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Building a “New Normal” on the Bedrock of Risk Management

Martin Craighead became president and chief executive officer of Baker Hughes on 1 January 2012. He joined the company in 1986 and has served in various engineering, operations, managerial, and executive positions throughout North America, Latin America, and Asia Pacific. Craighead was named chief operating officer of Baker Hughes in 2009 and was appointed president in July 2010. He earned a BS degree in petroleum and natural gas engineering from Pennsylvania State University and an MBA from Vanderbilt University.

Historically, our industry has been driven by a series of inflection points to re-examine best practices, technologies, or philosophies on how we conduct our business. The most notable of these have often been associated with tragedies such as the 1988 Piper Alpha disaster in the North Sea and, most recently, the Macondo disaster in the US Gulf of Mexico. Piper Alpha led to a wide-scale focus on health, safety, and the environment (HSE), fundamentally changing the way companies viewed safety, and led to orders of magnitude improvement in HSE practices. While the full impact of Macondo is only now being fully understood, it is clear that we will see a similar effect on the way we handle quality, competency, safety critical systems, and contingency planning.

In both of the incidents, external pressure precipitated the cultural or technical shift to a new operating norm, while the capabilities and technology for bridging the gap were available. Until we consider risk management and operational sustainability as business drivers and an equal part of our mission, we will never make the paradigm shift from a reactive to a proactive business model.

The industry’s goal should be an incident-free environment, but government regulation alone will not help the industry achieve that goal. The reservoirs our industry is targeting are more challenging, the environments are harsher, and the technology required is ever more complex. As an industry we must be willing to go far beyond what is regulated—we must fundamentally change the culture of our business to address risk management in our processes, our technology, our talent management, and our safety programs.

Consistent processes and procedures across our business are the foundation for this change. A common operating system not only ensures that we meet regulations in all areas where we work, but also establishes repeatable performance that takes us far beyond what is required. Generally, there is one best way to perform an activity, whether it is solving problems for our customers or developing new products and technology.

Read the entire editorial in the January 2012 issue of JPT.

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Well Control

Procrastination: Is it too many things going on at once that causes us to rush to meet deadlines, or makes us forget to complete important tasks in a timely manner, or even try to do too many things at once, resulting in nothing getting done correctly? You probably are wondering how this relates to well control. In our work schedules, we all are faced with situations in which we are required to complete multiple concurrent tasks. This often is the case when we rush to finish drilling a problem well so that we can get the drilling rig moved to the next location and turn this well over to the completions team. Multiple activities must be completed concurrently that, individually, are relatively simple, but each activity requires the attention of the driller, tool pusher, company man, and others on the crew. When one of these tasks begins to go awry, our attention may be on something else, and we can miss important warnings until it is too late to avoid a disaster.

What is the point? Once again, I will use the Macondo blowout as an example. To leave the well in a position to be completed by another crew, mud had to be removed from the riser and top of the well and be replaced with seawater. A spacer was pumped between the mud and seawater to prevent mixing of the seawater and mud. This is a simple enough operation, it seems, but when seawater is being pumped into the well, mud has to be pumped onto a workboat to prevent the pits from running over, and the spacer is being dumped overboard; keeping track of how much of each fluid is going where becomes a daunting task. Could this have been a contributing factor in not recognizing the beginning of the kick?

Jerome Schubert, SPE, is an assistant professor in the Harold Vance Department of Petroleum Engineering at Texas A&M University. He has more than 30 years’ experience with Pennzoil, Enron Oil and Gas, the University of Houston– Victoria Petroleum Training Institute, and Texas A&M University. Schubert earned BS, ME, and PhD degrees in petroleum engineering from Texas A&M University. He is a coauthor of Managed Pressure Drilling and the author of more than 35 technical papers. Schubert serves on the JPT Editorial Committee and has served on several SPE committees and as a Technical Editor for SPE Drilling & Completion. He serves as Faculty Advisor for Pi Epsilon Tau. Schubert is a registered professional engineer in Texas.

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Mature Fields and Well Revitalization

Revitalizing mature fields embraces multiple objectives, especially maximizing production while minimizing capital expense and reducing the inevitable decline rate and minimizing the operating expense. The collective approach to meet these objectives is application of practical and focused engineering and geology tied with the application of enabling technologies.

Key enabling technologies in the revitalization of mature fields include reservoir simulation, advanced characterization techniques (e.g., 3D seismic and new measurement, tomographic, and visualization techniques), permanent downhole reservoir monitoring, horizontal and multilateral drilling, geosteering, production-enhancement techniques (e.g., secondary- and tertiary-recovery schemes), improved perforation and stimulation methods, new fracturing techniques and fluids, cutting-edge completion technologies, advanced logging techniques, artificial-lift optimization, and conformance control.

Implementation of appropriate enabling technologies can extend the producing life of mature fields. Yet the complexity of some of these fields can still present formidable challenges. It takes the right data, the right tools and techniques, and the right team to create an efficient, cost-effective field-development plan to optimize an aging asset.

Read the paper synopses in the January 2012 issue of JPT.

Syed A. Ali, SPE, is a research advisor with Schlumberger. Previously he was a Chevron Fellow with Chevron Energy Technology Company. Ali received the 2006 SPE Production and Operations Award. He earned BS, MS, and PhD degrees. He served as the Executive Editor of SPE Production & Operations and currently serves on several SPE committees, including the JPT Editorial Committee and Well Completions Subcommittee.

 

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EOR Performance and Modeling

In spite of continued investment and advances in exploiting alternative energy sources, oil and natural gas will continue to be a significant portion of US and global energy portfolios for decades. Enhanced oil recovery (EOR) uses unconventional hydrocarbon-recovery methods that target the approximately two-thirds of the oil volume remaining in reservoirs after conventional-recovery methods have been exhausted. Though limited by high capital and operating costs, EOR techniques will have a substantial effect on the future supply of oil.

In 2011, SPE hosted an EOR conference in Kuala Lumpur, and three workshops to address EOR technologies in Malaysia, Kuwait, and the Syrian Arab Republic. The Malaysia workshop focused on chemical-EOR methods, the Kuwait workshop addressed opportunities and for challenges of EOR methods in the Middle East, and the Syrian Arab Republic workshop discussed EOR in carbonate reservoirs. More than 300 EOR papers were published in SPE conferences, with many additional presentations in EOR workshops. These papers address important issues related to practical application of conventional EOR methods and the development of novel EOR technologies. The topics cover experience with, opportunities for, and challenges of EOR technologies; fundamental study of EOR mechanisms for different methods; feasibility study and improvement of an EOR method for a specific reservoir; EOR-screening criteria; reservoir surveillance, monitoring, and evaluation technologies; reservoir simulation and modeling; lessons learned from EOR pilot and field trials; and some novel EOR methods.

Polymer flooding has been proved the most cost-effective chemical-EOR method in the laboratory and in the field. A recent focus on polymer flooding evaluated associative polymers because of their advantage over traditional hydrolyzed polyacrylamide (HPAM) polymers; thus, one paper about comparing the flow behavior of associative polymer and HPAM in porous media was selected for this feature.

CO2 injection is a win/win strategy because it can enhance oil recovery and be used for CO2 storage in reservoirs to reduce greenhouse-gas levels in the atmosphere. However, CO2 EOR targets maximum oil recovery while CO2 sequestration targets maximum storage capacity without leakage. One paper featured here provides some guidance to balance the two technologies.

Steamflooding has been applied successfully in heavy-oil reservoirs. However, one paper synopsized in this feature will describe successful steamflooding in a lightoil reservoir.

EOR opportunities in the Middle East are also highlighted.

Read the paper synopses in the January 2012 issue of JPT.

Baojun Bai, SPE, is an associate professor of petroleum engineering at Missouri University of Science and Technology. Previously, he was a reservoir engineer and head of a conformance-control team for PetroChina. Bai holds PhD degrees in petroleum engineering and in petroleum geology. He serves on the JPT Editorial Committee and as a technical editor for SPE Journal and SPE Reservoir Evaluation & Engineering.

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SPE Drilling & Completion – featured papers

View the entire contents of the December 2011 issue.

Completion Design and Execution

151970-PA – Completing the First Big Bore Gas Wells in Lunskoye–a Case History
C. Zerbst, SPE, and J. Webers, SPE, Sakhalin Energy Investment Company Limited

134326-PA – Numerical Simulations of Sand-Screen Performance in Standalone Applications
Somnath Mondal, SPE, and Mukul M. Sharma, SPE, University of Texas at Austin; and Rajesh A. Chanpura, SPE, Mehmet Parlar, SPE, and Joseph A. Ayoub, SPE, Schlumberger

Drilling and Completion Fluids

140868-PA – Development of Water-Based Drilling Fluids Customized for Shale Reservoirs
J.P. Deville, B. Fritz, and M. Jarrett, Halliburton

135166-PA – Protecting the Reservoir With Surfactant Micellar Drill-In Fluids in Carbonate-Containing Formations
Tianping Huang, SPE, James B. Crews, SPE, and David E. Clark, SPE, Baker Hughes

141447-PA – Stabilizing Viscoelastic Surfactants in High-Density Brines
R. van Zanten, SPE, Halliburton

130579-PA – Laminar and Turbulent Friction Factors for Annular Flow of Drag-Reducing Polymer Solutions in Coiled-Tubing Operations
Chinenye C. Ogugbue, SPE, and Subhash N. Shah, SPE, Well Construction Technology Center, University of Oklahoma

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Mitigating Disaster–A Look at the Ohmsett Oil Spill Research and Test Facility

Robin Beckwith, Staff Writer JPT/JPT Online

On 11 October 2011, the X Prize Foundation announced the winners of the USD 1.4 million Wendy Schmidt Oil Cleanup X CHALLENGE, launched during the summer of 2010 in the wake of the Deepwater Horizon oil spill disaster in the US Gulf of Mexico. According to a press release, “the competition inspired entrepreneurs, engineers, and scientists worldwide to develop innovative, rapidly deployable, and highly efficient methods of capturing crude oil from the ocean surface.” Emerging from an original field of more than 350 submissions from all over the world, Elastec/ American Marine of Carmi, Illinois, captured the USD 1 million first prize, with Norway’s NOFI Tromsø awarded the USD 300,000 second prize; no contestant’s cleanup system qualified to receive third prize.

Testing the 10 finalists’ technologies in order to determine the winner would have been impossible were it not for a facility called Ohmsett (Oil and Hazardous Materials Environmental Test Tank). What is Ohmsett, and why is it so critical to the development of oil spill prevention and mitigation technology?

Read the full article in the December 2011 issue of JPT

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West of Shetland Development Gathers Momentum

John Sheehan, JPT Contributing Editor

BP is ramping up its West of Shetland operations with the UK government approval to push ahead with the second phase of its giant Clair field development, Clair Ridge. Plans to redevelop the Schiehallion and Loyal fields with a new floating production, storage, and offloading vessel (FPSO) are also gathering pace.

The Clair reservoir is the largest known hydrocarbon resource on the UK Continental Shelf (UKCS), occupying an area of 220 sq km. It is located approximately 75 km west of the Shetland Isles in 459 ft of water. Because of its size and complexity, it is being developed in phases.

Clair Ridge, in UKCS Block 206/8, lies to the northeast of Clair Phase 1 and will be tapped with a pair of bridge-linked platforms–a drilling and production (DP) facilities platform and an accommodation and utilities (QU) platform. The new platforms have a 40-year design life and will require a total capital investment of about GBP 4.5 billion (USD 7.16 billion).

Read the entire article in the December 2011 issue of JPT.

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Can Geoscientists Resolve the CCS Paradox?

International energy and climate organizations have found carbon capture and storage (CCS) to be a promising technology to resolve the squeeze between fast-growing global energy needs and global warming. Even environmental organizations say that making our energy use more efficient and building enough new renewable energy capacity takes too long. We need to get the CCS working to curb the growing greenhouse gas emissions if too large a climate change is to be avoided.

CCS consists of three major interdependent steps:

  • Capture the carbon, CO2 out of flue gases, either from the stack of a power plant or the blast furnace top gas in iron making.
  • Transport it by pipeline or ship it underground.
  • Safely keep it in a storage site for thousands of years.

The technology for each of these steps has been used for decades in the industry, mostly in oil and gas. The important change is the scale–from about 100,000 to 1 million metric tons per year in the past. Today, we see the need for handling 10 million tons in each installation and for perhaps several thousand installations. The amount of CO2 produced from one power station varies from 2 million to 10 million tons; a modern iron-making blast furnace emits up to 10 million tons per year. The costs of the technologies for a large-scale CO2 handling chain are estimated to be split roughly 75%-10%-15% for capture-transport-storage.

Read the entire article in the December 2011 JPT.

Tore A. Torp is adviser for CO2 storage at Statoil, leading the storage part of Statoil’s research and development program (R&D) on CO2 capture and storage. He joined Statoil in 1984 from the steel industry. Between 1984 and 1996, he led large international R&D cooperation projects developing complex offshore field technologies. Since 1997, he has been project manager of Statoil CO2 storage R&D projects. He was vice chairman of the CSLF Technical Group, and was a lead author of the IPCC Special Report on Carbon Dioxide Capture and Storage. He received a PhD in material sciences from Norwegian University of Science and Technology.

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Bit Technology and Bottomhole Assemblies

The last decade has seen significant change in many areas of the drilling business, particularly with bits and bottomhole assemblies. Rising drilling costs, more-complex and -demanding drilling environments, and the ever-present stimulus of provider competition are continuing to drive improved understanding and decision making in this area. The days when bits were seen as simple commodities, with their leverage on well time and cost unrecognized, are fading. And this is long overdue.

Particularly encouraging is the growing use of field-behavior modeling of the bit and drillstring under realistic conditions, and the development of knowledge- based tool-selection techniques, refined by an intensive study of field data. The migration toward deeper or more-tortuous well designs, often accompanied by simultaneous drilling and hole opening in regions in which vibration effects are prolific and are more punishing, is leading to more understanding and rigor. These are admirable trends that more-traditional operations can and should capitalize on, and sometimes are.

My learned colleague Graham Mensa-Wilmot wrote of these trends a year ago in this feature, correctly pointing out to us that “We have the key, let’s open the door.” Perhaps we can claim to have done so with some challenges and in some geographical areas (e.g., vibration diagnosis and mitigation in deepwater Gulf of Mexico operations). However, with other equally important challenges (quantitative optimizing of the rate of penetration comes to mind), fundamental understanding and rigorous methods are not so widespread; we are still operating with “pockets of excellence.” So, it is appropriate to lay another challenge to those managing drilling operations and providing drilling services–if your teams are relying on a fuzzy definition of downhole processes or on trial and error to deliver drilling performance, it is time to modernize–let’s have the current pockets of excellence show the rest of us the way.

Read the paper synopses in the December 2011 issue of JPT.

Martyn Fear, SPE, is General Manager of Drilling & Completions for Husky Energy’s Atlantic Region, Canada. He has more than 25 years’ experience in drilling optimization and operations management across a wide variety of international locations. Fear serves on the JPT Editorial Committee. He earned a BSc (Honors) degree in geological sciences from the University of Birmingham, England.

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Production Facilities

Every year, SPE organizes more than 30 conferences worldwide. Critical issues of current interest to the oil industry are reflected in the SPE papers presented at these conferences. When selecting papers for this feature, I was not surprised that many papers deal with topics related to safety in facilities design and to asset integrity.

With recent publicized accidents and the industry’s continuing concern about its public image, operating companies are focusing on process safety and improving asset integrity, and are addressing these issues early in facilities design. Indeed, it can be argued that enhancing safety performance and dealing with the increased environmental risks remain the key challenges facing the industry today. Some concepts relevant to these topics are briefly outlined.

Asset integrity can be defined as the ability of the asset to perform its required function effectively and efficiently while managing health, safety, and the environment. In this context, asset integrity refers to hydrocarbon systems and includes support systems and infrastructure, such as platform structures.

Critical safety elements are those systems and equipment that prevent, control, or mitigate major accidents. They include elements such as pressure-relief valves, shutdown systems, fire- and gas-detection systems, and firefighting equipment.

Safety instrumented systems (SISs)—since its publication in 2003, the International Electrotechnical Commission (IEC) 61511 standard is becoming the basis for the specifications and implementation of SISs in the oil industry. Initially, the industry was relatively slow to adopt this standard. A dilemma facing operating companies is what to do about the existing shutdown safety systems that were installed before 2003 and that are not in compliance with IEC 61511.

Papers selected for this feature along with those recommended for additional reading highlight industry progress in these issues. I hope that they will be of interest to you.

Read the paper synopses in the December 2011 issue of JPT.

Hisham Saadawi, SPE, is Vice President (Engineering) for Abu Dhabi Company for Onshore Oil Operations (ADCO). He has more than 30 years’ experience in the design, construction, startup, and operation of oil- and gas-processing facilities. Saadawi’s current areas of interest include multiphase pumping, CO2 enhanced oil recovery, technical safety, as well as training and development. He is a recipient of the 2011 SPE Regional Projects, Facilities, and Construction Award. Saadawi is a 2010-2011 SPE Distinguished Lecturer and an SPE course instructor. He has served on several committees and subcommittees of SPE conferences and workshops, and he serves on the JPT Editorial Committee. Saadawi holds a PhD degree in mechanical engineering from the University of Manchester, UK, and is a Chartered Engineer in the UK.