D seismic imaging; and

advanced process, production, and completion analytics

are enabling companies to explore leads that might not

have been possible to drill or even evaluate in the past.

At the same time, these tools (as well as other informa-

tion streams related to legal issues or leases) are

unleashing a tsunami of data that organizations are

struggling to integrate, make sense of, and manage.The crux of the problem is that

many organizations continue to rely

on previous-generation informatics

technologies to handle the complexity

and volume of todays generation of

R&D data. Attempts to share data or

deploy unified processes across the

entire E&P operation result in a

patchwork quilt that can quickly

become an integration and mainte-

nance nightmare. Improving E&P

efficiency and profitability demandsthat oil and gas companies find a bet-

ter way.

Islands of informationAnswering this question of whether to

drill requires a vast amount of data

everything from 3-D seismic images to

reservoir simulations, well designs,

charts, graphs, and detailed analytics

and reports. In addition, numerous

stakeholders need to weigh in, includ-

ing geologists, geophysicists, chemists,materials scientists, engineers, and

executives. Yet all too often, the data

required for efficient and effective

E&P decision-making is marooned on

islands of information. Critical sam-

ples are hidden away in a file drawer

September 2011 | EPmag.com

digitalOIL FIELD

Enterprise informatics powersmarter, more streamlined scienceExploration and production efficiency is all about the data.

Michael Doyle, Accelrys

Companies are struggling to integrate, make

sense of, and manage an enormous volume

of data.

18


20/125

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in the geology department. Chemical analysis reports

are saved on a proprietary system that only the chemists

can access. Offshore engineering expertise is tied up in

a project four time zones away.Typically, geoscientists and development practitioners

have turned to manual approaches to bring together

disparate data sources spending hours searching

through files, reformatting data, and cutting and pasting

reports together, or enlisting IT resources to hand code

customized, point-to-point connections to move infor-

mation between various systems and applications (build-

ing the patchwork quilt). But these ad hocand poorly

structured attempts at information management are

time consuming, error-prone, and expensive, especially

as organizations seek to shrink their time-to-oil cycles. A

simple and automated solution is needed for capturing,managing, processing, and sharing R&D data so infor-

mation critical to E&P can be leveraged quickly and

profitably. This requires an end-to-end, enterprise-level

approach to scientific informatics.

Bringing the bigger picture to E&PAccelrys Enterprise Lab Management Suite was created

to help chemical R&D organizations move beyond infor-

matics solutions that trap information in silos, create bar-riers to collaboration, and add unnecessary effort and

expense to innovation. Designed to transform a collec-

tion of point solutions into an integrated information

environment, components of the suite are built on Accel-

rys Pipeline Pilot platform, a services-based open archi-

tecture that supports the plug-and-play integration of

diverse data sources and processes, and has the ability to

capture and manipulate complex scientific information.

For E&P companies, this means individual stakehold-

ers can more easily access, analyze, report, and share

data across departments and disciplines and that IT

resources can be freed from the burden of manuallysupporting the varied requirements of multiple informa-

tion consumers. Most important, it allows a more inte-

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digitalOIL FIELD

An Enterprise solution

A large global oil and gas company deployed the Accelrys Enterprise

Knowledge Base (EKB), a professional services solution built on the Enter-

prise Lab Management suite, after facing challenges managing its inven-tory of samples from field assets.

In one particularly vexing case, the company lost or could not find a

series of samples. A big part of the problem was that, like many other com-

panies in the oil and gas space, this organization still had pockets of infor-

mation management procedures mired in the Dark Ages, while deploying

state-of-the-art technology in others.

Test drill samples were all handled manually with thin sections glued

to a piece of card stock, stored in filing cabinets, and mailed halfway

around the world when someone needed to use one. Not wanting to

repeat the costly data handling error that resulted in the lost samples,

the company sought a more systematic way to capture valuable research,

integrate data with other sources of information for integrated analysisand testing, and share data with global E&P project participants without

putting the data at risk of loss.

With the Accelrys solution in place, the company captures sophisticated

image data in digital form and makes it immediately available to the entire

research enterprise for viewing and analysis. Once in the enterprise sys-

tem, this data also can be searched easily, automatically integrated with

other information for analysis, used to create detailed reports and visual-

izations, and dropped into automated process workflows that help the

company streamline and speed its research efforts. Specific benefits have

included:

The ability to quickly locate field samples that are needed in a matter

of minutes rather than days or weeks; The ability to track samples, including who is using them and who has

requested them; and

The avoidance of expensive re-work and lost time that would have

resulted from missing or inadequate data.

The problem has been that the different stakeholders have come to the

table with different perspectives, different tools and systems, different

information hierarchies, and even different ontologies. The Accelrys solu-

tion respects these differences by allowing the generation of domain and

concept-specific meta data while making it all accessible, searchable, and

actionable as a cohesive whole.

Better, faster, more innovativeWhen it comes to scientific informatics, a flexible, services-based enter-

prise approach makes it possible for companies to use data generated

by sophisticated imaging and modeling technologies, legacy systems,

domain-specific databases and more, while overcoming the integration

challenges these myriad systems present. This enables time-consuming

and error-prone manual tasks like image retrieval, formatting, processing,

and reporting to be automated, which frees IT resources and speeds

research efforts. Project participants can share information and work

together more effectively. And from a competitive standpoint, E&P

companies can drive faster, better and more innovative research

discoveries.

21EPmag.com | September 2011

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24/125EPmag.com | September 2011 23

The complex and increasingly regulated operation of

todays oil and gas assets represents a management

challenge unequaled in industrial history. This has arisen

from an aggregation of factors that are challenging indi-

vidually; the combination can be overwhelming. Chal-

lenges include increasingly complex engineering to

recover hard-to-reach reserves; increasing complexity tomeet ever-growing demand; and increasingly stringent

regulatory, environmental, and safety restrictions. There

is a bewildering variety of asset information in different,

incompatible forms, which is made even more complex

by the aging of physical assets and the challenge of an

aging workforce.

An overarching strategy to address these complex and

often conflicting demands is essential. Solutions are

known under several different names, of which opera-

tions integrity management (OIM) strategy is perhaps

the most widely used and accepted.

Handover and operational readinessTypically, by the time handover to the owner-operator

(OO) occurs, the contractor/EPC has amassed a huge

quantity of information associated with the asset. This

information is essential to demonstrate that the asset is

fit-for-purpose, meets the design criteria, is in confor-

mance with the regulatory requirements, and can be

started and operated safely. This data comes in many

different forms from multiple and often divergent and

potentially conflicting sources, all with different levels

of quality and completeness.

Today it is customary for data to be handed over in avariety of formats. It is typically impossible to verify the

datas completeness, accuracy, and adherence to stan-

dards or compliance with regulatory requirements.

Operational readiness enables OOs to address their

operations and operational integrity challenges, in other

words, a comprehensive asset information capability and

a dashboard that enables OOs to effectively, manage,

and exploit their database. From these follows a third

requirement that leads directly into operations: effective

change management.

Effective change management can only be achieved by

means of a single central resource that stores and man-

ages all information, regardless of originating application

or data source. This central resource, or digital informa-

tion hub, is the key to an effective OIM strategy.

Operations and maintenanceEffective asset maintenance delivers maximum sustained

throughput for minimum sustained cost. At its best, it

combines a preventive strategy to maximize perform-

ance and reliability with effective reactive processes to

handle the inevitable unexpected problems that occur

in every facility. Correctly implemented, asset manage-

ment policies can deliver significant measurable returns

such as reduced downtime, reduced cost, increased

safety, and extended service life.

Like all critical operational processes, maintenancerequires as built information the real, up-to-date state

of the asset. Relying on original as designed information

in a 40-year old facility is simply inviting trouble.

Recent technology developments have made brown-

field asset capture effective and affordable through the

use of high-precision 3-D laser surveying, which accu-

rately captures as-built status, and software that can cost-

effectively add intelligent asset info to the survey data.

Research and experience demonstrate the integration

of maintenance management, resource planning, and

materials management. Applied on a platform of inte-

digitalOIL FIELD

IT aids in facility managementAn effective operations integrity management strategy can deliver operational efficiencies

and ensure safe and compliant operations.

Paul Halpin, AVEVA Inc.

Laser Modeller/Brownfield asset capture is effective and afford-

able through the use of high-precision 3-D laser surveying, which

accurately captures as-built status, adding intelligent asset infor-

mation to the survey data. (Images courtesy of AVEVA Inc.)


25/125

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grated, validated, and accessible information, these provide a powerful and

essential environment for maintenance regimes and plans, work order

scheduling, resource allocation, materials tracking, and spares and inspec-tion management. The benefits are not only economic in terms of reducing

operating costs but can lead to life extension (deferred replacement costs),

reduced operating risks (lowered insurance premiums and avoided uninsur-

able losses), and reduced costs of regulatory compliance, providing a path

to easier and more complete audit reporting.

Asset engineeringExecuting major asset-change projects while maintaining throughput and

operational safety presents a major challenge to operations and engineering

teams. The difficulty is rooted in the need to have ready access to complete

and accurate asset information down to the lowest level of detail coupled

with the ability to view this information in ways that relate to the differentand often conflicting requirements of the project.

Today the industry is accustomed to using spreadsheet functions such as

charts and pivot tables to draw meaningful inferences from confusing arrays

of raw data. Facility engineers need similar capabilities to make sense of the

vastly more extensive and complex digital assets they deal with on a daily

basis. It is necessary for different disciplines to view the information in dif-

ferent ways for purposes such as project justification, scope definition, price

estimates, calculations, planning, procurement, logistics, project supervi-

sion, and documentation. It is essential that this information is easy to share

and communicate across the enterprise and between the various opera-

tional handover events.

Failure to achieve effective use of asset information regularly leads to costoverruns and avoidable downtime; in extreme cases, it can lead to avoidable

accidents. The predominant root cause of incidents is inadequate informa-

tion. Whether the driver is safety or efficiency, the industry simply cannot

afford to neglect its information assets.

HSE and regulatory complianceMost operations processes and activities are potentially hazardous, which is

why the industry has extensive controls, working practices, and regulations to

minimize risk and to protect the safety, security, and health of employees and

the public. While such risk-reducers evolve continuously as industry, technol-

ogy, and regulations advance, it is always true that doing it right embraces

doing it safely. This, as well as the associated economics, makes OIM a num-ber one priority for OOs. Demonstrating this integrity in the form of key per-

formance indicators and audit reporting is essential to ensure that the

required level of compliance is maintained.

Just as operations and maintenance procedures need integrated information,

so too do the activities of risk assessments, monitoring, auditing, checking, and

applying for certification. Only when the tradi-

tional silos of information can be effectively inte-

grated can they provide support for safe working

practices, enable generation of comprehensive

regulatory compliance reports, and enable a

holistic and corporate-wide approach to HSE.


digitalOIL FIELD

EPmag.comREAD MORE ONLINE

There is more

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We have through our history

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28/125

If a solution to a problem causes its own problems,

it is not really a solution.

That is the philosophy powering a company called

Wireless Seismic. Roy Kligfield, CEO, thinks of his

company not as a me too entrant into the nodal

land seismic industry but as an alternative to the

companies that use cabled systems, still about 95%

of the market.

The argument against cabled systems is easy

enough laying out cables is time-consuming, createspermitting headaches, and requires constant attention

since animals tend to chew on the cables. With the

industrys appetite for large channel count surveys,

cabled systems can also be a logistical nightmare,

requiring larger crews, more trucks, and a huge envi-

ronmental footprint.

Unfortunately, some of the cableless systems on the

market introduce their own sets of problems. Kligfield

said current cableless systems move the problem from

cable management to post-recording data handling and

management or transcription. Methods vary from short-

range radio collection by individuals, literally walking

the line, to weeks later having to transcribe the data.

Also, clients like the fact that cabled systems providereal-time data and real-time quality control. People

want to see the data, not just for data loss issues but for

monitoring things like noise as the wind picks up, he

said. Our thought is, why compromise if you can pro-

vide all of the benefits of cabled systems but get rid of

the cables?

The answer is the RT 1000 Wireless System. In

this system, independent units are connected to geo-

phones and laid out in a pattern. The units communi-

cate to each other through radio frequencies in a

bucket brigade fashion one unit sends its data to

the next, which adds its own data and sends the wholepackage along using a proprietary network. Ultimately

the data are collected to a backhaul, a structured radio

link. The backhaul telemeters commands, seismic

data, and unit status between the central recording

truck and the wireless remote units.

Part of the beauty of the system is in the software

that has been designed specifically for it. An operator

can view all of the wireless units on a screen, either

in map view or in a table, and investigate each unit

to be sure it has not been tipped over or is running

out of battery power. Any units that require attention

can be handled quickly by a crew member. Once theunits are all up and running, the system can be armed

and ready to shoot from the central recording truck.

Normal run-time between recharges is 15 days.

Overall, the system has been designed not only to

compete with cabled systems but to make the contrac-

tors job a little easier. Were making the system not

just usable but user-friendly,

he said. Thats critical for

a product being introduced

to market.

Time to ditch the cables?A new wireless system offers the same benefits as cabled systems without

the logistical headaches.


EPmag.com

RHONDA DUEYSenior Editor

[email protected]

27

explorationTECHNOLOGY


The RT 1000 wireless unit is easy to deploy. (Image courtesy of

Wireless Seismic)


29/125

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wellCONSTRUCTION

Brazils economy is dynamic and growing. Over the

next five years, the country plans to increase its

number of operating offshore units 20% per year. With

50 offshore rigs currently operating in the region, the

expected number will grow to 100 rigs working off-

shore Brazil by 2016.

Brazils government recently requested the construc-

tion of 28 new offshore drilling units to be built in

country by Brazilian contractors, known as the Build inBrazil Initiative. The government awarded contracts for

the first seven rigs to Brazil-based Sete, a company asso-

ciated with Petrobras. The 21-rig tender is out now, and

proposals are to be submitted early September.

The new rigs will be divided among a number of play-

ers. Petrobras is the obvious frontrunner for new activity

as Brazils national oil company, but Brazil has proven

very receptive to allowing other oil companies into its

waters. Brazil-based OGX is currently working offshore,

and a number of multinational companies have been

invited to participate, including Shell, BP, ExxonMobil,

BG, Anadarko, and Amerada Hess.Ensco, one of the leading contractors in Brazil, has

plans for additional expansion. In February of this year,

Ensco purchased Pride International, essentially leap-

frogging to the number two spot on the list of the

worlds largest contractors. Ensco has a well-estab-

lished track record with rigs spanning from Mexico to

Australia, and the Pride acquisition further extends

Enscos global reach.

One of our strategic goals at Ensco was to enter

the Brazil market, one of the largest and fastest-

growing deepwater basins, said

Mark Burns, Ensco senior vicepresident, Western Hemisphere.

We also wanted to expand our

fleet to include drillships. The

acquisition of Pride fulfills both of

these objectives while also giving

us access to another major

deepwater market

West Africa.

The companys expanded fleet

now includes seven ultra-deepwater

drillships, 13 dynamically positioned semisubmersibles,

seven moored semisubmersibles, and 48 premium jack-

ups, and more rigs are being added. We currently have

several technologically advanced drillships, semisub-

mersibles, and ultra-premium harsh-environment jack-

ups under construction as part of our strategy to

continually high-grade our fleet, Burns said.

One advantage Ensco has in its recent move into

Brazil is the average age of its fleet. We have the

youngest ultra-deepwater fleet in the industry among

the major offshore drillers, Burns said.

In addition to the legacy Pride drillships, includingtwo under construction, Ensco has an expanding semi-

submersible fleet. Five ENSCO 8500 Series semisub-

mersibles have been delivered, and two more will be

completed next year. The average age of our ultra-

deepwater fleet is two years, Burns said. And with

our newbuild program, we will continue to have the

newest ultra-deepwater fleet for some time.

Newer fleets equal newer, more efficient technol-

ogy. As the company ushers in newbuilds, it plans to

eventually phase out some of the older rigs in its

fleet. Although these older rigs can do a lot of the

same things a new rig can do, from a customer satis-faction standpoint, the newer generation equip-

ment seems to be what the industry wants, Burns

said. Right now, we feel as an

industry that fundamentals are

strong and theres market

demand to

absorb the

new rigs

being

built.

Younger fleets take Brazil

As Brazils offshore activity heats up, contractors will have to be spryto keep pace.


EPmag.com

TAYVIS DUNNAHOESenior Editor

[email protected]

EPmag.com | September 2011 29


31/125

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The challenge of extending the producing life of

installations is a never-ending task. Implementing

new or improved technologies and practices in

regions like the North Sea have allowed assets to

far exceed their original design lives.

Although it is a straightforward philosophy, putting

into practice the theory of extending an installations

life is not always easy. Despite a simple business case extend the producing life of an installation, increase

reserves recovery, and boost its profitability the

reluctance of companies to put new technologies

into service makes it difficult to take advantage of

potential solutions.

In conversation recently with several

senior upstream executives spearheading

the drive to implement intelligent

energy and smart solutions, there was a

recurring theme resistance to change.

It is human nature to be cautious of

change, especially when a current systemor practice appears to work perfectly

well. The oil industry is also inherently

conservative. In the words of one senior

operating company manager, the indus-

try still has a way to go on our existing

assets when it comes to introducing or

retrofitting advances in technology to

improve the efficiency of older facilities.

The problem is that although potentially

helpful new technologies exist, it is not always

easy to apply intelligent energy solutions to

an existing brownfield mature projectand benefits are not guaranteed.

Obviously, when infrastructure

was first put in place, it was not

designed for such technologies,

and sometimes does not easily lend

itself to modification. There are

many considerations, such as data

broadband solutions and complex con-

nectedness among all of the various valves and

pipelines and all the parts of the infrastructure.

Another senior oil company executive pointed out

that retrofitting of collaborative work environments,

which is relatively easy, has helped many of his com-

panys oldest assets to become more efficient, ulti-

mately leading to better production. But

a major stumbling block remai

Documents

Revista E&P - Septiembre 2011