Developing Petroleum Engineering - Case Study Example

Petroleum Engineering: Case Analysis Name: Lecturer: Course: Date: Executive Summary The oil production at Albatross Field oil production comes from mature fields. Hence, increasing oil recovery from the mature field is a fundamental concern for the Big Oil and Gas Ltd and Vulture Exploration and Production Ltd. De-pressurization technique can be used to increase and sustain oil and gas production rates at Albatross Field once the water injection is halted and the reservoir generates oil by depletion. The technique entails decreasing the pressure in the field to facilitate the breakout of solution gas, which increases recovery of gas from the production wells. To reduce Capex and Opex over the plan period, enhanced oil recovery (EOR) should be used. It is relevant for the case of Albatross Field, since it can reduce Capex and Opex over the plan period. The elemental principle of the technique is that by injecting chemical, steam or gas and into the reservoir, the recovery rates increase since they clear bypassed oil and residual from the well. To leverage the existing assets, satellite fields should be developed. Herring Field can be developed as a satellite field, since it is made of Middle Jurassic Sandstone reservoir, which is at close proximity to a salt diaper. Pressure maintenance is suggested to develop Herring Field. There are several available technologies with the potential to reduce cost, leverage available assets and to extend the life of the mature well. The Multi-lateral wells can reduce construction costs through augmented use of the oil wells on the top-hole sections. Intelligent completion technology can also significantly lead to reduction of Opex and Capex. In addition to reducing the cost of well construction, it can extend the life of the mature well. While it is suitable for boosting production of oil at Albatross, its major shortcoming is that it is costly. The Slimhole design can reduce Capex and Opex cost, leverage available assets and to extend the life of the mature well. EOR technologies such as BrighWater are also capable of reducing operational costs and to extend the life of the mature well. Overall, EOR’s BrightWater system should be used in treating the Albatross Field. In addition, there is a need to undertake seismic re-evaluation of the field to discover the bypassed oil reserves. Based on the results determined, slimhole completion technology and CTD can be applied to the wells that perform worst. Lastly, the Herring 1 prospect needs to be developed using multilateral drilling. Table of Contents Executive Summary 2 Table of Contents 4 Introduction 5 The potential of using the new technologies 5 Increasing production over current plan levels 6 Permeability homogenization and de-pressurization 6 Reducing Capex and Opex over the plan period 7 Enhanced oil recovery (EOR) methods 7 Leveraging existing assets 8 Integrated field development 8 Available technologies and their potential to achieve the objectives 9 Improved Oil Recovery (IOR) and Enhanced Oil Recovery (EOR) 9 a) Thermal methods 10 b) Chemical methods 10 Intelligent completion (IC) technology 11 Reentry drilling 12 Multi-lateral wells 13 Risk matrix 13 Estimate of the expected gains 14 Summary of Implementation Issues 15 Conclusion 15 Reference List 16 Introduction Operated by Big Oil and Gas (BOG) and Vulture Exploration and Production, Albatross Field is situated in the Central Graben region of the North Sea, about150 miles offshore Aberdeen, Scotland. The field has four platforms, dubbed Albatross A, B, C and D. However, the field is mature and is in the last part of its commercial life. The oil production field is on the verge of natural decreased production levels because of maturation coupled with the ageing of production facilities. Among the biggest challenges facing Big Oil and Gas (BOG) and Vulture Exploration and Production Ltd is developing and implementing new technologies to facilitate recovery from the mature fields and extension of the life of the ageing fields. The two firms seek more effective technologies for managing the available assets and boosting performance, future development and cost reduction. This report assesses the various alternatives available for developing the outlying Herring and Halibut fields and redeveloping the Albatross Field. Emphasis is placed on the new technologies that can be used to increase the existing production levels, while at the same time keeping the operating expenditure (OPEX) at minimal. The ideal concepts are also suggested. The potential of using the new technologies Several methods can be used to increase production over the current levels, reduce Capex and Opex over the plan period and Leverage the existing assets at Albatross. These include de-pressurizing of the Albatross reservoirs, infill drilling by targeting untapped or un-drained attic oil and compartmentalized accumulation and developing the satellite fields. Increasing production over current plan levels Permeability homogenization and de-pressurization From the case, it can be argued that Albatross Field is made up of weakened sandstone material. Since weak sandstone tend to have a greater loss of conductivity, it is critical to note that reducing rock permeability because of loading is relative to the initial value. This is since permeability will be reduced leading to permeability homogenization (Standness et al. 2005). Additionally, since it is clear that production of oil at Albatross is by water-flooding, this would result to progressively increased water-oil-ratio (WOR), which can lead to abandoning the field. However, once the water injection is stopped and the reservoir generates through depletion, oil production rate is achievable at economical rates. Implementing de-pressurization is therefore crucial as it will promote larger fluid viscosity, fluid saturation and phase mobility. It can also compact rock (Standness et al. 2005). Consequently, Oil and gas production rates at Albatross Field can be increased and maintained once the water injection is halted and the reservoir generates oil by depletion. This technique has been tried at Brent Field in 1992, where de-pressurization was used to boost oil and gas production. The technique entails decreasing the pressure in the field to just under the bubble point. This facilitates the breakout of solution gas, which increases recovery of gas from the production wells (Buller et al. 2004). Despite this, the technique has underlying shortcomings. It will require a high initial Capital expenditure (Capex) for conversion of 3 of the 4 platforms at Albatross to low pressure systems. Additionally, because of the reservoir pressures that are low, the infill wells will have to be drilled through the highly depleted zones of nearly 4000 psi differential. This can cause substantial complications due to lost circulation. Reducing Capex and Opex over the plan period Enhanced oil recovery (EOR) methods EOR encompasses the techniques for increasing the level of crude oil extractable from an oil field. It also refers to improved oil recovery (IOR). Use of EOR can ensure improved oil production at Albatross Field by between 30 and 60 percent (Sino Australia Oil 2013). EOR is leverages oil mobility using the drilling processes in mature wells. It ensures this by injecting fluids into the drilling process. Basically, the fundamental principle of the technique is that by injecting chemical, steam or gas and into the reservoir, the recovery rates increase since they clear bypassed oil and residual from the well (Alvarado & Manrique 2010). Enhanced oil recovery (EOR) methods include chemical methods, which include polymer flooding, chemical flooding, hydrocarbon displacement and Liquid Carbon Dioxide Flooding. Physical EOR method include thermal recovery, which in turn includes steam-flooding, gas drive oil. Biological methods include microbial injection. Technical methods include Radial hydraulic jet drilling technology Hydraulic fracturing technology, Overall, the EOR methods are relevant for the Albatross Field case scenario, since they can reduce Capex and Opex over the plan period. In-fill drilling encompasses identification of places of bypassed oil. Consequently, additional wells are drilled in the field to target the placed. Two options can be used to this end. These include Through Tubing Rotary Drilling (TTRD) and Coiled Tubing Drilling (CTD) (Alvarado & Manrique 2010; Engineering 2002). Leveraging existing assets Integrated field development Engineering field development study and integrated geosciences study should be conducted at Albatross to identify satellite structure to pave way for drilling additional wells for the mature field. The wells can afterwards be integrated using pump optimization method. This method has been tried in Argentina in leveraging the existing oil assets (Blade Energy Partners 2014). In the present case study, Herring Field can be developed as a satellite field. Herring is made of Middle Jurassic Sandstone reservoir, which is at close proximity to a salt diaper. Herring Field is also sectioned out by two sealing faults. Pressure maintenance is suggested for developing Herring Field. A single water injector is suggested for the next base. Further, a 2 leg multilateral well should be used in developing the Herring 1. Drilling of the derelict exploration well is further suggested to minimize costs. Pump optimization method using Framo multiphase pump should then be used to route the production stream to the Albatross A3. In using a pumping manifold, three additional Herring accumulation can further be developed to additional satellite wells, as a result allowing least flowline requirements in addition to easier and cost-effective tie-back (Framo Engineering 2002). Additionally, Operators at Albatross Field can also use Swellable Packer technology to separate multiple zones at the open-hole wells. In addition to reducing the cost of well construction, it can extend the life of the mature well (Akhter et al. 2012). Swellable elastomers consist of inflatable packer systems that seal-off open-hole or case annuli. They also contribute to zonal isolation, which is necessary in the case of Albatross Field as it can attain the efficient seal between reservoirs. Since the elastomers are made to swell in various mediums such as water or oil-based fluid, it can be used in open-hole. It also replaces the need to use costly cementing operations. Available technologies and their potential to achieve the objectives Improved Oil Recovery (IOR) and Enhanced Oil Recovery (EOR) IOR methods cover EOR methods and the new drilling and reservoir monitoring techniques. Following the rise of mature oil fields and decline oil discoveries of the past decade, EOR technologies have been hailed as capable of meeting rising demands of energy. Based on reservoir lithology, several researchers have concluded that EOR are mostly applicable in sandstone reservoir, hence their application is limited (See Figure 1) Figure 1: EOR methods by lithology (Alvarado & manrique, 2010). As indicated in the Figure 1, EOR thermal and chemical techniques are the most applicable in sandstones, specifically turbiditic formations, and carbonates. This makes them applicable for the case of Albatross field. a) Thermal methods Thermal methods include steam-flooding, steam-assisted Gravity Drainage (SAGD) and cyclic injection. They are mostly used in recovering heavy and heavy oil in sandstone decades. They have been used successfully in China, Brazil and the United States. Steam-injection methods optimize steam injection through the use of solvents, foams, chemical additives and gases. SAGD is effective in increasing oil drilling in oil sands, particularly in oil well with high vertical permeability. b) Chemical methods BrightWater and Colloidal Dispersion Gels are two innovative polymer-based technologies that are applicable to the scenario. They both serve to boost volumetric sweep efficiency n mature fields, specifically in reservoirs that have high permeability. Successful DPG implementation has been in Daqing Field in China. In using DPG, use of millimeter-sized gels can significantly lessen permeability of an open conduit as it forms gel-pack. The gel-pack weakens the functioning of particle-size and the opening size of the conduit. The gel particles that are swollen experience improved oil injectivity compared to that particles swollen ones with larger diameter. In regards to BrightWater, Alaska’s Milne Point Field has implemented it successfully. Since the oil and gas production is declining while the water cut appears to be increasing, BrightWater system can be used to offset the problem. BrightWater is a chemical that is combined with the injected downhole and injection water. Additionally, they are thermally active polymer designed to trigger based on the injection to the temperature gradient for oil production (Shell 2010). Once triggered, the nanoparticles of the BrightWatre start to expand by nearly 10 times. On expansion, their retention occurs in the reservoir. Eventually, they redirect injection water into the oil-rich regions at Albatross field that are yet to be tapped. In this way, additional oil is pushed to the purchasing wells (Shell 2010). Intelligent completion (IC) technology Intelligent-completion technologies consist of smart technologies used in optimising hydrocarbon production by enhancing the oil recovery and management methods, zonal isolation, efficient time recovery and sub-surface flow control in vertical and horizontal well (Pitzen 2006). IC consists of systems designed for collection, conveyance and analysis of data. The data is afterwards transmitted remotely. This implies that intervention would not necessary to access the date or to alter the configuration of the well (SLB 2007). The underlying outcome is the significant reduction of Opex and Capex. In the case of Albatross Field, the goals of Intelligent Completions technology would be to prevent routine intervention for management of the reservoir and automating the wells and the processing facilities. The technology is operable using wireless technology, hence reducing the number of personnel and the related transportation costs. This reduces costs (SLB 2007; Clouzeau et al. 1998). Reentry drilling While Albatross Field contains reservoirs that have used vertical wells for a long time, simple workovers such as acid stimulation, re-perforating, and hydraulic structure treatment can improve production (Hill et al. 1996). However, a much better solution would include re-entering existing wells and drilling horizontal lateral using slimhole measurement while drilling (MWD) and Coiled tube drilling (CTD). Slimhole drilling (MWD) and (CTD) can generate a wealth of options for return on interest on Albatross mature field. CTD is hailed as an economic solution that can drill and workover operations in mature or overused wells. It increases drilling penetration (Hill et al. 1996). On the other hand, slimhole drilling refers to a technique of tapping into oil reserves in mature filed to reduced volume of waste. For instance, slimhole drilled to 14,750 feet and which ends with a 41/8 inch bottom-hole can generate a third less volume compared to standard wells. Integrating CTD and slimhole ensured optimisation of mature oils and reduced oil production cost. This is particularly so when Measurement-while-drilling (MWD) is used to promote greatly accurate drilling. This allows for accurate geo-steering, which ensures the reservoir is optimally exposed and that minimal-sized hole is drilled. Given the accuracy of the system, the risk of erroneous well placement or dry hole is avoided (Clouzeau et al. 1998; Stockmeyer et al. 2006; Mancini et al. 2004). Multi-lateral wells In using the multi-lateral wells, construction costs are reduced through augmented use of the oil wells on the top-hole sections. This ensures the best possible economic solution as it substantially increases the existing reservoir contact area. However, it minimizes the topside infrastructure. Additionally, it reduces the platforms’ slot requirements. In using this technology, the Albatross wells should be drilled in a way that allows the reservoir’s multiple compartmentalized sections to intersect (Clouzeau et al. 1998). Risk matrix Risk Matrix Risk Level Risk Description High Reduced production, Higher Capex cost, Higher Opex cost, Limited WOB, Poor hole cleaning, High intervention costs in the case of failure, adverse effect on organizational operations. Moderate Limited WOB, Poor hole cleaning, adverse effect on organizational operations. Low Poor hole cleaning, effect on organizational operations. Technology Risk Level Relative Risks IC technology Moderate High intervention cost, reduced oil production Slimhole design Low Adverse effect on organizational operations. EOR’s BrightWater technique Moderate Limited WOB, Poor hole cleaning, adverse effect on organizational operations. CTD Moderate Limited WOB, Poor hole cleaning, adverse effect on organizational operations. Multilateral walls Moderate High intervention cost, adverse effects on organizational operations steam-assisted Gravity Drainage (SAGD) High Higher Capex cost, Higher Opex cost, High intervention costs in the case of failure, adverse effect on organizational operations. Estimate of the expected gains From the risk assessment, it is clear that has the lowest risk. It also has the potential to meet Big Oil and Gas Ltd and Vulture Exploration and Production’s objectives of reducing production costs and optimizing production from the mature wells. From the existing platform wells, Slimhole drills and CTD are recommended as suitable for accessing by-passed oil within the Albatross field. To boost production from mature fields, slimhole technology would be the most cost-effective solutions. They can also reduce oil production cost. Multilateral walls would not be effective because of its high intervention costs. However, it can be suitable for Herring field. In using multilateral well at Herring field, it is estimated that an extra 30 percent of the 40 million of the reserve’s 40 million barrels would be accessed. The initial single production well is estimated to generate some 8 million barrels over a seven-year period. The extra multilateral leg would allow this to rise to about 12 million barrels over the seven-year period if it is assumed that the compartments have similar reservoir properties. BrightWater EOR technique is also suggested as it will increase oil production. However, its poor hole cleaning nature may increase production cost. Summary of Implementation Issues Drilling of the slimhole wells is expected to have a range of implementation issues related to dynamism technology. The CTD and slimhole drilling technology are not as common as the conventional drilling equipment. In some cases, customized parts have to be ordered from the manufacturer. This potentially leads to lead time issues. Additionally, the backup equipment may have to be sourced and be accessible during the start of the drilling campaign. At the same time, integrated approach should be used where a service company is hired to supply the required components of the well. This may lead to risk/gain share as a result reducing likely risks. Additional implementation issues include cases where the workers at the rig do not work routinely with small diameter tubular. This implies that training will have to be carried out to make sure that the workers can handle the small diameter tubular and that they become well versed with the related well control and drilling activities (Pike 2007). Conclusion EOR methods, specifically BrightWater system, should be used in treating the Albatross Field. It is a simple solution capable of increasing production of oil from the bypassed accumulations. Additionally, the treatment does not need any intervention processes or work. Further, oil production remains undisrupted. In addition, there is a need to undertake seismic re-evaluation of the field to discover the bypassed oil reserves. Based on the results determined, slimhole completion technology and CTD can be applied to the wells that perform worst. Lastly, the Herring 1 prospect needs to be developed using multilateral drilling technique. Reference List Akhter, M, Qamar, S, Pervezm T 2012, "Swelling Elastomer Applications In Oil And Gas Industry," Journal of Trends in the Development of Machinery and Associated Technology Vol. 16, No. 1, pp.71-74 Alvarado, V & Manrique, E 2010, "Enhanced Oil Recovery: An Update Review," Energies vol. 3, pp.1529-1575 Blade Energy Partners 2014, Selected Projects Details, viewed 5 July 2014, http://www.blade-energy.com/blade-website.nsf/web-content/E8D3499161A1DB4F862578E60062AB07 Buller, A, Karstad, O & Koejer, G 2004, Carbon dioxide capture, Storage and Utilisation. Research & Technology Memoir No.5. 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