World Oil 2012 03

GEOLOGY & GEOPHYSICS
COILED TUBING TECHNOLOGY

First fiber-optic CT logging improves
water shut-off in Saudi Arabia
MANAGED PRESSURE DRILLING
Record HTHP well in Norway reaches TD
with MPD flow detection and control
REGIONAL OUTLOOK: INDIA
Focus shifts to early production
and enhanced recovery
SHALE ENERGY: FAYETTEVILLE
Exploiting remaining potential
will have to await higher gas prices
MARCH 2012 / DEFINING TECHNOLOGY FOR EXPLORATION, DRILLING AND PRODUCTION / WorldOil.com
World Oil/MARCH 20123
SPECIAL FOCUS:
COILED TUBING
TECHNOLOGY
35 Fiber-optic coiled tubing
logging improves reliability of
water shut-off in Saudi oil well
J. Duarte / S.Haldar / R. Said /
A. Burov / W. Kharrat / J. Stuker
SPECIAL SECTION:
44 AAPG AT A GLANCE
47 How local variations in thermal
maturity affect shale oil
economics and producibility
J. Edman
55 Oil fingerprinting dramatically
reduces production allocation
costs
M. A. Mccaffrey / D. K. Baskin /
B. A. Patterson / D. H. Ohms /
C. Stone / D. Reisdorf
SHALE ENERGY
62 Fayetteville remaining
potential awaits higher prices
K. Abraham
ABOUT THE COVER
PGS seismic vessel Ramform Expedition leaves
northern Greenland after completing the industrys
most northerly 3D survey.
70 35
CONTENTS
MARCH 2012 / VOL. 233 NO. 3
COLUMNS
7 Editorial comment
(Incentive + Faith) Momentum
= Growth
15 Energy issues
Into the fracas
17 Whats new in exploration
The great Alaska shale rush
19 Drilling advances
Shrimp boats and icebreakers:
No place but Louisiana
21 Whats new in production
Shale gas development and the
public mindEducating trogs and
smart idiots
23 Oil & Gas in the Capitals
Oil or eminent domain?
China and the Spratlys
25 Executive Viewpoint
Too many variables, too little time
crafting strategy under ambiguity
27 Innovative thinkers
Harry Smith: The journey to 83
well logging patents
NEWS AND RESOURCES
9 World of oil and gas
29 Industry at a glance
32 Offshore rig activity
93 People in the industry
94 Companies in the news
95 New products and services
96 Advertisers index
97 Marketplace /
Advertising sales offices
98 Meetings and events
62
REGIONAL REPORT: INDIA
70 After a flurry of discoveries in
2002-04, oil and gas operators
in India now have twin aims:
bring to early production new
fields and enhance production
from mature fields
P. Kulkarni
77 Record HPHT Norwegian
well drilled with MPD flow
detection and control
S.K. Naesheim / F. Lefdal /
T. . Oftedal / B.G. Norge /
H. Sveinall
REAL-TIME OPERATIONS
83 Smart upstream collaboration
centers: Design, technology
support and lessons learned
A. A. Al-Qahtani / M. F. Hogg /
K. K. Lau / N. A. Al-Naser
INDUSTRY REPORT: NATIONAL
ENERGY TECHNOLOGY
LABORATORY
89 Mobility and conformance
control for carbon dioxide
EOR Part 1
Dr. R. Enick / J. Ammer /
W. Schuller
4MARCH 2012/WorldOil.com
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EDITORIAL
EditorPramod Kulkarni
Executive EditorKurt Abraham
Senior EditorPrint/OnlineNell Lukosavich
News EditorHenry D. Terrell
Offshore EditorJustin Smith
Contributing Editors
Dayse Abrantes, Latin America Saeid Mokhatab, LNG
Dr. A. F. Alhajji, Middle East Jeffrey M. Moore, Asia-Pacific
Dr. Roger Bezdek, Washington Dr. ystein Noreng, North Sea
Robert Curran, Canada Leonard V. Parent, Natural Gas
Dr. Ali Daneshy, Shale Technology Nina M. Rach, Exploration
Jerry Greenberg, At Large Jim Redden, Drilling
Raj Kanwar, South Asia Jacques Sapir, FSU
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EDITORIAL COMMENT
PRAMOD KULKARNI, EDITOR
(Incentive + Faith) Momentum = Growth
Look, ma! Ive come up with an equa-
tion that governs economic growth. I
dream up such off-the-wall concepts
between 4 and 5 a.m. U.S. Republican
presidential candidate Rick Santorum
would perhaps attribute this to divine
inspiration. Sigmund Freud would prob-
ably point to a psychological disorder or
blame my mother.
What my equation lacks is academic
flourish. Ill have to outsource this task to
a top-flight, low-cost think tank to sprin-
kle some exponents and integral func-
tions, to add just enough obfuscation to
confuse even Nobel Laureate and Energy
Secretary Paul Chu.
Here is an explanation of the variables
involved in this equation with examples
from our oil and gas industry.
Incentive. I am not likely to get an
argument about this variableeco-
nomic incentive. It is this factor that has
fueled the shale gas revolution. When
natural gas prices were at $10/Mcf and
the U.S. was expected to be a major mar-
ket for LNG imports, there was plenty
of economic incentive for intrepid inde-
pendent operators to increase revenues
through technological innovations, such
as horizontal drilling and multi-stage
fracturing. Now that gas prices have
dropped to $2.50/Mcf, there is a sub-
stantial downturn in drilling activity. On
the other hand, the uptick in oil-directed
drilling is a consequence of the econom-
ic incentive provided by oil prices climb-
ing above $100/bbl.
Faith. What I call faith-based E&P
is activity that is conducted, even when
there is insufficient economic incentive.
For example, while companies such as
Chesapeake, are downsizing their dry
gas activity, ExxonMobil has vowed to
continue all of its gas operations, based
on the companys faith that the cur-
rent drop in gas prices is a short-term
phenomenon. The major oil company
believes the long-term fundamentals will
lead to higher natural gas prices in the
near future.
Another example is the Obama ad-
ministrations faith in the future of re-
newable resources in the absence of an
economic incentive. Billions have been
spent on new solar and wind projects be-
fore an incentivized market has emerged
for these high-priced and still-evolving
energy sources.
Still another example would be that of
a state-directed NOC that will have as its
operating tenetfull employment for its
workers in spite of negative economic
conditions.
Momentum. This is the variable that
has a significant impact on growth. The
best example of momentum is the mush-
rooming of shale plays in North America.
The Barnett is the granddaddy of U.S.
shale plays and how quickly the shale
family has grownMarcellus, Haynes-
ville, Bakken and Eagle Ford. Two years
ago, World Oil decided to cover the shale
plays in alternating months. This year, we
doubled the coverage to 12 plays, one per
month. With the continuing emergence
of new plays, such as the Mississippi Lime
and the recent USGS assessment of both
shale oil and shale gas in Alaska, we are at
a point of asking the Earth to slow down
its rotation around the Sun so that we can
have at least 15 months in a year.
An example of a downward shift in
momentum is the activity in the Gulf
of Mexico. Prior to the Macondo spill,
drilling and production operations had
reached a recent high. The Perdido spar
had just started production, the indus-
try was moving ahead on exploring the
Lower Tertiary plays, and there was even
excitement about shallow-water potential
with the discovery of the Davy Jones pros-
pect by McMoran. The Obama adminis-
tration disrupted this momentum with
a six-month moratorium and the sub-
sequent permitorium. It will take some
time before we are able to return to the
pre-Macondo optimism and enthusiasm.
Such is the stuff my dreams are made
of. Are there any oil and gas psychoana-
lysts around?
IN THIS ISSUE
44
Geology & Geophysics
special section. World Oil
is pleased to introduce a special section
on this leading edge of the E&P cycle.
We plan to publish three of these G&G
sections each year in March, May and Oc-
tober to coincide with the AAPG, EAGE
and SEG conferences. Each G&G special
section will include a preview of each of
the conferences and several technical ar-
ticles covering different aspects of the
latest geological and geophysical tech-
nologies. In this issue, we are focusing on
geochemical technologies with an article
from Janell Edman on how local varia-
tions in thermal maturity affect shale oil
economics and producibility with spe-
cific examples from the Eagle Ford play,
and an article from Weatherford, BP and
Alta Mesa authors on how oil fingerprint-
ing can achieve accurate geochemical
allocation at 1% to 5% of the cost of pro-
duction logging.
35
Fiber-optic coiled tubing
logging in Saudi Arabia.
Saudi Aramco and Schlumberger au-
thors describe the worlds first applica-
tion of fiber-optic CT logging in an open-
hole completion. The accurate log data
enabled the completion team to perform
optimum evaluation of well conditions
for the proper placement of water shut-
off fluids in the target zone and isolate
water producing intervals.
62
Shale Energy: Fayette-
ville. Executive Editor Kurt
Abrahams report on the Fayetteville shale
play in Arkansas reveals a rollercoaster ex-
istence for the dry gas producing region.
Full exploitation of the remaining poten-
tial from what is the second oldest shale
play in the U.S. will have to await an im-
provement in natural gas prices.
PRAMOD.KULKARNI@WORLDOIL.COM
HALLIBURTON Solving challenges.
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WORLD OF OIL AND GAS
NELL LUKOSAVICH, SENIOR EDITOR
EXPLORATION //////////////////////////////////////////////// PRODUCTION /////
UNCONVENTIONALS /////////////////////////////////////////
Cyprus ofers
seismic data for
licensing round
As the Republic of Cyprus
opened its 13-block second
licensing round, further steps
were taken to provide compre-
hensive data, including seismic,
to potential bidders. Accordingly,
Petroleum Geo-Services (PGS) is the official data provider and has
furnished Cypriot officials with a dense multi-client (MC) seismic data
grid. One component, the MC2D-CYP2006 survey, was acquired for
the first licensing round and has 10-by-20-km coverage. In addi-
tion, another survey, MC2D-CYP2008, infills the previous work, thus
providing 5-by-5-km coverage, on average. The most recent survey
offers the best possible data quality. Following reprocessing in 2011,
the original conventional data grid also has high data quality. Block
3 has the greatest MC data coverage, with 3D-quality data in part of
the block. Geological interpretation reports based on these data, as
well as hydrocarbon assessments, are available through the Ministry of
Commerce, Industry and Tourism.
Chevron to explore for shale gas in China
Chevron confirmed that it has signed a joint agreement to explore for shale gas in Chinas Qiannan basin.
The company began seismic operations in July 2011. Chevron didnt disclose its partner, but local press
outlets have reported that the agreement is with a unit of China Petrochemical Corp., known as Sinopec
Group. Qiannan basin is in the southwestern province of Guizhou.
Rosneft obtains
licenses for three
Barents Sea blocks
Rosneft has obtained licenses
for geological survey, explora-
tion and production of oil and
gas at three blocks on Russias
Barents Sea shelf. The blocks are
named Tsentralno-Barentsevsky,
Fedynsky and Perseevsky. The
blocks hold an estimated total
resource potential of 3.3 billion
tonnes of crude oil and gas
condensate and up to 98.89
Tcf of gas. Exploration of the
blocks envisages the acquisition
of 6,830 linear mi of 2D seismic
data and 1.35 sq mi of 3D seismic
data, as well as the drilling of five
wildcat wells.
Buccaneer granted
permits ofshore
Alaska
Buccaneer Energy has been
granted two key permits for
oil and gas exploration opera-
tions at the Southern Cross and
Northwest Cook Inlet units
offshore Alaska in the Cook Inlet.
The companys permitting plan
was implemented approximately
18 months ago and is on schedule
for completion prior to the arrival
of jackup rig Endeavour-Spirit of
Independence in the inlet.
Australian land exploration doubles
over last year
Professional services firm Deloitte released its fourth-quarter, 2011,
Drilling and Licensing Report, covering exploration and appraisal
drilling, plus licensing and deal activity in Australia for the December
quarter. The report states that onshore activity strengthened during
2011 as the year progressed, recovering from a spate of natural
disasters that hampered drilling levels in the first quarter, to finish
the year at close to pre-GFC (Global Financial Crisis) levels. Onshore
activity continues to be dominated by smaller independents, with a
131% increase in wells spudded since 2010. Offshore activity has risen
significantly, too, due largely to majors like Chevron and Woodside
searching for further gas to feed their planned, floating and conven-
tional LNG plants.
Jubilee production
misses output
target
Oil and gas production activities in
Tullows Jubilee field, situated off
Ghanas soutwestern coast, have
been hit by problems, and, as a
result, the projected output target
for this year cannot be met. Last
year, Tullow revealed that Ghana
lifted 3.9 million bbl of crude, mak-
ing over $444 million from its sale.
The company said in January that
it would not be able to meet its
projected 120,000-bopd produc-
tion target this year, but gave no
reason why. Currently, the field is
producing about 90,000 bopd.
CNPC to begin
eld development
in western
Uzbekistan
China National Petroleum Corp.
(CNPC) plans to begin develop-
ment of Eastern Alat gas-conden-
sate field in the Bukhara-Khiva
region of western Uzbekistan.
CNPC opened the Eastern Alat
gas-condensate field in the Karakul
investment block in 2011. In the
first half of this year, the company
must submit a report to the Uzbek
government about Eastern Alat
and natural gas reserves to ensure
continued protection in the State
Reserves Committee. According
to preliminary estimates, the first
three years of development could
require an investment of about
$150 million.
Cascade, Chinook
start producing
Brazils Petrobras started pump-
ing crude oil from two fields
in the U.S. Gulf of Mexico on
February 25. FPSO BW Pioneer is
now connected the the Cascade
4 well about 155 mi offshore
Louisiana. Petrobras had origi-
nally expected to start output
at Cascade and Chinook fields
in 2010, but the project was
delayed after the U.S. govern-
ment banned deepwater drilling
in the wake of the Macondo
disaster.
Polands PKN Orlen to intensify drilling
for shale gas in 2012
Polish state-controlled oil firm PKN Orlen plans to significantly
intensify work on its shale gas concessions in Poland this year and has
enough resources to continue exploration without partners, company
executives said. PKN Orlen holds eight exploration licenses for shale
gas in Poland, mostly in the countrys eastern area. The company
finished vertical drilling on one of the licenses, Wierzbica, last year.
KBR, JV partners sign EPC contract
for Ichthys LNG
KBR, along with its joint venture partners JGC and Chiyoda, signed
a contract for engineering, procurement and construction activities
on the Ichthys LNG project in northern Australia. The partners signed
the $15-billion contract with Ichthys LNG project owners INPEX and
Total. Gas from the Ichthys field, which is in the Browse basin about
124 mi off Western Australia, will be exported to onshore processing
facilities in Darwin via a 552-mi subsea pipeline. The Ichthys project is
expected to produce 389.5 Bcf of LNG and 18.9 million bbl of LPG per
year, along with approximately 100,000 bcpd at its peak.
India delays
shale gas auction
to 2013
Indias Petroleum Ministry has
again delayed its first-ever shale
gas exploration round, and now
plans to launch it in December
2013. The delays are attributed
to regulatory regimes currently
being put in place, including a
resource assessment and policy
framework for the upcoming
rounds as well as the official
identification of potential acre-
age to be auctioned. Indias shale
gas rounds, which will include
the Cambay, Assam-Arakan,
Gondawana, KG, Cauvery and
Indo Gangetic basins, have been
delayed since 2011.
GE Energy
Power Conversion
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BUSINESS //////////////////////////////////////////////
REGULATORY AFFAIRS /////////////////////////////////
Mitsubishi to invest $2.9 billion
in B.C. gas assets
Encana said that Japans Mitsubishi will invest about $2.9
billion to acquire a 40% stake in its undeveloped Cutbank
Ridge natural gas assets in northeastern British Columbia.
Calgary-based Encana had previously entered into a
larger agreement to sell a 50% stake in shale gas assets in
northeastern B.C. and northwestern Alberta to PetroChina
Co. for $5.4 billion, but that deal fell through last year.
Under the agreement, Mitsubishi will own 40% of the Cutbank Ridge partnership, which holds
about 409,000 net acres of undeveloped Montney shale lands in B.C., plus additional develop-
ment potential in the Cadomin and Doig geological formations.
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El Paso to sell E&P company
to Apollo, partners
El Paso has entered into an agreement to sell its exploration
and production business, EP Energy Corp., for $7.15 billion
to affiliates of Apollo Global Management and Riverstone
Holdings, which are joined by Access Industries and other
parties. The sale of EP Energy is dependent upon comple-
tion of the Kinder Morgan-El Paso transaction, which is
expected to close in the second quarter of 2012. The sale of
EP Energy is also expected to close around the same time.
BG Group to
invest $20 billion
in Tanzania gas
exploration
BG Group plans to invest up
to $20 billion to extract gas in
Tanzania, Chairman Robert Wilson
announced. BG has discovered
huge reserves of natural gas in
three wells in the Indian Ocean,
including one in deep water. The
firm invested $500 million in gas
exploration in the country last
year and plans to invest a similar
amount this year. Wilson called on
the government to join efforts to
remove obstacles that challenge
exploration and production activi-
ties in the Indian Ocean, especially
in dealing with Somali pirates. BG
entered Tanzania last year with
the purchase of 60% of Ophir
Tanzania, which had an explora-
tion contract with the government
and the Tanzania Petroleum
Development Corp.
Petrobras signs deals for 26
deepwater rigs
Brazils Petrobras has approved contracts for 21 offline
deepwater rigs with Sete Brasil, at an average day rate
of $530,000, and for five dual-activity rigs with Ocean
Rig, at an average daily rate of $548,000, all with 15-year
terms. These rates could be cut, if tax exemptions are
granted, as well as if operating costs can be reduced.
All of the rigs will be built in Brazil, with the first units
scheduled for delivery in four years. The final rig will
be delivered in 7.5 years. These contracts mean that
Petrobras has fully implemented its plan to contract 28
rigs to be built in Brazil, to meet the long-term demands
of its drilling program, primarily for pre-salt oil wells, as
well as a further five rigs not originally planned
Repsol gets okay to develop gas elds in Algeria
The government of Algeria authorized Repsol YPF and its partners to develop gas fields in the
North Reggane project. A Repsol-led consortium will invest more than $2.6 billion to develop
104 wells in six areas. The Spanish company has a 29.25% stake in the consortium, which also
includes Algerian state energy company Sonatrach, and Italian and German firms. Repsol said
that it plans to start producing in the middle of 2016 and carry on production for 25 years, with
the first 12 years yielding stable production of 284 MMcfgd.
Weatherford dismissed
from all Macondo claims
All claims against Weatherford International
in the multi-district litigation over the cause
of the Macondo blowout and oil spill have
been dismissed. In June 2011, Weatherford
announced that its U.S. subsidiaries had
reached agreements with BP to settle
any claims that may arise between the com-
panies relating to the Macondo blowout and
oil spill. Under the agreement, BP agreed
to indemnify Weatherford for current and
future compensatory claims resulting from
the incident. The entire cost of the $75 million agreement with BP was funded by insurance
policies that Weatherford had in place at the time of the incident.
The change will do you good
SM
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reached ahead of schedule.
Days
Microflux system Conventional
2 Lossesslow rate of penetration
3 Stuck bottomhole assemblyfishing
4 Lossesstuck pipe
5 Plugged and abandoned, sidetrack, lose well
1 Wellbore ballooning
DISCOVERIES //////////////////////////////////////////
Eni makes 7.5-Tcf gas nd
ofshore Mozambique
Eni made a new giant natural gas discovery at the
Mamba North 1 prospect, in Area 4 offshore Mozambique,
encountering a potential of 7.5 Tcf of gas-in-place. This
new find, in addition to the Mamba South discovery
from October 2011, further increases the potential of the
Mamba complex to 30 Tcf. During 2012, Eni plans to drill
at least five other wells in nearby structures to assess the
upside potential of the Mamba complex.
OGX makes
shallow-water,
presalt oil
discovery
Brazilian independent OGX has
confirmed a shallow-water oil
find in Brazils presalt region,
following an initial discovery in
January, when drilling tapped a
3,280-ft column of oil that had
net pay of 360 ft. Drilling was
halted after a high-pressure zone
was encountered. While the
OGX discovery is in the same
Santos basin where a cluster of
presalt finds was made in the
mid-2000s, it lies much closer to
shore and in waters that arent
nearly as deep. The prospect,
dubbed Fortaleza, was made in
roughly 500 ft of water with a
well drilled to a TD of 20,125 ft.
OGX owns 100% of the BM-S-57
block where the Fortaleza find
was made, about 63 mi off the
coast of Rio de Janeiro state.
OGX estimates that its Santos
basin blocks, including BM-S-57,
hold 1.8 Bboe.
Potential unconventional gas
play discovered in Poland
European shale gas firm San Leon Energy has uncovered
a new potential unconventional gas play in Poland,
following completion of drilling at its Siciny-2 well in the
SW Carboniferous basin of Poland. The stratigraphic test
well reached a TD of 11,545 ft after penetrating more
than 3,280 ft of Carboniferous section. A previously
unseen, fourth potential Carboniferous shale section, and
a fractured tight gas sandstone, were also encountered
below 10,500 ft. Tight rock analysis will be performed on
the core to evaluate the potential for commercial shale
gas and tight gas sand production.
ONGC hits two
shallow-water gas
discoveries
Indias Oil and Natural Gas Corp.
(ONGC) has made two shallow-
water gas discoveries offshore
India. Exploratory well Alankari
No. 1, in the KG basin, was drilled
to a depth of 6,273 ft and is pro-
ducing gas at a rate of 5.1 MMcfd.
The second exploratory well, in
the Saurastra basin, reached a
depth of 16,033 ft and produced
gas at a rate of 1.4 MMcfd. ONGC
claims this discovery provides a
significant lead to explore other
sub-basalt Mesozoics in the area.
Statoil,
Exxon nd
natural gas
in Tanzanian
reservoir
Statoil, along with its
partner ExxonMobil, con-
firmed that the Zafarai-1
well in Block 2 offshore
Tanzania has encountered
indications of natural
gas in a good-quality
reservoir. Statoil said that
drilling operations are
ongoing and that it is too early to give any indication of size and commerciality. The well was
spudded in early January 2012, and drilling operations are expected to take up to three months
to complete. The well is being drilled by the drillship Ocean Rig Poseidon, about 50 mi off main-
land Tanzania. It is the first exploration well that has been drilled in the 2,120-sq-mi license.
Petrobras
makes
onshore
Amazon,
ofshore
Franco
discoveries
Brazils Petrobras has discovered a new accumulation
of oil and natural gas in a remote region of the Amazon
rainforest. The discovery was made in the Solimoes basin,
about 25 km from Urucu field that has been producing
for 25 years. Testing showed the well, dubbed Igarape
Chibata East, was capable of producing 1,400 bpd of
light oil and 1.59 MMcfgd. Petrobras holds a 100% stake in
the block. Petrobras also reported that it had completed
drilling its first well at the Franco area in the pre-salt area
of the Santos basin. Results confirm the extension of oil
reservoirs northwest of the discovery well, informally
known as Franco NW, which is situated in a water depth of
6,100 ft, 117 mi offshore Rio de Janeiro.
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ENERGY ISSUES
DR. WILLIAM J. PIKE, EDITORIAL ADVISORY BOARD CHAIRMAN
After several weeks of intense research
in print, broadcast and online media, I
have discovered that hydraulic fracturing
is not a new technology. In fact, it dates to
the beginning of time. Invented by Beel-
zebub himself, it was initially intended to
blow up, poison or otherwise do-in God-
fearing folks worldwide. Its application
to increase oil and gas production was
discovered accidently, eons later, in the
late 1940s. That, of course, only increased
the hideous, deadly potential of fractur-
ing by spreading its use. Now, it appears,
the entire fabric of the planet is at risk. Or,
so one may conclude, after studying the
popular news media.
This view has been refuted by a recent
study of hydraulic fracturing released by
the Energy Institute at The University of
Texas at Austin (http://energy.utexas.
edu). According to the Energy Institute,
The goal of the research is to provide pol-
icymakers with a fact-based foundation
upon which they can formulate rational
regulatory policies that ensure responsible
shale gas development. The report exam-
ines a number of issues related to shale
gas development, including groundwater
contamination, toxicity of fracturing flu-
ids, surface spills, atmospheric emissions,
water use, drilling waste disposal, blow-
outs, and road traffic and noise. A bit more
about these issues later.
Perhaps the most revealing informa-
tionfor those of us in the industry
contained within the report deals not
with HSE issues, but with public percep-
tion. The report analyzes media coverage
of shale gas development in the Marcel-
lus, Haynesville and Barnett shales. The
analysis, while not really news to most
of us, is eye-opening. The report finds
that the tone of media coverage has been
overwhelmingly negative in all forms of
media, by a factor of two-to-one. Much
more revealing are the sources used by
the media. Researchers found that less
than 20% of newspaper articles on hy-
draulic fracturing mention scientific
research related to the issue. Similarly,
only 25% of broadcast news stories ex-
amined made reference to scientific stud-
ies, and only about 33% of online news
coverage mentioned scientific research
on the issue. Pick the word you want
to use hereabsurd, astounding, unac-
ceptable, unprofessional, biased, s$&&y
b#^@*^ds. The one phrase you may not
use, however, is sound journalism.
Now, off the soap box and on to the
meat of the study. First, this is no white-
wash of hydraulic fracturing or oil and gas
operations. Where warts exist, they are
identified. For instance, the study notes
that surface spills of fracturing fluid ap-
pear to pose greater risks to groundwater
sources than does fracturing, itself. There
is no suggestion that the risk of ground-
water contamination does not exist. In
fact, the study notes many reports of
groundwater contamination, most of
them originating from failed casing and/
or cement rather than fracturing.
The study includes key findings
in three areas, groundwater contamina-
tion and other environmental impacts,
regulation of shale gas development and
enforcement of state regulations. With
regard to environmental impacts, in addi-
tion to the two discussed above, research-
ers found:
No evidence of aquifer contamina-
tion from hydraulic fracturing chemi-
cals in the subsurface by fracturing
operations, and observed no leakage
from fracturing at depth.
Methane found in water wells, within
some shale gas areas, can, most likely,
be traced to natural sources, and was
likely present before the onset of shale
gas operations.
Blowouts are a rare occurrence, but
subsurface blowouts appear to be un-
der-reported.
Concerning regulation of shale gas de-
velopment, the study finds that:
Primary regulatory authority for shale
gas is at the state level, and many fed-
eral requirements have been relegated
to the states.
Most state oil and gas regulations were
written well before shale gas develop-
ment became widespread.
Some states have revised regulations
specifically for shale gas development,
with particular focus on three areas of
concern:
Disclosure of hydraulic fracturing
chemicals
Proper casing of wells to prevent
aquifer contamination
Management of wastewater from
flowback and produced water
Gaps remain in the regulation of well
casing and cementing, water with-
drawal and usage, and waste storage
and disposal.
Regulation should focus on the most
urgent issues, such as spill prevention,
which may pose greater risks that hy-
draulic fracturing, itself.
Finally, researchers, who reviewed
state agencies enforcement capabilities,
concluded:
Enforcement capacity is highly vari-
able among the states, particularly
when measured by the ratio of staff to
the number of inspections conducted.
Most violations recorded are of the
type associated with conventional
drilling, rather than being specific to
hydraulic fracturing and shale gas pro-
duction.
Enforcement actions tend to empha-
size surface incidents more than sub-
surface contaminant releases, perhaps
because they are easier to observe.
The Energy Institute strove to create
a non-biased study, actively involving the
Environmental Defense Fund (EDF) in
developing the scope of the work and the
methodology for the study. EDF also re-
viewed the final work products.
WILLIAM.PIKE@CONTR.NETL.DOE.GOV/Bill Pike has 43 years
experience in the upstream oil and gas industry and serves as Chairman
of the World Oil Editorial Advisory Board. He is currently a consultant
with Leonardo Technologies and works under contract in the National
Energy Technology Laboratory (NETL), a division of the US Department
of Energy. His role includes analyzing and supporting NETLs numerous
R&D projects in upstream and carbon sequestration technologies.
Into the fracas
Deliver confident
prospect selections
*
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WHATS NEW IN EXPLORATION
NINA M. RACH, CONTRIBUTING EDITOR
The great Alaska shale rush
In late February 2012, the U.S. Geo-
logical Survey (USGS) issued the first
estimates of technically recoverable on-
shore oil and gas from shales on Alaskas
North Slope, as part of the National Oil
and Gas Assessment Project. USGS finds
there is a maximum potential of 2 Bbbl of
oil and 80 Tcf of gas recoverable from ker-
ogen-rich shales spanning the National
Petroleum Reserve in Alaska. This makes
Alaskan shale oil the second-largest un-
conventional crude resource in the U.S.,
after the Bakken formation in North Da-
kota. Alaskas conventional oil production
in Nov. 2011 was 19.54 MMbbl; natural
gas production was 32.306 Bcf, almost all
of which came from the North Slope.
Methodology. Oil and gas generated
in kerogen-rich rocks that remain trapped
within the original source rock and do
not migrate, are considered continuous
resources. These are large volumes of
rock, pervasively charged with oil or gas,
that do not depend on the buoyancy of oil
or gas in water, and cannot be defined by
down-dip water contacts. In 2005, James
W. Schmoker published a 10-page report,
U.S. Geological Survey Assessment Concepts
for Continuous Petroleum Accumulations,
which describes the fundamental con-
cepts supporting USGS resource assess-
ments of continuous accumulations. The
assessment is limited to the quantity of oil
and gas that can be added to reserves in
approximately one generation, defined as
a forecast span of 30 years.
Stacked source rocks. The recent
USGS study assessed three main source
rocks on the North Slope: Triassic Shub-
lik formation, the lower part of Jurassic-
Lower Cretaceous Kingak shale, and
Cretaceous pebble shale unit-Hue shale,
together called the Brookian shale.
The Shublik formation contains mostly
Type I kerogen (sapropelic, predominantly
algal and highly likely to generate oil) and
Type IIS kerogen (mixed terrestrial and
marineplanktonicthat can generate
waxy oil, with sulfur). Oil that migrates
from the Shublik into conventional ac-
cumulations is low gravity (2339 API)
and contains high (>1.5%) sulfur. Exam-
ples include the Kuparuk River (21-27
API) and Northstar fields (43-45 API).
The Kingak and Brookian shales con-
tain a mixture of Type II and Type III kero-
gen (derived from woody, terrestrial ma-
terial that usually generates gas). Oil that
migrates from these source rocks is high
gravity (3542 API) with low (<0.3%)
sulfur. The Kingak shale is the source of the
high-quality, 45 API oil in the Alpine field.
Proving the concepts. Recent well
tests demonstrate hydrocarbon flow.
The Kemek gas discovery on the eastern
North Slope flowed 12 MMcfd from the
Shublik shale. Production tests of the first
two Gull Island exploration wells, drilled
in 1976 and 1977, flowed at 1,144-2,971
bopd from the Shublik shale. The West
Kuparuk well tests were in the same range.
Several independent exploration com-
panies have amassed significant acreage in
North Slope shales, chiefly Texas-based
Great Bear Petroleum (with an Anchor-
age office), Denver-based Armstrong Oil
& Gas Inc. and San Diego-based Royale
Energy, Inc.
Great Bear Petroleum controls about a
half-million acres with oil and gas shale po-
tential on the North Slope, most of which
were acquired in Alaskas October 2010
North Slope lease sale (99 tracts for $7.7
million). In September 2011, Alaska De-
partment of Natural Resources(ADNRs)
Paul Decker told members of the Alaska
Geological Society that his colleagues jaws
dropped when they saw what Great Bear
was planning.
At the most recent North Slope lease
sale in December 2011, the ADNR Divi-
sion of Oil and Gas announced that Great
Bear Petroleum had 32 winning bids, for
46,000 acres, at a cost of $2.9 million. On
two tracts, Great Bear bid $40.11/acre,
just $0.01/acre more than newcomer
Royale Energy.
As of February 2012, Great Bear plans
to drill four test wells off gravel pads near
the Dalton Highway this winter season.
Armstrong Oil & Gas, bidding as 70
& 148 LLC, dominated two consecutive
North Slope areawide lease sales. In Oc-
tober 2008, the company won 49 tracts
for $4.3 million. In Oct. 2009, it was the
successful bidder on 68 tracts, totaling
$7.6 million. In March 2011, Armstrong
transferred a 70% working interest in all
494,211 acres acquired in the 2008-09
sales to Spains Repsol YPF. The compa-
nies agreed to a broad-reaching explo-
ration and development program, with
drilling set to begin soon. Repsol said in a
press release, The North Slope of Alaska
is an especially promising area as it has
already shown to be oil-rich and carries
low-exploratory risk.
Meanwhile, Armstrong is rebuilding its
acreage position. In the December 2011
sale, the company successfully bid on
an additional 11 tracts, covering 37,000
acres, for $2.15 million. Armstrong holds
107,000 acres on the North Slope.
Royale Energy was high bidder on
the largest total acreage in Alaskas Dec. 7
North Slope lease sale, taking 60 tracts in
three blocks that cover more than 100,000
acres for $2.7 million. Royale is consider-
ing several potential partners, according to
its vice president for exploration and pro-
duction, Dr. Mohamed Abdel-Rahman.
The company plans to drill as many as
six evaluation wells next winter, two on
each of its three lease blocks. Last month,
Abdel-Rahman told the Anchorage Daily
News, The potential reward in Alaska is
huge. No other shale opportunity comes
close to this, not only in the Lower 48, but
also in other parts of the world that we can
access. This is a prime shale play.
LITERATURE CITED
Houseknecht, D.W., et al. 2012, Assessment of potential
oil and gas resources in source rocks of the Alaska
North Slope, 2012: U.S. Geological Survey Fact Sheet
20123013, available online at htp://pubs.usgs.gov/
fs/2012/3013.
NRACH@AUTREVIE.COM/Nina Rach is an energy consultant
with more than 25 years of industry experience. She holds a BS degree
in geological engineering from Cornell University, an MS degree in
geophysics and geology from Duke University, and a law degree from
the University of Houston.
DRILLING ADVANCES
JIM REDDEN, CONTRIBUTING EDITOR
The sultry Louisiana coast, with its
shrimp boats, gumbo and innumerable
oilfield insignias, is about the last place
you would expect icebreakers to be part
of the conversational mix. Yet, later this
month, another chapter will be added to
the ever-growing anthology that is south-
ern Louisianas rich marine heritage when
Shell Exploration and Production takes
possession of a vessel critical to its long-
planned Arctic drilling campaign.
On March 24, Galiano, La.-based ma-
rine transportation giant Edison Chouest
Offshore will deliver the newbuild M/V
Aiviq icebreaker to Shell, which will use
the vessel to support its Beaufort Sea ex-
ploratory drilling program, set to begin
off Alaska during the summer of 2012.
Once turned over to Shell, the $200-mil-
lion, 360-ft Aiviq will officially go into
the archives as the largest vessel ever
constructed by Chouest and one of the
most advanced non-military icebreakers
in use today.
The icebreakers hull was fabricated
at the companys North American Ship-
building yard in Larose, La. and from
there, was moved to the Chouest LaShip
facility in Houma, La. for construction
of the bridge and final assembly. The
Aiviq was designed and built to the Inter-
national Maritime Organizations Polar
Code 3 and the American Bureau of Ship-
pings A3 capabilities. The vessel is rated
for operation in temperatures below a
minimum of -40F and capable of cutting
through at least 3 ft of ice and nearly 8 in.
of snow at a speed of 5 knots. While the
Aiviq was designed specifically for ultra-
harsh weather conditions, it also can work
in Alaska year-round. Its builders say the
icebreaker can accommodate a crew of 65
with quarters that closely resemble those
on a luxury cruise ship.
What may surprise some is that the
Aiviq does not represent an entirely new
chapter in the shipbuilding annals of ei-
ther Louisiana or Chouest. In 2007, the
company built the 300-ft Nanuq ice-class
vessel, also for Shell, which followed the
design and construction of two icebreak-
ers for the National Science Foundation.
The Nanuq is slated to support the opera-
tors Chukchi Sea drilling program, sched-
uled to begin in concert with the Beaufort
campaign. Shell spokesman Curtis Smith
described the Aiviq as a larger and more
advanced version of Nanuq.
Shell believes it finally is on target to
launch its oft-delayed tandem exploratory
drilling programs in Alaskas Beaufort and
Chukchi Seas during the 2012-2013 sum-
mer open water seasons. Id say that were
beyond cautiously optimistic and intend to
begin drilling this year, Smith told World
Oil last month.
Last December, the U.S. Bureau of
Ocean Energy Management condition-
ally approved a revised drilling schedule
that would allow Shell to drill as many as
six wells over two years in the Chukchi
and four over a like period in the Beau-
fort. The Noble Discoverer drillship will be
used in the Chukchi exploratory program,
while the Kulluk conical arctic drilling rig
will operate in the Beaufort.
Shells planned commencement of
well construction activities in the Alas-
kan Outer Continental Shelf (OCS) has
been a long time coming, and for a while,
appeared to be in serious jeopardy. Like
the deepwater Gulf of Mexico, any activ-
ity planned for Alaskan waters under U.S.
jurisdiction came to a screeching halt
with the U.S.-enacted 2010 OCS drilling
moratorium. With the moratorium lifted
and most permits in place, the exploration
program that Shell has long envisioned is
now closer to getting underway.
Smith said the Aiviq will first sail to
Seattle, Wash., and from there will tow
the Kulluk to its first Beaufort Sea drill-
ing location in mid-July. The Aiviq will
work primarily as an anchor-handler, but
since it also was designed to recover up to
10,000 bbl of spilled crude, the new ves-
sel is required to remain on standby as a
contingency, should any incident occur.
Chouest pointed out that the Aiviqs little
sister, Nanuq was designed with oil spill-
response capabilities well before the 2010
Macondo spill in the Gulf of Mexico.
To address the concerns of North
Slope residents, who have expressed fears
that the noise will disturb whales and
other marine life, Smith said earlier that
the Aiviq was designed with the habits of
marine animals in mind. Were being as
proactive as possible in an effort to reduce
our overall sound footprint, he said. Ap-
propriately, Aiviq means walrus in the lan-
guage of the Inupiaq and was named by
a 12-year-old girl in Nuiqsut, Alaska, last
year, who won a Shell-sponsored contest.
The vessel was designed with extra
insulation, hybrid generators and other
noise-reduction equipment to ensure it
operates as quietly as possible. In addi-
tion, the Aiviq, which was built to 2016
U.S. Environmental Protection Agency
(EPA) Tier 4 air emission standards, was
fabricated with double hulls and engi-
neered with other redundancies, such as
dual oil-water separators.
Shell also plans to go beyond the gov-
ernmental caveats it had to meet before
the path was cleared for its Alaskan drill-
ing program. The operator, for instance,
has said that even non-toxic drill cuttings
that otherwise would be legally permis-
sible for on-site discharge in the Beaufort
will be shipped to shore for disposal at ap-
proved sites.
Meanwhile, for the folks of southern
Louisiana, construction of the Aiviq pro-
vided a much needed pick-up for workers
in and around Port Fourchon, La. who
were struggling in the wake of the offshore
drilling moratorium. Chouest said more
than 600 Louisianans were employed dur-
ing the project and Shell estimates another
100 employees will be required to operate
the Aiviq, once it arrives in Alaska.
The storyline here is that this is an
American-made vessel that will work in
U.S. waters, Smith said.
JIMREDDEN@SBCGLOBAL.NET/Jim Redden, a Houston-
based consultant and a journalism graduate of Marshall University,
has more than 37 years experience as a writer, editor and corporate
communicator, primarily focused on the upstream oil and gas industry.
Shrimp boats and icebreakers:
No place but Louisiana
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WHATS NEW IN PRODUCTION
HENRY TERRELL, NEWS EDITOR
Shale gas development and the public mind
Educating trogs and smart idiots
When formulating regulations for an
industry practice, it is best to base your
decisions on (choose one):
A. Public opinion polls.
B. Political expediency.
C. Some stuff I read on the web, and Im
pretty sure its true.
D. Facts.
As the third U.S. President, John Ad-
ams, famously said, Facts are stubborn
things; and whatever may be our wishes,
our inclinations, or the dictates of our
passion, they cannot alter the state of facts
and evidence. He was not speaking about
energy regulations, but he could have
been. This is not to say that scientific facts
are pudgy, immutable things. Scientific re-
search may be modified and reexamined,
and ideas tested and retested, but there is
still objective truth, and thats what were
looking for. Right?
Heres a fact. Public perception is cru-
cially important in developing regulations.
This is especially true today, right now, in
the debate over development of shale hy-
drocarbon resources. What people think is
true is just as important as what is actually
true. If enough of the public believes that
the risks of hydraulic fracturing outweigh
the benefits, then more communities will
turn to severe restrictions or even outright
bans on the technology.
A breath of non-polluted air. An up-
coming report by the University of Tex-
as Energy Institute, hopefully entitled
Fact-based regulation for environmen-
tal protection in shale gas development
(still in draft form) addresses the issue of
public perception clearly and directly.
The report reveals a disturbing trend
in media coverage: the tone of report-
ing on shale gas development, has been
overwhelmingly negative in all forms of
media. Fully two-thirds of all stories on
the subject were deemed negative, and
less than a third were even neutral. This
was true nationally and locally, inside and
outside shale country. The same study
found that only a small minority of sto-
ries and articles carried any mention of
scientific research on the subject. Online
articles were most likely to utilize science,
roughly one-third, but only 20% of news-
papers mentioned any sort of scholarly re-
search. This is really, really sad, but at least
it points a sharp finger at where the focus
should bepublic education. Unfortu-
nately, even when you have the facts on
your side, it doesnt always help that much.
In an article published last month in
AlterNet by author Chris Mooney (writ-
ing on an entirely different subject, but
the idea is the same), he lamented the ex-
istence of the smart idiots effect: The
fact that politically sophisticated or knowl-
edgeable people are often more biased,
and less persuadable, than the ignorant. Its
a reality that generates endless frustration
for many scientistsand indeed, for many
well-educated, reasonable people.
Given the general media slant, and the
general lack of hard information, it is not
surprising that perceptions of hydraulic
fracturing trend from generally negative
to openly hostile. The most common con-
cerns cited by the report center around
groundwater. First, the fracing process
itself will contaminate the aquifer, and
second that methane will subsequently
invade wellwater, leading to the infamous
no smoking near the sink phenomenon.
The Energy Institute studied instances
of reported groundwater contamination
in the Barnett, Marcellus and Haynesville
regions, and reached several significant
conclusions: 1) There was no evidence
of aquifer contamination by the chemi-
cals used in fracing; 2) many instances
of groundwater contamination resulted
from casing/cementing failures in all
types of wells, not especially in hydrauli-
cally fractured ones; 3) methane found
in drinking water was most often attrib-
utable to pre-existing, shallow methane;
and 4) the greatest risk of contamination
from hydraulic fluids is from surface spills.
Regulation and standards in a highly
complex industry should, and do, exist in
abundance. Often, the issues in question
pertain to oil and gas drilling in general.
Most authority falls on the states, some of
which have specific regulations for shale
development and some dont. The Ener-
gy Institute cites a number of regulatory
gaps in some states, particularly in the
areas of well casing and cementing, water
usage, and waste or slickwater storage
and disposal.
Updating regulations. Several initia-
tives are underway from organizations,
such as the national non-profit Groundwa-
ter Protection Council (GWPC) and State
Review of Oil and Natural Gas Regulations
(STRONGER), to help develop and im-
prove state regulation of shale hydrocarbon
development. Recent regulatory revisions
have been concerned with proper casing
and cementing of wells to protect ground-
water, management of wastewater, and dis-
closure of hydraulic fracturing chemicals.
The public needs to understand that
potential hazards are being addressed,
and that industry is fully appreciative of
the real problems, and that efforts should
be most concentrated where there is the
greatest risk, such as surface spills. Most of
all, I think people should understood risks
versus benefits. The best potential for U.S.
energy independence lies in its vast abun-
dance of shale gas, and it is hydraulic frac-
turing that makes this gas abundant.
The temptation when confronted
with illogical arguments and hyperbole
is to start throwing slushballs. This ac-
complishes nothing and reinforces the
oppositions contention that youre a Big
Oil trog. The drilling industry needs to
rely more on studies like this one from in-
dependent organizations like the Energy
Institute, patiently educating and build-
ing consensus. It might seem futile some-
times, but then, theres a lot at stake.
Of course, once you start using sci-
ence to bolster a position, you have to
accept it wont always be your prom
datescience might convince you that
you were wrong sometimes. A risk worth
taking, I think.
HENRY.TERRELL@GULFPUB.COM
A Clearer Image
www.pgs.com
mcmarketing@pgs.com
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Oil or eminent domain?
China and the Spratlys
OIL AND GAS IN THE CAPITALS
JEFF MOORE, CONTRIBUTING EDITOR, ASIA-PACIFIC
Chinas recent blustering about its
ownership of the entire South China Sea
was made by many to be about oil and
gas. Even China, in the midst of war-drum
beating last May, said it was deploying
CNOOCs colossal semi-submersible,
Marine Oil 981, to the Spratly Islands, to
stake its claim as part of a 2020 Deep-
water Daqing strategy. Well, times
changeand quickly, these days. Since
that proclamation, CNOOC, the Chinese
governments global offshore spearhead,
has hardly mentioned Deepwater Daqing,
and CNOOCs E&P activities as of late,
are paying little mind to the Spratlys. So
heres the Chinese E&P view of the issue.
Daqing, means Great Celebration.
It is a northeastern Chinese town in Hei-
longjiang province,
1
famous for produc-
ing massive amounts of oil in the 1960s.
2

Daqing is heralded in Chinese govern-
ment lore as a heroic struggle of the
Ironman oil worker against time and im-
possible weather conditions to produce
enough fuel to save China. At its peak in
1976, says CNPC, Daqing produced 367
MMbbl of oil a year. Government PR says
it was a miracle
3
all due to the work-
ers superhuman efforts and their belief in
Mao Zedongs political philosophy.
Daqing has become a word in Chinese
symbolizing biggest, best and most
productive. And the government has
used this motivational imagery on other
E&P projects such as Offshore Daqing,
4
a series of rigs off the immediate coast
of China, mostly in the Bohai Bay area,
where Beijing wanted to produce 267
MMbbl equivalent (both gas and oil).
And by 2010, it surpassed this goal with
469 MMbbl, earning revenues of RMB
354.8 billion. This was part of CNOOCs
Eleventh Five-year Plan.
5
CNOOC asserts this success would
not have been possible without 1960s-
era Daqing efforts. Well beyond drilling
for the thrill of striking big oil, overcom-
ing technical challenges, and making
profits as Western energy companies
do, CNOOC says Offshore Daqing was
about making [workers] dreams come
true, being ironmen of oil, and securing
Chinas energy future.
6
E&P throughout
Offshore Daqing has been, says CNOOC,
a fiery battlefield.
7
The company, more-
over, proclaimed it is, an epic in our his-
tory and symbolized a magnificent spiri-
tual monument over the deep blue sea.
8

CNOOC said operating the project was
a unique, one-of-a-kind, world historical
event by asserting, China has established
a comprehensive offshore oil industry in
less than 30 years, while most developed
countries took over 100 years.
9
CNOOC declared Offshore Daqing a
great leap forward for Chinas offshore
E&P.
10
This specific terminology comes
from Chinas 1958-61 national develop-
ment under Mao that changed the coun-
try from an agricultural to an industrial-
ized state in but a few years time. And so
it goes with Offshore Daqing. And it says
something revealing about CNOOCit
is not just a tool of the Chinese govern-
ment. It is one of its most valuable de facto
national agencies.
So, when CNOOC announced its Ma-
rine Oil 981 was deploying to the Sprat-
lys in May 2011, in the middle of Chinas
militant wrangling with Vietnam and the
Philippines, it demonstrated not just a
show of Chinese might, but Beijings E&P
intentions, too. This deployment was
supposed to be part of CNOOCs 2020
Deepwater Daqing. And with Deepwater
Daqing comes the biggest. And most
productive. And a heroic great leap for-
ward. And the destiny of China. And a
fiery battlefield.
But none of this has turned out to be
the case, at least for now. CNOOC has
backpedalled. It is not leading a charge into
the southern South China Sea. And it is
no longer tossing around heroic visions of
Deepwater Daqing. In fact, the new head of
CNOOC, Chairman Wang Yilin, isnt even
using the term, at least not right now.
2020 Deepwater Daqing was sup-
posed to be duplicative of Offshore
Daqing with output of 1 MMbopd, but
in deep water off Chinas coast and in
the Spratlys region. However, Reuters
recently reported that China does not
have enough deepwater E&P capability
to produce this amount in ten years20
might be more realistic. According to the
American Bureau of Shipping, China has
but one deepwater well among all of its
assets, the Liwan 3-1 gas field. It is 350
km off the coast of Hong Kong in the
Pearl River Mouth basin, where first pro-
duction is slated for 2013.
11
As for the Spratlys region, Beijing in
2004 allowed PetroChina to conduct
seismic surveys there, but no drilling
has been reported.
12
In August 2011,
CNOOC and two other Chinese com-
panies expressed interest in bidding on
the Philippines blocks off Palawan. This
is the Reed Bank areaRecto Bank to
the Philippinesunder controversy be-
tween Manila and Beijing.
13
And Sino-
pec in November 2011 said the Spratlys
(Nanshas) were ripe for exploration,
signifying Bejings intentions.
14
Overall,
however, thats been it for recent Chi-
nese involvement in this region. Hardly
the big Daqing push.
Because of Chinas great leap mental-
ity, and because it is a de facto dictatorship,
it could easily deploy CNOOC or a like
company to the Spratlys tomorrow, to be-
gin Deepwater Daqing even though Daq-
ing potential there has yet to be proven.
Beijing still believes it owns the entire
southern South China Sea. And this is a
territorial claim. And it is a face issue
both things worth fighting over. So energy
firms still have to worry about Beijing mus-
cling them out of the region over politics,
the same brand of politics that drove Daq-
ing, Offshore Daqing and the currently
non-existent Deepwater Daqing.
WEB EXCLUSIVE: See the complete literature cited
for this article at WorldOil.com.
JMOORE@MUIRANALYTICS.COM/Jeff Moore runs Muir
Analytics, a risk consulting firm specializing in deciphering threats in
conflict zones. He is author of the book Spies for Nimitz, which depicts
Americas first modern intelligence agency. He has a PhD from the
University of Exeter in the UK.
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Too many variables, too little time
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EXECUTIVE VIEWPOINT
SUDHIR VASUDEVA, CHAIRMAN AND MANAGING DIRECTOR
OIL AND NATURAL GAS CORPORATION (ONGC)
A variety of factors contribute to the
price of gasoline in the United States. These
factors include worldwide supply, demand,
competition for crude oil, taxes, regional dif-
ferences in access to gasoline supplies, and
environmental regulations.
Gary Miller
Mr. Miller neglected to mention spec-
ulation in oil futures, geopolitical risk,
technology premium, pressures from
competing fuels and the so-called soft
issues, such as human rights, ethical la-
bor practices, responsible investment and
anti-corruption, as a few more factors that
contribute to the mix. Clearly, the caul-
dron producing oil and gas is simmering
with a rich variety of ingredients that
determine the final broth. So how then
does one take a gambit on the future
while firmly rooted in the present?
One way is to look into the past, deter-
mine a trend and then use it to prognos-
ticate the future. Another is to use com-
plex algorithms that enable modeling of a
problem with a variety of inputs that pro-
duce a probability-based outcome. This
needs a lot of number crunching, yes; but
no sweat, we now have supercomputers,
so problem solved. Another concept uses
fuzzy logic; I am not quite sure how this
works, but its there, if one wishes to use
it. Then, finally, there is the oracle, a la
matrix revolutions, as the final recourse.
Each one of these models of forecast-
ing the future operates under caveats and
has a list of however, if, else, thereaf-
ter and therefore attached to it. Grant-
ing the practitioners of these forecasting
tools the intellectual license and serious-
ness of their enterprise, the apex manager
of an oil and gas company nevertheless
dwells in a miasma of half-truths, nebular
information, unpredictable outcomes and
confusing options. Yet, he must take a de-
cision today that will have repercussions
well into the future. Let me illustrate this
perspective with only one example.
Shale gas is big in the U.S., and global
shale gas reserves are estimated to be of
the order of 5,760 Tcf in 32 countries, ex-
cluding the U.S. So lets all get into shale
gas then? Surely, if it worked in the U.S.,
it would work elsewhere, as well. Well,
not quite. Let us examine a few attendant
issues. Are large tracts of barren, flat land
available, below which shale gas deposits
lie? Who owns the natural resources below
these lands? Is it the owner of the land or
the state? If it is the state, is it the local or
the federal government that controls these
rights? Are large reservoirs of water avail-
able in the vicinity for hydro fracturing? If
not, where is the water to come from? How
is the effluent to be handled, as per the pre-
vailing environmental law? If local laws are
lax, do we still need to comply with inter-
national best standards? Are service pro-
viders available locally to render support?
If no, are they available globally and at af-
fordable rates? Will the gas produced have
an assured market with stable prices? Are
our reservoirs similar to the ones in the
U.S. and if they are different, how much
so? Will the reservoir behave as predicted,
so that a stable supply is assured?
We are yet to build a decision tree for
all the ifs discussed above, but be as-
sured that it will run into reams of paper.
No wonder then, that apart from the U.S.
and Canada, other countries with shale
gas deposits are still in the contemplat-
ing zone.
Illustrative, as it is, apex managers in
the oil and gas space routinely handle
these issues. That the hydrocarbon busi-
ness per se is inherently risky is a given, but
so substantial are the payoffs that such risk
is acceptable. The question that begs an
answer is, are apex managers of oil and gas
companies super managers with an un-
canny ability to navigate through a maze of
nebular boundaries? I would like to say yes
and pat myself on the back, as well. But,
while such affirmation would be largely
untrue and self-congratulatory, it does il-
lustrate the difficulty level that an oil and
gas company head routinely manages.
Typical strategies to hedge risk on ac-
count of these factors have been to enter
relatively stable businesses and integrate
vertically and horizontally so as to even-off
business cycles. However, most of us have
realized that one can be good at only one
thing and that it is better to invest more
and more in learning more and more about
it so that less and less of it remains in the
realm of the unknown. Let us call this su-
per-specialization. This takes years, sus-
tained and focused effort and substantial
investment, but has commensurate pay-
offs. Petrobras investment into deepwater
technology, and its management, is pay-
ing the firm rich dividends in monetizing
its presalt discoveries and prising access
to deepwater reserves overseas. Statoils
focus on deepwater and subsea comple-
tion systems and its expertise in CCS is
yet another example of focused strategies
adopted by national oil companies. Cairn
Energy, with its exploration focus, finds oil
in places abandoned by others.
We too, in ONGC, are going through
this phase of developing focused strate-
gies. Our rich experience in monetizing
onshore and shallow-water exploration
and exploitation is well established; but
the era of easy oil traditionally found in
these domains seems to be over. In this
prevailing regime of exigent hydrocar-
bons, deep and ultradeep, arctic explora-
tion, and unconventional oil and gas, we
will have to develop a focus and invest
substantially to build up world-class ca-
pability. Deep water is one such domain,
and in the near term, we intend to focus
on this area, as well as subsea completions,
even in our shallow-water developments.
Our efforts toward monetizing unconven-
tional gas reserves are yet in the R&D/
pilot stages. As we proceed further on the
experience curve, we will surely develop a
focus and invest in it aggressively.
SUDHIR VASUDEVA/Chairman & Managing Director of Oil
and Natural Gas Corporation Ltd. (ONGC) has over three-and-half
decades of experience in the entire range of upstream oil and gas
business. A Gold Medalist chemical engineering graduate, he is
credited with many path-breaking initiatives in complex offshore
project management for which he has been conferred with the coveted
CEPM-PMA Fellowship on project management.
we are the people
of Baker Hughes.
and we leave
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www.bakerhughes.com
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Roger helps ensure awless execution in
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2012 Baker Hughes Incorporated. All Rights Reserved. 31746
Find out more at
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INNOVATIVE THINKERS
Harry Smith
Te journey to 83
well logging patents

As the inventor of over 80 well log-
ging-related U.S. Patents, covering car-
bon oxygen and pulsed neutron capture
logging tools, as well as several other
logging technologies, and most recently,
nonradioactive tracers, Harry Smithe ca-
reer is anything but conventional. As the
former Director of Research at Hallibur-
ton Energy Services, and current owner
of Harry D. Smith Consulting, Smiths
adventure in the oil and gas business be-
gan in a most unusual placeHoustons
Shamrock Hilton Hotel swimming pool.
After earning his BS and MS degrees in
physics from Georgia Tech and working
with computer radiation modeling pro-
grams at the U.S. Armys Edgewood Ar-
senal, Smith unexpectedly got introduced
to offshore oil operations. While working
for the U.S. Navy Mine Defense Labora-
tory in Florida, Smiths group was analyz-
ing acoustic signals onshore from seismic
vessels in the Gulf of Mexico. We actually
went out to a couple of oil rigs on Navy
boats, said Smith. So I had some early,
sketchy interaction with the oil industry.
In 1969, Smith interviewed for a posi-
tion with Texaco in Houston, where he
stayed at the legendary Shamrock Hilton
Hotel and witnessed a live water skiing
exhibitionin the hotels 165-by-142-ft
swimming pool. These people are doing
things that clearly arent being done other
places, Smith said. It wasnt oil-related,
it just focused me that I really wanted to
be in Houston.
Smith joined Texacos Bellaire Re-
search Center in Houston and began
work on developing the companys car-
bon/oxygen (C/O) logging technology.
Remembering his experience in simulat-
ing radiation effects for the Army, Smith
got the idea of incorporating large radio-
activity modeling programs in develop-
ing C/O logs.
In 1978, Smith joined Halliburtons
Welex division as senior research physicist.
While other service companies had pulsed
neutron capture logging tools that utilized
a method that required waiting for the neu-
trons thermalized in the borehole to decay
before they could accurately measure the
formation properties, Smith visualized a
new way to process the data. My idea was,
why do you want to wait? Why not just
measure and analyze both the borehole
and formation neutron decay signals, sepa-
rate them, and thus simultaneously make a
better formation measurement, as well as a
new borehole measurement?, he said.
In 1995, he was appointed director
of Halliburtons Houston Technology
Center and managed a team of over 400
people in developing wireline logging,
logging-while-drilling, and downhole
tool technologies.
Smith, the first person in the internation-
al well logging society (SPWLA) to have
received their top two technical achieve-
ment awards, including the Gold Medal in
1997, took his early retirement from Halli-
burton at the age of 62. During the last six
years, under Harry D. Smith Consulting,
Smith has evaluated nascent oilfield-related
technologies and companies, and their as-
sociated intellectual property.
Currently, in conjunction with CARBO
Ceramics, he is developing a novel prop-
pant incorporating a thermal neutron
absorber, which can be detected by con-
ventional neutron and/or pulsed neutron
logging tools.
Whereas Smiths first patent in the
1970s received a registry number in the
three-millions, his latest patent, issued in
January 2012, was awarded a number in the
eight-millions. The U.S. has issued more
patents throughout the time Ive been
working than it did in all the time before
I started my career. It shows you how ex-
ponentially technology is growing, Smith
said. Ive come up with a lot of bad ideas as
well as good ones, but Im not vain enough
to think that everything I come up with is
good. Ive just been fortunate enough to
make some of the good ideas work.
WEB EXCLUSIVE: Go to WorldOil.com for an ex-
panded version of this column.
NELL.LUKOSAVICH@WORLDOIL.COM
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INDUSTRY AT A GLANCE
45
50
55
60
65
70
75
$2
$3
$4
$5
$6
$7
$8
Monthly price (Henry Hub)
12-month price avg.
Production
J D N O S A J J M A M F J D N O S A J J M A M F J
Source: EIA
2012 2010 2011
45
60
75
90
105
120
135
W. Texas Inter.
Brent Blend
Arabian Light
J D N O S A J J M A M F J D N O S A J J M A M F J
Source: DOE
2010 2011 2012
SELECTED WORLD OIL PRICES ($/BBL)
U.S. GAS PRICES ($/MCF) & PRODUCTION (BCFD)
WORLD OIL & NGL PRODUCTION Million barrels per day
JAN DEC
2012 2011 AVG. 2011 AVG. 2010
OPECCRUDE OIL
1

Saudi Arabia 9.55 9.55 9.05 8.13
Iran 3.45 3.45 3.58 3.70
Iraq 2.65 2.69 2.67 2.36
United Arab Emirates 2.58 2.58 2.50 2.31
Kuwait 2.26 2.30 2.21 2.03
Neutral Zone 0.60 0.60 0.59 0.53
Qatar 0.82 0.82 0.82 0.80
Angola 1.73 1.75 1.64 1.73
Nigeria 2.04 2.06 2.18 2.08
Libya 0.98 0.75 0.46 1.55
Algeria 1.29 1.29 1.28 1.25
Ecuador 0.48 0.48 0.50 0.47
Venezuela 2.48 2.50 2.52 2.53
NGLs & condensate 6.14 5.91 5.78 5.34
TOTAL OPEC 37.04 36.72 35.77 34.83
OECD
1

US 8.25 8.43 8.10 7.77
Mexico 2.91 2.91 2.94 2.96
Canada 3.83 3.70 3.50 3.37
United Kingdom 1.15 1.21 1.12 1.36
Norway 2.03 2.00 2.03 2.14
Europe-others 0.67 0.65 0.67 0.65
Australia 0.47 0.51 0.43 0.51
Pacific-others 0.09 0.09 0.09 0.10
TOTAL OECD 19.39 19.49 18.89 18.86
NONOECD
Russia 10.68 10.63 10.58 10.45
FSU-others 3.10 3.05 3.04 3.10
China 4.13 4.18 4.13 4.10
Malaysia 0.64 0.63 0.65 0.72
India 0.92 0.94 0.90 0.86
Indonesia 0.89 0.90 0.91 0.97
Asia-others 1.12 1.11 1.08 1.14
Europe 0.14 0.14 0.14 0.14
Brazil 2.31 2.30 2.19 2.14
Argentina 0.62 0.68 0.67 0.69
Colombia 0.93 0.93 0.91 0.79
Latin America-others 0.44 0.44 0.44 0.45
Oman 0.88 0.89 0.89 0.87
Syria 0.28 0.26 0.33 0.39
Yemen 0.18 0.18 0.23 0.30
Egypt 0.69 0.68 0.69 0.70
Gabon 0.25 0.25 0.24 0.25
Africa/Middle East-others 1.72 1.76 1.79 1.77
TOTAL NONOECD 29.91 29.95 29.81 29.82
PROCESSING GAINS
2
2.28 2.23 2.17 2.10
TOTAL SUPPLY 88.62 88.39 86.64 85.60
Source: International Energy Agency Note: Totals and subtotals may not add, due to rounding.
1
Comprises crude oil, condensates, NGLs and oil from unconventional sources.
2
Net of volumetric gains and losses in refining (excludes net gain/loss in China and nonOECD Europe) and marine
transportation losses.
U.S. OIL PRODUCTION
1
Thousand barrels per day
JAN JAN DEC
STATE 2012
2
2011
3
% DIFF. 2011
2
Alabama 20 20 0.0 20
Alaska 622 464 34.1 625
Arkansas 17 16 6.3 17
California 572 612 6.5 572
Colorado 75 75 0.0 70
Florida 5 6 16.7 5
Illinois 21 24 12.5 21
Kansas 102 111 8.1 102
Kentucky 2 6 66.7 2
Louisiana 1,155 1,432 19.3 1,108
Michigan 10 18 44.4 10
Mississippi 63 65 3.1 63
Montana 59 64 7.8 59
Nebraska 6 6 0.0 6
New Mexico 152 185 17.8 152
North Dakota 435 341 27.6 404
Ohio 14 16 12.5 14
Oklahoma 190 197 3.6 190
Texas 1,772 1,562 13.4 1,753
Utah 72 69 4.3 72
Wyoming 147 146 0.7 146
Others
4
23 27 14.8 23
TOTAL US 5,534 5,462 1.3 5,434
LOWER 48 4,912 4,998 1.7 4,809
Note: Totals may not add, due to rounding.
3
DOEs revision as of 10 months from current issue date.
1
Includes lease condensate.
4
Includes Arizona, Indiana, Missouri, Nevada, New York,
2
APIs current estimate. Pennsylvania, South Dakota, Tennessee, Virginia and West Virginia.
Oil prices were mixed in January, with a generally weak
economy and uncertainty in Europe offset by an improving eco-
nomic outlook in the U.S. This, combined with tensions in Iran,
kept global prices rising. Arabian Light rose to average almost
$114/bbl, and West Texas Intermediate settled above $100/bbl.
In sharp contrast, natural gas prices in the U.S. fell yet again to
an abysmal $2.51/Mcf, reflecting an abnormally warm winter in
the states. Gas production fell slightly but remained robust. The
international rotary rig count continued to rise in January, while
the U.S. count stayed strong at just over 2,000 rigs running.
Access 2012 projections and trends, and 2011 statistics and
historical data for drilling, production and reserves, in one
comprehensive industry report. Price $1,495
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FORECAST &
DATA BOOK 2012
FORECAST &
DATA BOOK 2012
Projections and
Historical Statistics
for Worldwide
Drilling, Production
and Reserves
WorldOil.com
WORLD OIL
NOW AVAILABLE
INDUSTRY AT A GLANCE
WORKOVER RIG COUNT
JAN DEC NOV JAN % chng % chng
REGION 2012 2011 2011 2011 mo. a go yr a go
Texas Gulf Coast 233 227 188 158 2.6 47.5
ArkLaTex 151 156 139 129 -3.2 17.1
Eastern US 101 103 109 94 -1.9 7.4
South Louisiana 27 22 23 25 22.7 8.0
Mid-Continent 245 254 325 358 -3.5 -31.6
West Texas / Permian 701 684 629 571 2.5 22.8
Rocky Mountains 356 349 346 305 2.0 16.7
West Coast / Alaska 340 336 341 343 -1.5 -0.9
TOTAL U.S. 2,154 2,131 2,100 1,983 1.1 8.6
CANADA 718 711 732 709 1.0 1.3
Source: Cameron Note: Totals may not add, due to rounding.
Source: Baker Hughes
INTERNATIONAL ROTARY
DRILLING RIGS
2011
2012
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
D N O S A J J M A M F J 800
1,050
1,300
1,550
1,800
2,050
2,300
D N O S A J J M A M F J
2011
2012
U.S. ROTARY
DRILLING RIGS
INTERNATIONAL ROTARY RIG COUNT Monthly average
JAN 2012 DEC 2011 JAN 2011
REGION & COUNTRY Land Offshore Land Offshore Land Offshore
CANADA 577 1 480 1 562 3
EUROPE 51 37 46 41 51 53
Germany 7 0 5 0 7 0
Italy 3 1 2 2 5 1
Netherlands 1 4 0 4 2 5
Norway 0 14 0 10 0 23
Poland 10 0 11 0 6 1
Romania 11 0 10 0 14 0
United Kingdom 2 11 2 14 2 21
Others 17 7 16 11 15 2
MIDDLE EAST* 211 34 217 29 186 21
Abu Dhabi 13 7 13 6 8 3
Oman 50 1 49 1 43 0
Saudi Arabia 60 17 62 14 51 8
Syria 27 0 27 0 31 0
Turkey 20 0 24 1 12 1
Others 41 9 42 7 41 9
AFRICA* 102 48 106 44 115 31
Algeria 28 0 33 0 32 0
Egypt 58 14 58 13 51 9
Libya 0 0 0 0 14 1
Nigeria 5 14 5 12 7 7
Others 11 20 10 19 11 14
LATIN AMERICA 334 86 349 89 327 76
Argentina 51 0 64 0 67 0
Brazil 36 48 37 49 36 39
Colombia 70 0 75 0 54 0
Mexico 79 20 80 25 61 18
Venezuela 64 13 59 10 79 15
Others 34 5 34 5 30 4
ASIA-PACIFIC 166 102 163 96 174 127
Australia 7 5 8 6 5 9
China, offshore 0 22 0 24 0 32
India 86 31 86 31 83 32
Indonesia 42 15 40 13 47 16
Malaysia 0 11 1 7 0 9
Myanmar 1 0 1 0 2 0
Pakistan 14 0 12 0 15 0
Thailand 4 12 4 7 3 9
Vietnam 0 4 0 5 0 15
Others 12 2 11 3 19 5
TOTAL 1,441 308 1,361 300 1,415 311
Source: Baker Hughes *No data available for Iraq, Iran or Sudan.
Note: Totals may not add, due to rounding.
U.S. ROTARY RIG COUNT Monthly average
% DIFF.
JAN DEC JAN JAN 12
STATE & AREA 2012 2011 2011 JAN 11
ALABAMA-TOTAL 6 4 7 -14.3
Land 5 4 7 -28.6
Inland water 1 1 0 #DIV/0!
Offshore 0 0 0 #DIV/0!
ALASKA-TOTAL 8 8 5 60.0
Land 8 7 5 60.0
ARKANSAS 33 35 37 -10.8
CALIFORNIA-TOTAL 46 50 40 15.0
Land 46 49 40 15.0
COLORADO 73 79 63 15.9
FLORIDA 1 2 2 -50.0
KANSAS 32 32 26 23.1
KENTUCKY 2 5 5 -60.0
LOUISIANA-TOTAL 147 150 169 -13.0
North - Land 65 73 119 -45.4
South - Inl. water 15 17 14 7.1
South - Land 29 25 15 93.3
Offshore 38 36 22 72.7
MICHIGAN 1 1 1 0.0
MISSISSIPPI 11 11 8 37.5
MONTANA 16 12 8 100.0
NEBRASKA 1 1 1 0.0
NEVADA 1 1 5 -80.0
NEW MEXICO 81 78 73 11.0
NEW YORK 0 0 0 #DIV/0!
NORTH DAKOTA 183 186 154 18.8
OHIO 15 14 9 66.7
OKLAHOMA 195 197 166 17.5
PENNSYLVANIA 114 110 103 10.7
SOUTH DAKOTA 1 1 0 #DIV/0!
TENNESSEE 0 0 0 #DIV/0!
TEXAS-TOTAL 923 911 736 25.4
Offshore 4 3 4 0.0
Inland water 0 0 1 -100.0
District 1 127 126 61 108.2
District 2 83 78 48 72.9
District 3 38 41 43 -11.6
District 4 53 48 46 15.2
District 5 52 54 75 -30.7
District 6 55 52 57 -3.5
District 7B 14 16 7 100.0
District 7C 75 77 59 27.1
District 8 282 285 204 38.2
District 8A 41 42 25 64.0
District 9 29 28 37 -21.6
District 10 73 63 70 4.3
UTAH 34 29 25 36.0
W. VIRGINIA 27 27 20 35.0
WYOMING 50 54 47 6.4
OTHERS 3 5 3 0.0
U.S. OFFSHORE TOTAL 43 42 26 65.4
U.S. GRAND TOTAL 2,003 2,002 1,711 17.1
Source: Baker Hughes Note: Totals may not add, due to rounding.
INTERNATIONAL OFFSHORE RIGS
US GULF OF MEXICO EUROPE/MEDITERRANEAN WORLDWIDE
JANUARY 2012 Mobile Platform* Mobile Platform* Mobile Platform*
Total rigs in fleet 116 50 119 107 827 297
year ago 128 51 115 107 792 298
Contracted rigs, 70 24 108 104 669 247
year ago 62 24 92 104 574 244
Rig utilization, %, 60.3 48.0 90.8 97.2 80.9 83.2
year ago 48.4 47.1 80.0 97.2 72.5 81.9
Source: Offshore Data Services Weekly Mobile Offshore Rig Count *Updated quarterly.
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The Evolution
high-performance, water-based uids system is ready for your most extreme

challenges no matter where they are. Proven in more than 600 wells of North Americas harshest
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Wherever in the universe you explore, let Newpark Drilling Fluids help you evolve in unexpected ways.
Learn more at www.newparkdf.com/evolution.
EVOLUTION IS A REGISTERED TRADEMARK OF NEWPARK DRILLING FLUIDS LLC IN THE UNITED STATES. THE EVOLUTION TRADEMARK MAY ALSO BE REGISTERED IN OTHER COUNTRIES.
THE HIGH-PERFORMANCE,
WATER-BASED FLUIDS SYSTEM
READY FOR
THE NEXT
FRONTIER.
OFFSHORE RIG ACTIVITY
WORLDOIL.COM/RIGSTAR
An online information system providing access to up to 300 data points
for more than 950 mobile offshore rigs and their equipment / www.WorldOil.com/Rigstar
RECENTLY ORDERED RIGS
EXPECTED DATE MAX. WATER MAX. DRILLING
RIG TYPE RIG NAME RIG OWNER SHIPYARD OF DELIVERY DEPTH, FT DEPTH, FT
Drillship Sete Unnamed Drillship No. 8 Sete Brasil Jurong Aracruz 2Q 2015 10,000 40,000
Jackup Safin Unnamed Jackup Safin Gulf PPL Shipyard Nov. 2012 400 35,000
Semisubmersible Odfjell Unnamed Semi Odfjell Drilling Daewoo 2H 2014 10,000 37,500
RECENTLY DELIVERED RIGS
DATE MAX. WATER MAX. DRILLING
RIG TYPE RIG NAME RIG OWNER SHIPYARD DELIVERED DEPTH, FT DEPTH, FT
Drillship ENSCO DS-6 Ensco Samsung Jan. 13, 2012 12,000 40,000
Drillship Noble Bully II Noble Corp. Keppel FELS Dec. 2011 8,200 40,000
Drillship Noble Globetrotter I Noble Corp. STX Dec. 2011 10,000 40,000
Jackup Transocean Honor Transocean PPL Shipyard Nov. 30, 2011 400 30,000
Semisubmersible West Capricorn Seadrill Jurong Dec. 22, 2011 10,000 35,000
UPCOMING RIG CONTRACTS
RIG NAME RIG OWNER OPERATOR LOCATION CONTRACT START CONTRACT END DAYRATE, US$
Barges
Hercules 17 Hercules Offshore TPIC US GOM March 16, 2012 March 29, 2012 22,000
Hercules 49 Hercules Offshore Square Mile US GOM March 8, 2012 April 11, 2012 21,000
Drillships
West Navigator Seadrill Shell Norway Jan. 1, 2013 June 30, 2014 595,000
Jackups
Atwood Beacon Atwood Oceanics Shemen Israel Sept. 1, 2012 Feb. 28, 2013 151,000
ENSCO 92 Ensco Tullow UK Nov. 1, 2012 Jan. 31, 2013 132,500
GSF Monarch Transocean Maersk Oil Denmark July 1, 2012 July 31, 2012 92,000
Hercules 204 Hercules Offshore Castex US GOM June 19, 2012 Aug. 27, 2012 58,000
Hercules 264 Hercules Offshore Hall-Houston US GOM April 26, 2012 July 4, 2012 80,000
Offshore Mischief Seadrill Equion Energia Colombia March 16, 2012 Sept. 15, 2012 185,000
Ralph Coffman Rowan BG Egypt Sept. 1, 2012 Sept. 30, 2014 225,000
Rowan Norway Rowan ConocoPhillips Norway Jan. 1, 2013 June 30, 2016 352,500
West Leda Seadrill ExxonMobil Malaysia March 26, 2012 Sept. 25, 2013 138,000
Semisubmersibles
Borgsten Dolphin Fred Olsen Energy Total UK Nov. 16, 2012 Feb. 29, 2016 202,000
ENSCO 8506 Ensco Anadarko US GOM 4Q 2012 2Q 2015 530,000
GSF Arctic I Transocean Vanco Brazil May 1, 2012 Jan. 31, 2013 270,000
Leiv Eiriksson DryShips Inc. Rig Management Norway Norway Jan. 1, 2013 Dec. 31, 2016 610,000
Noble Jim Day Noble Corp. Deep Gulf US GOM April 16, 2012 May 25, 2012 550,000
Ocean Confidence Diamond Offshore Murphy Oil Congo May 26, 2012 Aug. 25, 2012 390,000
Ocean Endeavor Diamond Offshore Burullus Egypt May 6, 2012 Aug. 31, 2012 285,000
Odfjell Unnamed Semi Odfjell Drilling BP West of Shetland 4Q 2014 3Q 2021 470,000
Sedco 704 Transocean Sterling Resources UK March 16, 2012 April 15, 2012 270,000
West Aquarius Seadrill ExxonMobil Canada June 16, 2013 June 15, 2015 530,000
STARTED NEW CONTRACTS
RIG NAME RIG OWNER OPERATOR LOCATION CONTRACT START CONTRACT END DAYRATE, US$
Barges
OES Passion Oando Energy Services Shell Nigeria Feb. 6, 2012 Feb. 5, 2014 104,900
Drillships
Noble Bully I Noble Corp. Shell US GOM Feb. 16, 2012 Feb. 15, 2017 469,000
Pacific Scirocco Pacific Drilling Total Nigeria Dec. 31, 2011 Dec. 30, 2012 548,000
Jackups
Arch Rowan Rowan Saudi Aramco Saudi Arabia Feb. 16, 2012 Nov. 30, 2014 82,500
ENSCO 92 Ensco RWE Dea UK Feb. 1, 2012 Oct. 31, 2012 87,500
Hercules 201 Hercules Offshore Stone Energy US GOM Feb. 22, 2012 July 12, 2012 58,000
Hercules 213 Hercules Offshore EPL US GOM Jan. 21, 2012 July 7, 2012 55,000
Noble Gene Rosser Noble Corp. Pemex Mexico Feb. 26, 2012 June 30, 2013 81,000
Ocean Columbia Diamond Offshore Marlin Energy US GOM Jan. 26, 2012 March 31, 2012 62,500
Offshore Courageous Seadrill Shell Malaysia Jan. 16, 2012 Jan. 15, 2013 134,500
Rowan Gorilla IV Rowan Walter Oil & Gas US GOM Feb. 16, 2012 June 30, 2012 125,000
West Prospero Seadrill Vietsovpetro Vietnam Jan. 1, 2012 Dec. 31, 2012 129,000
Semisubmersibles
Atwood Eagle Atwood Oceanics BHP Billiton Australia Feb. 1, 2012 March 31, 2012 376,000
GSF Rig 135 Transocean NPDC Nigeria Feb. 16, 2012 March 31, 2012 260,000
Leiv Eiriksson Dryships Inc. Borders & Southern Falkland Islands Jan. 31, 2012 July 31, 2012 350,000
Noble Jim Day Noble Corp. Shell US GOM Feb. 6, 2012 April 15, 2012 530,000
Ocean Rover Diamond Offshore Murphy Oil Malaysia Jan. 26, 2012 April 30, 2012 450,000
Ocean Saratoga Diamond Offshore CGX Energy Guyana Jan. 26, 2012 March 31, 2012 282,150
Transocean Legend Transocean ConocoPhillips Australia Feb. 1, 2012 March 31, 2013 293,000
West Phoenix North Atlantic Drilling Total UK Jan. 16, 2012 Jan. 31, 2015 445,000
Source: RigStar, World Oils Offshore Rig Database
Fiber-optic coiled tubing logging improves reliability
of water shut-of in Saudi oil well
SPECIAL FOCUS: COILED TUBING TECHNOLOGY
Worlds rst application of
ber-optic CT logging in an
openhole completion for
an oil well in Saudi Arabia
enabled accurate evaluation
of well conditions, depth
control and monitoring
bottomhole parameters, to
allow proper placement of
WSO uids into the target
zone and isolate water
producing intervals.
JORGE DUARTE OLARTE, SURAJIT
HALDAR, RIFAT SAID, Saudi Aramco; ANTON
BUROV, WASSIM KHARRAT, JOHN STUKER,
Schlumberger
Fiber-optic enabled coiled tubing
operation underway in the southern region
of Saudi Arabia.
Oil wells in the south of Saudi Arabia
are mostly horizontal openhole (OH)
completions. Some of these wells are
dead or on intermittent production due
to high water cut, owing to the influx
of water through fissures or fractures.
Overcoming this problem requires water
shut-off (WSO), typically performed us-
ing mechanical and/or chemical barriers
in the wellbore and/or reservoir. The
WSO candidate well selection process
starts with the evaluation of reservoir and
production data, typically followed by a
coiled tubing (CT) logging run to identi-
fy the water source and to help design the
placement, formulation and volume of re-
quired isolating fluids. Water-producing
zones can either be permanently isolated
or shut-off temporarily while acid stimu-
lation is applied to oil-producing zones.
During 20052010, several attempts
were made using inflatable packersde-
ployed using CTas a cement retainer
and/or bridge plug to mechanically isolate
unwanted zones. Consequently, when set
in OH zones with excessive ovality and/or
wash-out, the expansion capabilities of the
packers were often found to be insufficient
to achieve adequate isolation. Therefore,
accurate depth and X-Y caliper measure-
ments are key parameters for effective
WSO treatment in an OH completion.
Conventional CT systems measure depth,
based on the length of CT in-hole, while
bottomhole information, such as pressure
and tension/compression, are calculated
from surface information. Such systems
can introduce inaccuracies in downhole
monitoring and control that reduce the ef-
fectiveness of the WSO treatment, result-
ing in higher water cut than could other-
wise be achieved.
A fiber-optic enabled coiled tubing
(FOECT) system has been utilized to
provide reliable, real-time, bottomhole
data measurements that have enabled
more accurate packer setting depth, ad-
equate inflation within packer limitations,
and optimization of cement design and in-
jection. The new approach has improved
the accuracy of completion engineering
through the entire WSO design-execu-
tion-evaluation process, and has delivered
a higher success rate for the treatment.
FIBER-OPTIC ENABLED COILED
TUBING TECHNOLOGY
The FOECT system includes a fi-
ber-optic (FO) cable installed inside a
CT string, a FO bottomhole assembly
(FOBHA), surface electronics and soft-
ware. The FO cable (Fig. 1) is light
about 1/20 the weight of an equivalent
electric cableand can withstand corro-
sive bottomhole conditions and temper-
atures up to 300F. It is installed within
a 1.8-mm (0.071-in.) outside diameter
(OD) carrier, making it nonintrusive to
the CT internal diameter (ID), so CT
operations normally done with conven-
tional stringssuch as pumping corro-
sive fluids or dropping ballscan still be
performed.
The FO cable, itself, provides reli-
able, accurate, real-time distributed tem-
perature sensing (DTS) measurements
throughout the length of the CT, and
it does not require calibration prior to
running in a well. During typical opera-
tion of the FOECT system, downhole
data are transmitted from the working
reel via wireless communication to the
CT control cabin, where the monitoring
system and specialized software collect,
display, monitor and record real-time
job parameters. The surface acquisition
system can also communicate with, and
send commands to, the downhole tool.
Fig. 2. Well-A
production prole
and hole survey
Holdup
Flowing
TVD
X,010 X,545 ft
Flowing
TVD
X,010 X,545 ft
Holdup
Shut-in
TVD
X,010 X,545 ft
Oil
MD1:X,600ft
Oil Oil
Water
OGM-459
Well Sket Water Water
X,300
X,400
X,500
X,600
X,700
X,800
X,900
X,000
X,100
X,200
X,300
X,400
X,500
X,600
X,700
X,800
X,900
X,000
X,100
X,200
X,300
X,400
Fig. 1. Schematic of the ber-optic cable
carrier in a section of coiled tubing.
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The FOECT system provides real-time
downhole measurements of:
X-Y caliper to evaluate OH geometry
and conditions, and determine opti-
mum target depths to set inflatable
packers
Casing collar locator (CCL) and gam-
ma ray (GR), enabling accurate depth
control for packer setting
Bottomhole pressure (BHP) inside
and outside the CT string, enabling
proper inflation of the packer and
eliminating the risk of exceeding its
operating limitations during the injec-
tion of WSO fluids
Tension/compression (TC) forces to
confirm adequate packer setting and
disconnect
Bottomhole temperature (BHT) out-
side the CT string, enabling adjust-
ment of the cement formulation and
aiding the design of any other required
WSO fluids.
The FOECT X-Y caliper tool trans-
mits real-time downhole measurements,
which previously required a separate
wireline logging job, from a conventional
X-Y caliper attached to the head of the CT
string. It is powered by a lithium battery
with more than 72-hr operating duration.
The FOECT TC module has a 2-in.
OD and can handle up to 2 bpm pumped
through it. The tool can measure tension,
compression and torque loads.
CASE STUDY: WELL-A
Well-A has a 6-in. OH horizontal
section from 7,387 ft to a total depth
of 9,950 ft, Fig. 2. Water cut increased
in early 2004 with a simultaneous de-
crease in oil production. A production
test prior to WSO treatment indicated
43.9% water cut. Production logging in
2005, after initial WSO treatment, indi-
cated 29.6% water cut, with most of the
oil production coming from clusters of
conductive carbonate fractures. Newer
oil and water saturations were assessed
by logs obtained in 2010. Based on this
production information, a plan for re-
medial action was developed that would
plug-back the well to 7,923 ft, to isolate
the fracture clusters that showed high
water saturations and enhance oil re-
covery from the upper section. Isolation
was to be achieved using two 3-in. OH
thru-tubing inflatable packers with ce-
ment squeezed in-between and a cap of
cement above the second packer to an-
chor it. The operations were performed
rigless, using FOECT WSO treatment
services that included multiple run-in-
hole (RIH) jobs:
1. RIH with FOECT X-Y caliper tools
2. RIH first (lower) inflatable packer
3. RIH second (upper) inflatable packer
and pump cement
4. RIH with TC sub to confirm new TD
5. Flow back the well using nitrogen, if
necessary.
RIH-1: Depth correlation and OH
geometry evaluation. The objectives
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of the first RIH were to ensure wellbore
completion accessibility; correlate
depths; confirm WSO design feasibility
based on OH geometry; evaluate OH
roundness/ovality to determine appro-
priate depths to set inflatable packers;
and confirm the volume of the cement
needed to achieve the desired top-of-
cement TD.
The BHA of the CT was run with a
3-in.-OD toolthe maximum OD of
the inflatable packer element. Depths
were correlated against a reference log
and completion report using the FOECT
CCL and GR readings (Fig. 3), after
which the CT was RIH to the target depth
and flagged. The GR measurements indi-
cated that depths at the WSO target need-
ed to be adjusted by 15 ft to be on depth
with the reference log, due to issues such
as CT stretching and finite repeatability
of the depth encoder.
Evaluation of OH ID and surface
smoothness indicated optimum setting
depths of 8,220 ft for the lower packer
and 8,060 ft for the upper packer. Real-
time CT weight measurements were
utilized to evaluate friction coefficients
of the well and confirm that sufficient
weight could be applied on the packer
after inflation to ensure it was properly
set before the CT lockup. Based on the
FOECT X-Y caliper logs evaluation of
the OH size, the cement volume be-
tween the two packers was increased
from the planned 5 bbl to 7 bbl.
RIH-2: Setting first inflatable
packer. A 3-in.-OD inflatable packer was
set at 8,220 ft. Depth control was based
on the CCL tool while in tubing and the
Fig. 3. Fiber-optic
enabled CT CCL
gamma ray log
CT speed
-100 100
ft/min
Casing collar locator
-100 300
NULL
Bottom hole temperature
25 250
deg C
PFCS caliper X (F13.4)
0 10
IN
PFCS caliper Y (F13.4)
0 10
IN
Gamma ray
0 75
cps
Gamma ray (F 13.4)
0 75
gAPI
X,000
X,010
X,020
X,030
X,040
X,050
X,060
X,070
X,080
X,090
X,100
X,110
X,120
X,130
X,140
Gulf Publishing Companys
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GR tool in OH. BHP was evaluated con-
stantly while running in hole to avoid
premature inflation of the packer. BHP
measurements also prevented packer
damage during inflation or exceeding
packer differential limits and reservoir
fracture pressure during the subsequent
cement squeeze. The TC sub was used
to confirm the packer was properly set
and released. Pump rate during inflation
reached 1.4 bpm and an inflation differ-
ential pressure of about 2,800 psi. No
over-pull was seen for packer release, so a
pump test was conducted. The pressure
was much less, which indicated that the
packer was released as designed. The CT
string was flagged at 8,060 ftthe re-
quired depth of the second packer, while
pulling out of hole.
RIH-3: Setting second inflatable
packer and cementing. Additional
weight was set on the second packer
to help ensure maintained connection
during inflation. At the start of the pro-
cess, the inline universal valve opened at
around 1 bpm with 2,400-psi differential
pressure on the packer. A subsequent in-
jection test confirmed that the inline uni-
versal valve was open.
A laboratory test was performed while
the second packer was set on-depth and
the cement recipe was adjusted to fit
actual bottomhole conditions. A spacer
volume of 5 bbl was pumped through
the CT string to mitigate subsequent ce-
ment contamination. Cement was then
squeezed 4 bbl between the packers
and the remaining 3 bbl above the top
packer. An additional 5 bbl of spacer was
pumped to clean up the wellbore. The
well was then shut in for 24 hr to allow
the cement to develop sufficient com-
pressive strength.
RIH-4: Confirming new TD. The
CT was run in hole to confirm top of ce-
ment, which was found at 7,923 ft (2,000
lb slack-down weight), 137 ft above the
upper packer.
FOECT WSO RESULTS
This case was the worlds first applica-
tion of X-Y Caliper, BHT, BHP, CCL, GR
and TC technologies in one FOECT job.
The FOECT remedial WSO treatment
applied to Well-A recovered its stable oil
production and delivered a 70% decrease
in water cut. The results prove the vi-
ability of this new approach to accurately
evaluate well conditions, control depth,
and monitor bottomhole parameters to
allow proper placement of WSO fluids
into the target zone and isolate water pro-
ducing intervals in OH. The reliable real-
time data provided by FO technology
also supports the design and implemen-
tation of critical operational parameters
in other CT applications such as stimula-
tion and perforation.
ACKNOWLEDGMENT
Te authors thank Saudi Aramco and Schlumberger man-
agement for permission to publish this work. Tis article
was prepared from SPE 149116, presented at the SPE
Saudi Arabia Section Technical Symposium and Exhibi-
tion, held in Al Khobar, Saudi Arabia, May 15-18, 2011.
JORGE DUARTE OLARTE is a
production engineer working in
the Gas Production Engineering
Division, Saudi Aramco. In 1996,
Mr. Olarte received his BS in
Petroleum Engineering from
the Universidad America,
Bogota, Colombia.
SURAJIT HALDAR is a
stimulation and water shutof
champion for water and oil
wells in Saudi Aramcos
Southern Area Production
Engineering Department
(SAPED). Mr. Haldar received
both his BS in chemical engineering (1989) and
his MBA (2006) from the Indian Institute of
Technology, Kharagpur, India.
RIFAT SAID worked for
Schlumberger for 18 years
before joining Saudi Aramco in
Sept. 2006. Currently, Mr. Said
works as a stimulation engineer,
providing technical support to
SAPED. He received his BS in
mechanical engineering (1986) from the
University of Indonesia, Jakarta.
ANTON BUROV is the senior
account manager for
Schlumberger well services in
Saudi Arabia. Mr. Burov earned
an MS degree in mechanical
engineering (2000) from the
Russian State Technical
University of Volgograd .
WASSIM KHARRAT joined
Schlumberger in September
1998. Currently, Mr. Kharrat is
working as the coiled tubing
district technical engineer in
Udhailiyah. In 1998, he received
his MS degree in mechanical
and industrial engineering from cole Nationale
Suprieure d'Arts et Mtiers (ENSAM), France.
JOHN STUKER joined
Schlumberger in 2003. He is a
general eld engineer for coiled
tubing, specializing in ber
optic and downhole tools. Mr.
Stuker received his BS in
mechanical engineering (2003)
from Montana State University.

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CLEAN INNOVATION
Solving challenges.
An Eagle Ford shale outcrop photographed by
Lauren Peschier. Courtesy of AAPG.
World Oil/MONTH 201145
World Oil is pleased to introduce a special section on Geology & Geophysics (G&G). These sections
are timed with the major G&G industry conferences: American Association of Petroleum Geologists
(AAPG), European Association of Geoscientists and Engineers (EAGE) and Society of Exploration
Geophysicists (SEG). We plan to include a preview of each of the conferences as well as several technical
articles covering different aspects of the latest geological and geophysical technologies.
G&G technologies have contributed recently to exploration and production successes in two fron-
tiers: deepwater and shale. G&G advances will be needed as we extend the exploration frontier to the
Arctic. World Oil will explore these topics and more in the upcoming G&G sections.
EOLOGY &
G
GEOPHYSICS
SPECIAL SECTION
AAPG AT A GLANCE /////////////////////////////////////////////////////////////
The AAPG 2012 conference will take place April 2225 at the Long Beach Convention & Entertain-
ment Center, 300 East Ocean Blvd., Long Beach, California. Visit aapg.org/longbeach2012 to register for
the conference and for up-to-date information. Information about technical sessions is at www.aapg.org/
longbeach2012/TechnicalProgram.cfm. The conference will feature five forums or special sessions, 400
oral presentations and 700 poster presentations.
Sunday, April 22. The conference begins on Sunday afternoon from 4-5:15 p.m. with an opening ses-
sion and an awards ceremony.
Monday, April 23. The morning oral sessions will include topics such as emerging oil and gas plays in
Africa, new insights and models on carbonate clastic transitions, and a discussion of faulting, fracturing
and stress in shale and tight gas reservoirs. The afternoon oral session will include the Michel T. Halbouty
lecture about the search for source rocks through the Mars Science Laboratory Rover Mission.
Tuesday, April 24. The morning oral sessions will include topics such as full field life optimization of
producing fields and emerging oil and gas plays in the Arctic areas. There will be several SEPM research
symposiums. The afternoon oral session will cover international emerging oil and gas plays and leading
edge technologies used to identify emerging frontiers. A noteworthy event on Tuesday from 5:10 to 6
p.m. will be the AAPG ethics lecture: oil spills, ethics and societyhow they intersect and where the
responsibilities reside.
Wednesday, April 25. The morning oral sessions will include topics such as petroleum systems of the
eastern hemisphere, carbonate reservoir characterization and even astrogeology. The afternoon oral ses-
sion will cover microseismics, electromagnetic and remote sensing, and deciphering stratigraphic record
through measurement and quantitative analysis.
Themed luncheons. There will be several themed luncheons during the conference, including the
all-convention luncheon on Monday, DPA/Prowess and SEPM luncheons on Tuesday and the DEG and
EMD luncheons on Wednesday.
How local variations in thermal maturity
afect shale oil economics and producibility
SPECIAL SECTION: GEOLOGY & GEOPHYSICS
Geochemical analysis of Eagle Ford oils from
First Shot eld illustrates how areas with
higher thermal maturity have better-quality
oils that are both easier to produce and less
costly to rene.
JANELL D. EDMAN, Edman Geochemical Consulting
With the increasing discovery of shale oil plays, rock and
fluid heterogeneities within these plays are becoming evident.
In addition to variations in source facies, differences in thermal
maturity over local areas are also responsible for some of the
observed heterogeneities in fluid types. Therefore, accurate de-
termination of local thermal maturity variations provides an in-
expensive technique that can be used to high-grade acreage and
determine where better quality oils that are easier to produce
from tight reservoirs are likely to be found.
GEOLOGIC FRAMEWORK
The Eagle Ford is currently one of the most active shale
plays in the United States.
1
This Eagle Ford case history from
the First Shot field area illustrates how thermal maturity im-
pacts oil productivity and quality over relatively short distanc-
es. Much of the First Shot field is situated on the southwest
flank of the San Marcos Arch
2
, Fig. 1. Another important lo-
cal structural feature is the Karnes Fault Zone, which com-
prises a series of down-to-the-coast, listric normal faults.
4,5

Regionally, the Eagle Ford Group disconformably overlies the
Woodbine Group and is also overlain disconformably by the
Austin Chalk.
6-10
Much of the Eagle Ford Group is a mixed
siliciclastic/carbonate unit (Fig. 2 and photo on this page)
that records a second order, Late Cretaceous (Cenomanian to
Turonian) transgression and highstand of eustatic sea level.
7-10

Regional statigraphic correlations using electric logs indicate
that most of the samples in this study are probably from the
lower Eagle Ford (Fig. 3).
GEOCHEMICAL ANALYSES
The locations of the wells from which rock and oil samples
were taken for this study are shown in Fig. 1. Total organic
carbon (TOC) was measured on 46 Eagle Ford rock samples.
Samples with TOC contents of 1% or greater were analyzed by
Rock-Eval pyrolysis.
11
Results of the TOC and Rock-Eval pyrol-
ysis analyses were used to select rock samples for solvent extrac-
tion and vitrinite reflectance analyses. Thirteen Eagle Ford oil
samples were submitted for API gravity and weight percent sul-
fur determination. Liquid chromatography was used to separate
the oils and source rock extracts into fractions. The extract and
oil saturate fractions were then further analyzed by gas chroma-
tography (GC) and biomarker (GCMS/MS) analyses.
Eagle Ford photomicrograph showing light laminae of
foraminifera tests and dark laminae of clay and organic matter.
The intervals enriched in foram tests are the better reservoirs.
Fig. 1. Location map showing the First Shot eld area and
geochemical sample locations. The location of the Lower
Cretaceous Shelf Edge is after Galloway et al. (2000)
3
.
Malatek # 1
Dallas
Waco
Houston
Austin
Austin Chalk-Eagle Ford outcrop
First Shot Field
San Antonio
L
o
w
e
r
C
re
t
a
c
e
o
u
s
S
h
e
lf E
d
g
e
Petrohawk STS 241 # 1H
Texas
Robinson-Barker # 1
Robinson-Troell # 1
Mary Lessor et al. # 1
C. Copeland # 1
Maseles et al. # 1
Horst
0 5 10 mile
0 75 150 mile
Estrada et al. # 1
Mahon # 1
Guadalupe
S
a
n

M
a
r
c
o
s

A
r
c
h
K
a
rn
e
s Fa
u
lt Zo
n
e
Gonzales
Wilson
De Witt
Karnes
Oil sample
Oil and source rock sample
Bell Sample # 1
Purdon # 1
First Shot Field
GEOCHEMICAL MATURITY
Most geochemical parameters are a function of both the or-
ganic matter (kerogen) composition and the thermal maturity
level of the organic matter, when it generated hydrocarbons.
12,13
As a source rock generates and expels hydrocarbons, measure-
able changes occur in both the source rocks and the hydro-
carbons generated. For example, TOC
14
and S2 values
15
both
decrease with increasing thermal maturity. Such changes in geo-
chemical parameters, with increasing hydrocarbon maturation,
can be used to help determine whether the source rock for a
shale oil play is immature, in the early oil window, at peak oil
generation, in the late oil window, in the zone of condensate and
wet gas generation, or in the dry gas window. In this investiga-
tion, over a distance of about 11 miles, the Eagle Ford extends
from the early oil window to the late oil windowa change that
has a marked impact on oil producibility and quality. Four dif-
ferent maturity parameters (T
max
, vitrinite reflectance, and gas
chromatography and biomarker parameters) were used in this
study to determine thermal maturity. For the best and most ac-
curate maturity determinations, multiple thermal maturity pa-
rameters should be measured and compared, and any discrep-
ancies in the maturity data should be resolved.
T
max
is a thermal maturity parameter derived from pyroly-
sis (heating) of ground source rocks.
12,16,17,18
During pyrolysis,
two hydrocarbon peaks are evolved: S1, the hydrocarbons al-
ready generated, and S2, the remaining hydrocarbon generating
potential. T
max
is the oven temperature of the analytical instru-
ment at which the maximum S2 yield is obtained, and it increas-
es with increasing source rock maturity. The generic beginning
and ending of the oil-generative window correspond approxi-
mately to T
max
values of 435C and 470C, respectively.
16,18
A
plot of T
max
vs. depth for the three wells with Eagle Ford source
rock samples is shown in Fig. 4. Published guidelines
18
for the
average T
max
values indicate that the Eagle Ford is in the early oil
window in Bell Sample #1, at peak oil generation in Estrada et
al. #1, and in the late oil window in Robinson-Troell #1. There
is a greater increase in thermal maturity relative to the increase
in sample depth between the Robinson-Troell #1 core samples
and the Estrada et al. #1 cuttings than there is between Estrada
et al. #1 cuttings and the Bell Sample #1 samples.
Vitrinite reflectance (%Ro) is another thermal maturity
parameter measured for this study, Table 1. All of the %Ro val-
ues are followed by a question mark indicating a high degree of
Fig. 2. Slabbed
Eagle Ford core
from the Robinson-
Troell #1 well. Yard-
stick to the far right
shows the scale.
Fig. 3. Diagrammatic electric log for the Bell Sample #1 well
showing gamma ray depth, and resistivity for the Eagle Ford. The
samples in this study are mostly from the lower Eagle Ford.
Source: Texas Railroad Commission, Well Completion Report; www.rrc.state.tx.us
7,400
7,300
7,200 Eagle Ford Top
Austin Chalk
Sample-depth range*
(Bentonite bed)
Sample-depth range**
* Core, ** Cuttings
Eagle Ford Base
Upper
Middle
Lower
Buda
7,100
7,000
6,900
150 75 2 20 200
Gamma ray (GAPI) Resistivity OHMs
0
MD
feet
Fig. 4. T
max
vs. depth for all three wells. The T
max
values rise with
increasing sample depth, indicating the deeper samples are more
thermally mature.
Bell Sample # 1
Average depth: 7,293 ft
Average T
max
: 441
Early oil window
Estrada et al. # 1
Average T
max
: 446
Peak oil generation
M
e
a
s
u
r
e
d

d
e
p
t
h
,

f
t
Robinson-Troell # 1
Average T
max
: 452
Late oil window
10,000
9,500
430 435 440 445
Rock-Eval pyrolysis T
max
, C
450 455 460
9,000
8,500
8,000
7,500
7,000
Bell Sample # 1 core
Bell Sample # 1 cuttings
Estrada et al. # 1 cuttings
Robinson-Troell # 1 core
World Oil invites you to submit an abstract for consideration at the 2012 Shale Energy Technology Conference. The conference, August 2122, 2012, in Houston, is
dedicated to sharing technology used in shale gas, condensate and oil production.
Hosted by Gulf Publishing Company and World Oil, the two-day conference program will ofer high-level, dual-track technical content. Sessions will focus on
Exploration and Drilling with topics on formation evaluation, horizontal drilling and geosteering. In addition, a parallel session on Completion and Production will
cover completion design, multi-stage fracing, proppant selection, fracture monitoring and frac water recycling.
Subjects should be geared toward shale exploration, drilling, completions and production. Topics related to these categories include:
Horizontal drilling
Case historiesspecic to diferent shale plays, both U.S. & International
Casing failures
Completion optimization
Multi-stage fracing technology
Gas migration
Gas vs. liquids production
Manpower and training
Microseismic monitoring of fracturing
Opportunities for improvement
Production enhancement
Production monitoring
Proppant selection
Formation evaluationtying geology & geophysics back to actual results
Water management: frac & produced water disposal and recycling
TECHNOLOGY CONFERENCE
NERGY
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CALL FOR ABSTRACTS
AUGUST 2122, 2012
Westin Memorial City
Houston, Texas
Gil Bujano
Deputy Director for
Technical Permitting
Texas Railroad Commission
Cecil Colwell
Senior Vice President
Worldwide Drilling
Forest Oil Corporation
Chris Doyle
General Manager, Marcellus Shale
Anadarko
Kurt Abraham
Executive Editor
World Oil
Glenda Wylie
Director of Technical Marketing
Halliburton
Ali Daneshy
President
Daneshy Consultants Intl, Inc.
Rustom K. Mody
Vice President Technology
Baker Hughes Incorporated
Jose Mota
Well Engineering
Shell E&P
Bill Pike
Leonardo Technologies, Inc.
Contractor to DOE
National Energy Technology Laboratory
United States Department of Energy
The 2012 Shale Energy Technical Advisory Board:
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Abstracts should be approximately 250 words in length and include all authors, af liations, pertinent contact information, and the proposed speaker
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Submit an Abstract for Consideration by March 23, 2012: Events@GulfPub.com | Exhibit or Sponsor: Contact your local World Oil sales
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Conference Sponsor:
uncertainty for these measurements. This uncertainty is typical
of %Ro measurements for many shale oil plays because these
shales were deposited in environments that commonly lack true
vitrinite, which is derived from higher plant sources in rocks of
Devonian and younger age. In addition, the measurement of vi-
trinite reflectance on dispersed organic matter in sedimentary
rocks is notoriously subjective, because morphology alone is
generally used to identify true vitrinite. While this may work
for coals (%Ro was developed for coals), it does not work well
for black shales that often contain a number of other organic
constituents having vitritnite morphology but not vitrinite
chemistry. If %Ro is measured on these other constituents, then
the maturity determination may be either too high or too low.
Using fluorescence in conjunction with reflectance provides a
more objective means for identifying true vitrinite and is one
way of circumventing the subjectivity problem.
19
The %Ro measurements for the First Shot field samples in-
dicate that the Eagle Ford may be in the early oil window in Bell
Sample #1 and in the late oil window in the Estrada et al. #1 and
Robinson-Troell #1 wells.
20
Whereas T
max
data indicate that the
Estrada et al. #1 Eagle Ford is at peak oil generation, the %Ro
data suggest that these same samples are in the late oil window.
Comparison of the T
max
and vitrinite data with gas chromatog-
raphy and biomarker maturity parameters is needed to resolve
this apparent disagreement in maturity data.
Gas chromatography (GC). The dominant influence of
maturity on the oils and extracts in this study can also be ob-
served in the GC data (Fig. 5), in which two GC thermal ma-
turity parameters, pristane/nC
17
and phytane/nC
18
, are cross
plotted. Pristane and phytane are branched alkanes, and nC
17
and nC
18,
are straight-chain alkanes. With increasing matu-
rity, Pr/nC
17
and Ph/nC
18
both decrease.
12,13
Therefore, the
less mature oils plot in the upper right, and the more mature
oils plot in the lower left. As is the case for T
max
(Fig. 4) and
%Ro (Table 1) maturity parameters, the Bell Sample #1 Eagle
Ford GC maturity parameters exhibit lower maturity, and the
Robinson-Troell displays higher maturity. The R
2
in Fig. 5
for the 13 Eagle Ford-sourced oils
21
is 0.8032, indicating the
oils in this plot have the same/similar source, and these data
points plot along the same tie line, mostly according to ther-
mal maturity variations occurring within oils generated from
this same/similar source rock.
Biomarkers (GCMS/MS) are molecular fossils that can be
used to provide information on both the maturity and source
facies of rocks and oils. They are also among the most powerful
fingerprinting tools available for determining whether various
oils have the same or similar source rock for a particular oil. In
this article, biomarkers are used primarily to determine the rela-
tive thermal maturity of oils and source rock extracts. For the
seven source rock extracts evaluated for this paper, the oil satu-
ration indices (OSI or S1x100/TOC) are all less than 100, in-
dicating the Eagle Ford extracts are indigenous bitumen rather
than migrated oil.
22
In Fig. 6, two biomarker parameters that are sensitive to
changes in thermal maturity, (Ts/(Ts + Tm) and (C29Ts)/
(C29Ts + C29Tm), are cross-plotted to show the relative ther-
Fig. 5. Gas chromatography maturity parameters phytane/nC
18
vs.
pristane/nC
17
for 13 Eagle Ford oils from the First Shot eld area.
P
h
y
t
a
n
e
/
n
C
1
8
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
0.20 0.40 0.60 0.80 1.00
Pristane/nC
17
More mature
Less mature
Copeland, openhole
Eagle Ford oils
Maseles # 1, 7,340 ft
Purdon, 6,939 ft
Robinson-Troell # 1, 9,054-60 ft
Bell Sample # 1, 7,200-10 ft
y = 1.0074x + 0.1889
R
2
= 0.8032
Table 1. Vitrinite Reectance Data
Well %Ro Measured Generation Stage
Depth, ft
Bell Sample #1 0.59 (?) 7291 Early Oil
Estrada et al. #1 1.15 (?) 8720
1.21 (?) 8760 Late Oil
1.19 (?) 8810
Robinson-Troell #1 1.21 (?) 9224.7
1.06 (?) 9237.9 Late Oil
1.12 (?) 9244.8
Fig. 6. Terpane biomarker maturity parameters C29Ts/(C29Ts
+C29Tm) vs. Ts/(Ts+Tm) for the 13 Eagle Ford oils and seven
Eagle Ford source rock extracts from the First Shot eld area.
C
2
9
T
s
/
(
C
2
9
T
s

+

C
2
9
T
m
)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
0.00 0.20 0.40 0.60 0.80 1.00 1.20
Ts/(Ts + Tm)
More mature
Less mature
Copeland # 1
R-B # 1
BS # 1
R-T # 1
R-T # 1
E # 1
E # 1
BS # 1
y = 0.9615x 0.1885
R
2
= 0.9644
y = 0.8397x 0.1356
R
2
= 0.9871
Eagle Ford oils
Eagle Ford extracts
Linear (Eagle Ford oils)
Linear (Eagle Ford extracts)
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mal maturity of various oils and source rock extracts in this
study. With increasing thermal maturity, Ts increases relative to
Tm, and C29Ts increases relative to C29Tm.
13
Thus, the less
mature oils and extracts plot in the lower left, and the more ma-
ture oils and extracts plot in the upper right.
The linear regression line through these maturity-sensitive
oil parameters has an R
2
of 0.9871, and the R
2
for the linear
regression line through the source extracts is 0.9644. The high
R
2
values for these maturity-sensitive parameters, combined
with the similarity of the slopes for the two linear regression
lines (0.8397 and 0.9615, respectively) indicate the Eagle
Ford oils and extracts have the same/similar source facies, and
that the variations in where the data plot along the tie lines are
largely the result of differences in thermal maturity. That is,
the source rock extracts and oils from the Bell Sample #1 well
tend to be the least thermally mature, the Robinson-Troell #1
oil and extract have among the highest thermal maturities, and
the maturity of the Estrada et al. #1 extracts is intermediate be-
tween the Bell Sample #1 and the Robinson-Troell #1. These
observations tend to support the T
max
maturity data (rather
than the vitrinite reflectance data) in indicating the Estrada
et al. #1 Eagle Ford is more likely to be at peak oil generation
as opposed to being in the late oil window. Finally, in showing
that the source rock extracts and oils from the same wells have
comparable thermal maturities and the same/similar source
facies, Fig. 6 indicates most of the Eagle Ford oils at First Shot
field were locally sourced.
To summarize, four different geochemical maturity param-
eters generally indicate that, of the three wells in this study with
rock samples, the Eagle Ford is in the early oil window in the
Bell Sample #1 well, at peak oil generation in the Estrada et al.
#1 well, and in the late oil window in the Robinson-Troell #1
well. Note that Bell Sample #1 and Robinson-Troell #1 are only
11 miles apart. Yet, there is a significant maturity difference be-
tween these two wells.
MATURITY EFFECTS
Effect of maturity on rock geochemical measurements.
Geochemical measurements represent the present-day values
of the various geochemical parameters. If the source rocks are
mature and have already generated and expelled hydrocarbons,
then the present-day values for such parameters as TOC and
S2 are residual values and will be lower than the initial/origi-
nal TOC
14
and S2
15
values. The plots of S2 vs. TOC shown in
Figs. 7 and 8 can thus be regarded as present-day snapshots
of what the current hydrocarbon-generating capacity and kero-
gen types are. These two plots do not show the original TOC
and S2 values.
For both of these plots, the S2 values typically tend to be
higher for the lower maturity samples (Bell Sample #1) and
lower for the higher maturity samples (Robinson-Troell #1).
The TOC values for the Bell Sample #1 core samples and
the Robinson-Troell #1 core samples do not exhibit as much
variation as the S2 values. This may be because of organic fa-
cies and kinetics variations between the Eagle Ford in these
two wells. Therefore, the overall progressive decrease in Eagle
Ford S2 values shown in Fig. 7 and 8 between Bell Sample #1,
Estrada et al. #1, and Robinson-Troell #1 wells is interpreted to
be due mostly to the respective increase in maturity for these
three sample sets. Similarly, the apparent change in Eagle Ford
organic matter (kerogen) type from Type II in the Bell Sample
#1 core to mixed Type II/III in Estrada et al. #1, to Type III
in Robinson-Troell #1, shown in Fig. 8, is also likely to be the
result of Eagle Ford maturity differences between these three
wells, rather than to actual changes from originally oil-prone
to originally gas-prone kerogen.
Effect of maturity on oil geochemical measurements.
The effect of increases in source rock thermal maturity on the
First Shot oils is illustrated in Fig. 9, which is a cross plot of
Fig. 7. Log-log cross plot of Eagle Ford S2 vs. TOC data.
Interpretive data elds are from Peters and Cassa (1994).
18
S
2
(
m
g

H
C
/
g

r
o
c
k
)
0.10
1
10
100
0.10 1 10 100
Weight % total organic carbon
Poor
Good
Good
Very good
Very
good
Excellent
Excellent
Fair
Fair Poor
Fig. 8. Linear-linear plot of S2 vs. TOC for the Eagle Ford source
rock samples. Plot modied from Geochemistry Services Group at
Weatherford Labs.
S
2
(
r
e
m
a
i
n
i
n
g

h
y
d
r
o
c
a
r
b
o
n

p
o
t
e
n
t
i
a
l
)
,

m
g

H
C
/
g

r
o
c
k
0
2
4
6
8
10
12
14
16
18
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Total organic carbon (TOC, wt.%)
y = 2.4807x 0.702
R
2
= 0.994
y = 4.0167x 1.5151
R
2
= 0.8918
y = 1.9576x 0.0908
R
2
= 0.9964
Type I oil prone
usu. lacustrine
Type II oil prone
usu. marine
Mixed type II/III
oil/gas prone
Type III
gas prone
Organic
lean
Dry
gas prone
weight percent sulfur (%S) vs. API gravity. With increasing
thermal maturity, the weight %S in oils generated from the
same/similar source rock decreases, and the API gravity in-
creases.
12
Therefore, Fig. 9 can also be used to determine rela-
tive thermal maturity of the First Shot oils. Although the R
2

for the linear regression line through all 13 oils is only 0.5641,
by removing two outlier data points from this plot (the
Maseles et al. #1 7,296 ft and 7,340 ft oils), the R
2
increases to
0.8898. The observation that these 11 oils all fall on the same
tie line with an R
2
of 0.8898 is interpreted as indicating these
oils were probably generated from the same/similar source fa-
cies but at different levels of thermal maturity. Specifically, the
lowest maturity oil generated from this common source facies
is from the Bell Sample #1 well, and the most mature oil gen-
erated when this same/similar source facies was more mature
is the C. Copeland #1 open hole oil. Other high-maturity oils
in this plot are from the Robinson-Troell #1 and Robinson-
Barker #1 wells.
Fig. 9 also shows seven of these 13 Eagle Ford oils have
sulfur contents greater than 1%, and an eighth oil has a sulfur
content of 0.99%. Oils with greater than 1% sulfur are clas-
sified as high-sulfur oils. Therefore, most of the oils in this
study are high-sulfur oils. Furthermore, high-sulfur oils are
typically generated from high-sulfur organic matter,
23
so most
of the First Shot field Eagle Ford oils were generated from a
source facies variant within the Eagle Ford that has elevated
sulfur contents. A number of investigators
23-26
have proposed
that high-sulfur kerogens start to generate oil at lower thermal
maturity levels. Therefore, the higher-sulfur kerogen that gen-
erated the high sulfur oils in the First Shot field area may have
begun to generate oil at lower thermal maturity levels than
would be anticipated for more typical Type II kerogens. Fail-
ure to recognize the possibility of early generation for these
oils might lead a company to overlook or downgrade an area
where this facies of the Eagle Ford has already begun gener-
ating oil, even though the %Ro is <0.6 (the assumed generic
onset of oil generation).
However, the variations in %S and API gravity have signifi-
cant economic consequences for the First Shot Eagle Ford oils.
First, the high-sulfur, low-gravity oils are likely to be more vis-
cous and more difficult to produce from low-permeability, low-
porosity reservoirs. Second, high-sulfur oils are more expen-
sive to refine, and the producer may have to pay a penalty for
higher sulfur Eagle Ford oils. Ideally, companies should look for
higher maturity sweet spots, where better quality oils (such as
the Robinson-Troell #1 oil with a gravity of 36.3 and 0.57 %S)
are more likely to be found. Delineating such maturity sweet
spots can be done by using a number of low-cost geochemical
maturity measurements to obtain the most accurate consensus
of true maturity.
One question remains to be answered. Why is the maturity
for Robinson-Troell #1 so much higher than for Bell Sample #1
well (Fig. 4), when these wells are only 11 miles apart (Fig. 1)?
Modeling shows that differences in burial depth, alone, cannot
account for the maturity differences. Instead, one needs to call
on variations in the thermal history.
27
One potential cause for
the elevated Robinson-Troell #1 thermal history is hydrother-
mal activity, which has been mentioned in the literature as a
possibility, and there is specific evidence for hydrothermal ac-
tivity in the First Shot field.
4
These hydrothermal fluids could
have migrated up the Karnes Fault Zone (Fig. 1) and elevated
the maturity of the Eagle Ford in the Robinson-Troell #1 well.
CONCLUSIONS
1. Maturity levels of the Eagle Ford in the First Shot field area
range from the early oil window to the late oil window. Con-
sequently, even in this relatively local area, the producibility,
physical properties, and value of the Eagle Ford oils also vary
as maturity changes within the field.
2. In general, the lower-maturity Eagle Ford oils at First Shot
field tend to have higher sulfur content, lower gravity values
and are more viscous. Such properties make these low-ma-
turity oils more difficult to produce from low-permeability
rocks and more costly to refine. In contrast, the higher-matu-
rity Eagle Ford oils have much lower sulfur contents, higher
gravities, and are less viscous, making them easier to produce
from tight reservoirs and less costly to refine.
3. Accurate determination of thermal maturity by various geo-
chemical measurements provides a low-cost means of high-
grading acreage and determining where the better-quality
and more easily produced oils are more likely to occur. This
technology can be applied easily and inexpensively to other
shale oil plays.
WEB EXCLUSIVE: Please visit www.worldoil.com for acknowledgments, literature
cited and GCAGS republishing permission for this article.
JANELL EDMAN is an industry recognized expert in
interpreting oil, gas and source rock geochemical data.
Dr. Edman has BS and MS degrees in geophysics from
Stanford University and a Ph.D. in geology from the
University of Wyoming. She has over 25 years of
industry experience in both domestic and international
exploration and production, including 10 years at
Marathon's Petroleum Technology Center, over 10 years as a consulting
geochemist, and ve years of prospect generation work at Mobil.
Fig. 9. Weight percent sulfur vs. API gravity for the Eagle Ford
oils in the First Shot eld area.
W
e
i
g
h
t

%

s
u
l
f
u
r
0.0
0.5
1.0
1.5
2.0
2.5
3.0
15 20 25 30 35 40 45
API gravity, degrees
y = -0.1162x + 4.8016
R
2
= 0.5641
Purdon # 1, 6,939 ft
BS # 1, 7,200 ft-10 ft
Maseles et al, # 1, 7,340 ft
Maseles et al, # 1, 7,296 ft
Higher sulfur
source kerogen
Higher sulfur
Low sulfur
R-T # 1
R-B # 1
C. Copeland # 1
y = -0.1425x + 5.7637
R
2
= 0.8898
13 Eagle Ford oils
11 Eagle Ford oils
Linear (13 Eagle Ford oils)
Linear (11 Eagle Ford oils)
More mature
Less mature
SPECIAL SECTION: GEOLOGY & GEOPHYSICS
Efective eld development
strategies require operators
to know what portion of
original resources has not yet
been produced. Determining
not-yet-produced resources
can be a complex challenge
when production is
commingled from multiple
zones. A new technique has
been developed that achieves
production allocation at a
fraction of the cost.
MARK A. MCCAFFREY, DAVID K. BASKIN
and BROOKS A. PATTERSON, Weatherford
Laboratories; DANIELLE H. OHMS and
CHRISTOPHER STONE, BP Exploration (Alaska)
Inc.; DAVID REISDORF, Alta Mesa Services, LP
Geochemical production allocation
is analogous to the following scenario. A
glass of water (Water A) contains 100 ppm
sodium dissolved in the water. A second
glass of water (Water B) contains 200 ppm
sodium. When unknown amounts of each
are mixed, the mixture is found to contain
150 ppm sodium. Intuitively, we know that
the mixture contains 50% Water A and 50%
Water B because 150 ppm is the midpoint
between 100 ppm and 200 ppm. In this
example, the abundance of one chemical
component in the water (sodium) made
chemical allocation of the commingled
water possible. Similarly, a difference in the
abundance of any one chemical compound
in the hydrocarbons from each of two res-
ervoirs in an oil field is sufficient to serve
as a natural tracer for chemically allocating
commingled production.
Returning to the example, if a third wa-
ter (Water C), containing 300 ppm sodi-
um, is added to the mix, then a single, natu-
ral tracer is no longer sufficient to allocate
the contributions of the three waters to the
sample. A second chemical tracer, such as
the magnesium concentration, is now nec-
essary. Using the two tracers together, the
three-zone allocation problem can now be
solved, as long as the abundance of each
tracer is different in Water A, B and C. Ex-
trapolated for oilfield operations, for n
zones being commingled, n-1 natural
tracers are required to allocate the contri-
bution from each zone to the mixture.
IMPROVING GEOCHEMICAL
ALLOCATION METHODOLOGY
Chemistry-based allocation of com-
mingled production has been available
for more than 20 years, for allocation of
production from multiple zones to a com-
mingled production stream in a single
well, and for allocation of production
from multiple fields to a commingled pro-
duction stream in a single pipeline. These
methods use whole-oil gas chromatogra-
phy (GC) peak ratios to quantify the con-
tribution of each individual production
stream to the commingled production
stream. A GC analysis of an oil provides
values for the abundance of more than
1,000 naturally occurring compounds in
the oil. The abundances of any combina-
tion of those compounds can be used as
natural tracers for allocating commingled
production. The collective abundances
form a fingerprint of the oil. The abun-
dance of a given compound in the oil is
proportional to the height of a peak on the
graphical output of the GC instrument.
If two zones (A and B) were commin-
gled, the respective contributions of the
zones to the commingled sample could be
determined by identifying chemical differ-
ences between end-member oils, with the
end members being pure samples from A
and B. In the original allocation method,
geochemical parameters (GC peak ratios)
reflecting these compositional differences
were measured in the end-member oils,
Oil ngerprinting dramatically reduces
production allocation costs
Linda Clancy of Weatherford Laaboratories loads an oil sample into the auto-sampler
tray of an Agilent-6890 Gas Chromatograph. The instrument can readily separate an oil
into ~1000 components, each of which can serve as a "natual tracer" for geochemical
allocation of commingled oil production.
and in various artificial mixtures of the
end-member oils and in the commingled
oil. The data were then used to mathemati-
cally express the composition of the com-
mingled oil in terms of contributions from
the respective end-member oils.
Using that simple mixing model, a sin-
gle geochemical difference between oils
from two sands is sufficient to allocate
commingled production from those two
units. By using data for several peak ratios,
independent solutions to the problem
could be derived, allowing the accuracy of
the allocation to be assessed.
The original approach for geochemi-
cal allocation had two drawbacks. First,
it required analysis of artificial mixtures
of the end-member oils, because ratios of
GC peak heights only mix linearly, when
the same absolute value is present in the
denominator of the ratio of the two peak
heights in all of the end-member oils be-
ing mixed. For example, if the ratio of the
height of GC Peak A and GC Peak B is
measured in three end-member oils and
is found to be 7/2 in Oil X, 9/2 in Oil Y,
and 9/3 in Oil Z, the value for the ratio of
Peak A/Peak B will mix linearly between
Oil X and Oil Y, but will not mix linearly
between Oil X and Oil Z because Peak B
has a denominator value of 2 in Oil X but
3 in Oil Z. Therefore, in the original ap-
proach, artificial mixes of end-member
oils had to be prepared to determine the
shape of the calibration curve that defines
how a given GC ratio changes, as one
moves from 100% Oil X to 100% Oil Z.
The second drawback to the original
approach was that allocation was limited
to two or three zones, because, for a given
GC ratio, two end members when mixed
form a mixing curve, and three end mem-
bers when mixed form a mixing surface,
but when more than three end members
are mixed, there is no simple graphical
representation of the mixing from which
to derive a solution.
An alternate approach was developed
that allocates commingled production us-
ing a large number of GC peak heights (not
Fig. 1. Well NK-43
comparison of
geochemistry-
derived production
splits with
Production prole
Log (PLT)-derived
production splits.
0
10
20
30
40
50
60
70
80
90
100
10/25/2005 2/2/2006 5/13/2006 8/21/2006 11/29/2006 3/9/2007 6/17/2007
NK-43 Sag vs. NOP oil splits
W
e
i
g
h
t
,

%
Date
Sag Geochem
NOP Geochem
Sag PLT
NOP PLT
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analysis of treatment data for continuous production improvement.
ratios) to derive a linear-algebra-based al-
location result (as opposed to the original
approach that used a small number of GC
peak ratios to construct a graphical solu-
tion). This new approach does not require
analysis of artificial mixtures of end-mem-
ber oils and can be applied to any number
of mixed zones. This new method was
automated in a proprietary, geochemical,
production allocation software package.
TESTING THE NEW TECHNIQUE
Over a 10-year period, more than 30
blind mixing tests of this new approach
were conducted. Various laboratories pre-
pared multiple, artificial mixtures of two
to four end-member oils and initially did
not reveal the contribution of each end
member to each mixture. For each study,
the mixed oils and the end-member oils
were then analyzed by GC, and an allo-
cation result was calculated. The true
allocation values were then revealed, and
comparison of the true values with the cal-
culated results proved the accuracy of the
approach. The blind tests collectively in-
cluded 32 commingled oils, each prepared
by mixing two to four end-member oils.
On average, the allocation results differed
from the true values by 1.8% for two-zone
mixtures, 2.0% for three-zone mixtures,
and 2.3% for four-zone mixtures, Table 1.
Field tests were also conducted using
the geochemical allocation approach for
numerous samples of commingled oils.
Allocation results were compared with
production logging tool (PLT) results for
the same wells. More than 2,200 commin-
gled oils from the North Slope of Alaska
have been geochemically allocated over
the last 11 years. Two case studies from
that area are presented here, as well as
an additional example from Oklahoma.
Although these case studies are for two-
zone allocations, Weatherford Laborato-
ries routinely uses the same geochemical
methodology to allocate commingled
production from three to six zones.
Well Niakuk-43 (NK-43), Greater
Prudhoe Bay, North Slope, Alaska.
Well NK-43 was drilled in February
2001. The Sag River (Sag) formation was
perforated and tested first. Subsequently,
a cast iron bridge plug (CIBP) was set to
isolate the Sag, and the Niakuk Oil Pool
(NOP, Kuparuk formation) was then
perforated and produced.
A blind test was performed, in which
the operator provided three artificial mix-
tures of NK-43 Sag oil and NK-43 Kuparuk
oil. The geochemical approach described
above was used to allocate the artificial
mixtures. After the allocation results had
been reported, the operator revealed the
makeup of the three artificial mixtures.
The differences between the geochemical-
ly derived allocation results and the com-
position of the artificial mixtures reported
by the operator were 1.6%, 2.6% and 1.0%,
Table 1. Calculated allocation results compared to actual compositions for articial mixtures of oils or gases
Actual composition Diference between
Calculated of articial mixture calculated Geochemical
Number allocation prepared by and actual parameters Blind
Location of zones Type result, % laboratory, % composition, % used test?
Well NK-43 2 Oil 13.4 / 86.6 15.0 / 85.0 1.6 48 Yes
Well NK-43 2 Oil 47.5 / 52.5 50.1 / 49.9 2.6 48 Yes
Well NK-43 2 Oil 78.9 / 21.1 79.9 / 20.1 1.0 48 Yes
Well S-26 2 Oil 68.8 / 31.2 75.0 / 25.0 6.2 132 Yes
Well S-26 2 Oil 46.1 / 53.9 50.0 / 50.0 3.9 132 Yes
Well S-26 2 Oil 20.9 / 79.1 25.0 / 75.0 4.1 132 Yes
Undisclosed Alaska A 2 Oil 65.1 / 34.9 66.5 / 33.5 1.4 209 Yes
Undisclosed Alaska A 2 Oil 87.1 / 12.9 87.85 / 12.15 0.75 209 Yes
Undisclosed 0140 2 Oil 48.0 / 52.0 50.1 / 49.9 2.1 40 Yes
Average error of allocation of two-zone articial mixtures of oils in this table: 1.8
Undisclosed 1100 2 Gas 50.6 / 49.4 50.0 / 50.0 0.6 8 No
Undisclosed 08834 3 Oil 60.2 / 39.8 / 0 64.5 / 35.5 / 0 4.3 / 4.3 / 0 158 Yes
Undisclosed 08834 3 Oil 33.5 / 46.7 / 19.8 39.1 / 40.9 / 20.0 5.6 / 5.8 / 0.2 158 Yes
Average error of allocation of three-zone articial mixtures of oils in this table: 2.0
Undisclosed 0140 4 Oil 10.0 / 18.0 / 29.0 / 43.0 10.0 / 19.9 / 29.8 / 40.3 0.0 / 1.9 / 0.8 / 2.7 40 Yes
Average error of allocation of four-zone articial mixtures of oils in this table: 2.3
Table 1. The low errors in that blind test
led the operator to then try a field study in
which geochemical allocation was com-
pared against production logs.
The CIPB separating Kuparuk and
Sag was milled out on Jan. 9, 2006, and
commingled production began Jan. 29.
During a six-month commingled testing
period, four production profiles, 24 geo-
chemical samples, two static bottomhole
pressure surveys and 43 well tests were
gathered to assess performance of the Sag
and Kuparuk intervals. The logging ser-
vice company interpreted the oil, water
and gas splits between the pools. Weath-
erford Laboratories interpreted oil splits
using the new geochemical methodology.
Neither company was privy to the others
analysis or results. A comparison of the
commingled oil splits from both the pro-
duction profiles and oil geochemical fin-
gerprinting is presented in Fig. 1.
Based on these results, the operator
concluded that geochemical analysis pro-
vided an accurate method of allocating
oil between NOP and Sag. The well op-
erator prepared, for the Alaska Oil and Gas
Conservation Commission (AOGCC), a
report on the study results and proposed
that starting from July 1, 2007, geochemi-
cal fingerprinting be used for oil alloca-
tion purposes. The AOGCC concurred,
and the NK-43 well has been periodically
monitored by geochemical allocation since
that date. A key advantage of geochemical
allocation is that the 24 allocations for this
well, performed on 24 different dates, had
a combined cost that was less than the cost
of any one of the four production profiles.
Well S-26, Prudhoe Bay Field, North
Slope, Alaska. Well S-26 penetrates the
Aurora Oil Pool and Prudhoe Oil Pool in
areas where well rates from both pools are
typically low. A stand-alone Aurora pro-
ducer in this area could not be justified,
due to the expected low rates and associ-
ated problems with paraffin and hydrate
deposition. A rig workover (RWO) was
planned to commingle production from
the two pools within the S-26 wellbore
and maximize oil production from the
two pools.
Prudhoe production was isolated on
Dec. 15, 2007. The workover was com-
pleted in January 2008. Aurora perfs were
added, an initial Aurora-only SBHP was
obtained, and the well was put onstream
on April 4, 2008.
A blind test was performed, in which
the operator provided three artificial mix-
tures of S-26 Ivishak oil and S-26 Aurora
oil. The artificial mixtures were geochemi-
cally allocated, and the results were re-
ported to the operator, after which the op-
erator revealed the makeup of the artificial
mixtures. The difference between the geo-
chemically derived allocation results and
the composition of the artificial mixtures
reported by the operator were 6.2%, 3.9%,
and 4.1%. The low errors in that blind test
led the operator to then try a field study in
which geochemical allocation was com-
pared against production logs.
During the six-month commingled
test period, the well operator obtained
production profiles, static bottomhole
pressure surveys, geochemical samples
and well tests. Two production profile
logs, seven geochemical samples, and 19
well tests were gathered to assess perfor-
mance of the Prudhoe and Aurora zones.
The logging service company interpreted
the oil, water and gas splits between the
pools, and Weatherford Laboratories
interpreted the oil splits using the geo-
chemical methodology. Neither company
was privy to the others analysis or results.
The average Aurora oil split over the
commingled test period from the two
PLTs was 53%. This value is a very close
match (Fig. 2) to the average of the geo-
chemically derived percentage for Aurora
oil (55% average for all seven samples), or
53% average for six of the seven samples
(i.e., excluding the initial sample when the
Prudhoe Oil Pool was just reopened and
was cleaning up). Fluctuations in gas-lift
rates and wellhead pressures can have an
impact on oil production splits from the
two zones, explaining the slight variation
in the more frequent geochemical analy-
sis, Fig. 2. Furthermore, the geochemical
sample obtained on Oct. 10, 2008, and the
production profile (PLT) started the same
day were over 10 hours apart, explaining
the small differences between those points.
The well operator submitted a report
of these findings to the AOGCC. The
AOGCC then agreed that geochemical
fingerprinting could be utilized routinely
going forward for oil allocation of this well.
As in the previous case study, a key ad-
vantage of geochemical allocation is that
the seven allocations that were performed
on seven different dates had a combined
cost that was far less than the cost of ei-
ther of the two PLT profiles.
Oil/gas well, Oklahoma. This ex-
ample shows the geochemistry-derived
production allocation results for oil pro-
Fig. 2. Well S-26
comparison of
geochemistry-
derived production
splits with
Production Log
(PLT)-derived
production splits.
The average Aurora
oil split over the
commingled test
period from the
two PLTs was 53%.
This value closely
matches the average
of the geochemical
analysis Aurora oil
split.
0
10
20
30
40
50
60
70
80
90
100
8/1/08 8/31/08 9/30/08 10/30/08 11/29/08 12/29/08 1/28/09 2/27/09
Geochem % Aurora Oil Geochem % Prudhoe Oil
10/10/08 PLT Aurora Oil % 10/10/08 PLT Ivishak Oil %
2/16/09 PLT Aurora Oil % 2/16/09 PLT Ivishak Oil %
W
e
i
g
h
t

%
Date
S-26 Aurora vs. Ivishak oil splits
Fig. 3. This well
commingles
production from
two reservoirs.
Geochemical
allocation results
demonstrate that
during the rst
year, there were
signicant changes
in the contribution
of each zone to
the commingled
production from the
two intervals. These
data were acquired
at <5% the cost of
production logging.
0
10
20
30
40
50
60
70
80
90
100
8/29/10 1/7/11 4/17/11 7/26/11
W
e
i
g
h
t

%
Date
Zone 1
Zone 2
Oklahoma well: Zone 1 vs. Zone 2 oil allocation
Wells discussed in this article involved dead oil samples
samples collected at the surface at ~1 atmosphere pressure
that were analyzed at Weatherford Laboratories using a gas
chromatograph. GC peak data were processed to calculate the
production allocation splits, using a proprietary geochemical
production allocation software package. The allocation algo-
rithms in that software are based on the following approach.
If there are no systematic sources of error, the relationship
between a GC peak height Y (measured in the GC trace of
a commingled oil) and the GC peak heights X of the cor-
responding peaks in the m end-members oils being com-
mingled is given by a linear relationship of the form:

Y =
1
1
+
2
2
+
m
m
Production allocation is the process of determining the
values of .
In reality, there are multiple sources of error, including the
following:
Analytical error in measuring the height of each GC peak;
Error associated with potential contamination of GC
peaks; and
Error associated with the non-ideality of the samples
chosen as end members. For example, end member oils
are often taken not from the same well as the commin-
gled oil, but rather from nearby single-zone producing
wells that may not be laterally continuous with the com-
mingled well.
Because of the various sources of error, certain GC peaks
will do a better job than others at allocating each zones con-
tributions to a commingled oil. It is impossible to know, in
advance, which GC peaks will do the best job of the poten-
tially hundreds available in an oil allocation project.
The problem thus becomes one of linear regression. Spe-
cifically, given a set of samples containing a value for each
independent variable and the corresponding value of the de-
pendent variable, the values must be computed in a rela-
tionship of the form:

Y =
1
1
+
2
2
+
m
m
+eps
Where, eps represents the error that is not captured by the
linear relationship.
Linear regression can be used to converge upon a set of
values that minimizes the sum of the square of the errors. For
example, as noted by McCaffrey, et al. (1996):
=
1
( )
1
1
Y
is a simple way to derive an estimate of the vector. In numer-
ous unpublished studies conducted between 2000 and 2010,
we have found that significantly better estimates of the vec-
tor can be derived by various optimization techniques that
take advantage of the fact that there are far more GC peaks
that can be measured in an oil (~1,000) than there are zones
being comminlged. Those techniques are described in Mc-
Caffrey, et al. (2011).
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O
I
-
2
1
5
-
1
-
0
0
5
duction from a well in Oklahoma, which
commingles production from two reser-
voirsZone 1 and Zone 2, Fig. 3. Ap-
plication of geochemical allocation to this
well was subject to regulatory approval.
Prior to commingling production, blind
mixing tests were performed. Regulatory
approval for commingling was granted,
based on successful completion of the
blind mixing tests.
The resources in the two reservoirs
penetrated by this well have different equi-
ty ownership. Dead oil samples are collect-
ed monthly from the well, for geochemical
allocation of the contribution of each zone
to the commingled sample. The geochem-
istry-derived allocation results are used
to determine monthly revenue payments
to equity owners of the resources in the
two zones. These monthly, geochemistry-
based allocation data are acquired at less
than 5% of the cost of production testing.
Because this is a pumping well, production
logging is not possible. Production logging
would require mechanical isolation and in-
dividual production testing of each zone.
Therefore, were it not for geochemical al-
location, the operator would not be able to
commingle these zones.
Allocation results from this well dur-
ing the first year of production demon-
strate significant changes in the contri-
bution of each zone to the commingled
output from the two intervals, resulting
in changing monthly revenue payments
to the equity owners of each zone. When
commingled production was initiated for
this well, the initial allocation results were
consistent with expected flowrates from
each zone, based on a comparison of allo-
cation data with data for tested flowrates
from each zone, when the zones were pro-
duced separately. As total output from the
well changed over time, the geochemical
allocation provided the only way to know
the contribution of each well to the com-
mingled production stream.
GEOCHEMICAL ALLOCATION
ADVANTAGES
The cost advantages of using oil geo-
chemistry, or oil fingerprinting, versus
conventional e-line production logging
to allocate commingled production are
illustrated in the cited case studies. Geo-
chemical techniques for allocating com-
mingled production from multiple zones
in a single well typically result in cost sav-
ings of 95% or greater, compared to con-
ventional e-line production logging. The
cost savings are even more dramatic when
compared to those for coiled-tubing-con-
veyed or tractor-conveyed PLTs.
The low cost of geochemical produc-
tion allocation allows field engineers to
monitor output frequently over long peri-
ods (e.g., weekly, monthly, quarterly), al-
lowing early identification of zone perfor-
mance problems. The much higher cost of
production logging limits that technique
to infrequent use. Therefore, production
logs typically provide only a snapshot of
the production origin at the time the log
was run, rather than a continuous perfor-
mance history.
Geochemical techniques are applicable
to highly deviated and horizontal wells,
in addition to vertical wells. By contrast,
production logging interpretation is prob-
lematic in highly deviated wells. Geo-
chemical techniques can be applied to all
types of pumping wells, including those
with tubing-deployed electrical submers-
ible pumps, and progressive cavity pumps.
Other than those with unusual completion
styles, such as Y-block completions, most
pumping wells cannot accommodate a pro-
duction logging tool, because the pumping
apparatus prevents logging tool access to
the underlying perforated interval.
Channels, near-wellbore faults and
failed bores from initial drilling can create
pathways by which oil from one zone can
enter the wellbore at a depth associated
with a different zone. Production logging
results in misallocation of oil in these situ-
ations, if only wellbore entry is considered.
In contrast, geochemical techniques are
able to distinguish production from the
various zones, regardless of entry points.
Because the geochemical approach
relies only on produced oil samples ob-
tained at surface, there is no risk of stick-
ing a tool in the well. The geochemical
allocation approach can also be used to
assess the contribution of multiple fields
to commingled pipeline production
streams. Advantages include the ability to
allocate in the absence of flowmeter data,
and the ability to identify problems with
flowmeter data.
REFERENCES
McCafrey, M. A., H. A. Legarre and S. J. Johnson, Using
biomarkers to improve heavy oil reservoir management:
An example from the Cymric feld, Kern County, Califor-
nia, AAPG Bulletin, v. 80, 1996, pp. 904-919.
McCafrey, M. A., D. H. Ohms., M. Werner, C. Stone, D.
K. Baskin and B. A. Paterson, Geochemical allocation of
commingled oil production or commingled gas produc-
tion, Society of Petroleum Engineers Paper 144618,
2011, pp. 1-19.
ACKNOWLEDGEMENT
Tis paper was prepared, in part, from SPE 144618,
presented at the SPE Western North American Regional
Meeting (Anchorage, Alaska, USA, May 711, 2011).
We thank BP Exploration Alaska Inc., Alta Mesa Services,
LP, and Weatherford Laboratories Inc. for permission to
publish this work.
MARK MCCAFFREY is a Senior
Technical Advisor at
Weatherford Laboratories. He
has 21 years of industry
experience, including 11 as the
founder and President of
OilTracers LLC, a rm which
was acquired by Weatherford in 2010. He has a
BA in geology from Harvard University and a
PhD in chemical oceanography from the
Massachusetts Institute of Technology / Woods
Hole Oceanographic Institution Join Program.
DANIELLE OHMS is currently Technology Lead
for BP Exploration (Alaska) Inc. She has worked
as a Production Engineer in Alaska for the last
23 years. She has a BS in petroleum engineering
from the University of Texas, and an MS in
environmental engineering from the University
of Alaska, Anchorage.
CHRISTOPHER STONE is a Production Engineer
with BP Exploration Alaska (Inc) since 2005.
He has a BS in chemical engineering from the
University of Minnesota Duluth, and an MS in
petroleum engineering from the University of
Alaska Fairbanks.
DAVID BASKIN is a Senior Petroleum
Geochemist at Weatherford Laboratories. He
received a BS degree in geology from San Jose
State University and continued graduate studies
at both California State University at Fullerton
and California State University at Long Beach.
He has over 37 years of industry experience at
Chevron (ChevronTexaco) and OilTracers LLC.
BROOKS PATTERSON is a Senior Petroleum
Geochemist at Weatherford Laboratories.
He has a BA degree in earth science from
California State University at Fullerton and an
MS in geology from University of California
at Riverside. He has over 35 years of industry
experience at Chevron (ChevronTexaco) and
OilTracers LLC.
DAVID REISDORF is a Senior Reservoir
Engineer with Alta Mesa Services, LP. He has
over 36 years of reservoir and production
engineering experience in Oklahoma, Texas,
Florida and Alaska. He received BS and MS
degrees in chemical engineering from the
University of Arizona.
An alternative approach was developed that allocates
commingled production using a large number of GC
peak heights (not ratios) to derive a linear-algebra-based
allocation result . . . This new approach does not require
analysis of artificial mixtures of end-member oils and can be
applied to any number of mixed zones.
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NERGY
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FAYETTEVILLE
REMAINING POTENTIAL
AWAITS HIGHER PRICES
KURT ABRAHAM, Executive Editor
Over the last several years, its been a roller-
coaster existence for the Fayetteville, the second-
longest producing shale play in the U.S., exceeded
only by the Barnett in North Texas. Since May
2001, there has been natural gas production from
the Fayetteville, although drilling did not begin in
earnest until 2002 and 2003. At that time, South-
western Energy and its subsidiary, SEECO, Inc., re-
searched the characteristics of this play and found
that they could successfully apply horizontal drill-
ing and hydraulic fracturing practices that were
working so well in the Barnett.
The two firms began acquiring surface and min-
eral rights in the Arkoma basin, home to the Fay-
etteville. By the end of 2003, Southwestern Energy
had spent about $11 million and acquired roughly
3,300 acres. Applying horizontal drilling on a
wide-scale basis in 2004, the company suddenly
struck pay dirt on one well after another. Although
Southwestern and SEECO initially tried to keep
these results under cover, their subsequent leas-
ing frenzy soon became public. Several more op-
erators entered the Fayetteville, such as XTO (now
ExxonMobil), Chesapeake Energy and Petrohawk
Energy, plus smaller independents. Yet, the num-
ber of operators has been smaller and more select
than in the Barnett.
Capitalizing on their early bird status, South-
western and SEECO enlarged their presence
in the Fayetteville substantially in 2006 with a
$700-million infusion. The two firms reinforced
their devotion to this play the following year by
pouring another $900 million into further de-
velopment. Fueled by high natural gas prices,
the Fayetteville by 2008 was figuratively on fire,
as additional companies boosted their activity.
Then came the U.S. economic recession, and gas
prices fell dramatically in response to lower de-
mand. Operators hung in with the Fayetteville
during 2009, expecting that the economic situ-
ation would get better, sooner than later. Even
so, activity did slow down, as companies shifted
World Oil/MONTH 201163
A rig drills in the Fayetteville shale
of Arkansas on behalf of dominant
operator Southwestern Energy. The
rm now has nearly one million
acres under lease in the play.
SHALE ENERGY / FAYETTEVILLE
capital to newer shale plays. This was
not due to issues with the Fayetteville,
itself, which still had excellent long-term
economics. Rather, it was an attempt by
these firms to build low-cost positions
in other areas before demand for leases
would make it impossible.
Nevertheless, a quick economic recov-
ery failed to materialize. As the recession
lingered and gas prices remained stuck in
a $3.50-to-$4.50/Mcf range, the Fayette-
villes short- to medium-term attractive-
ness began to deteriorate. By late 2011,
two major players had exited, selling their
gas holdings in favor of more liquids-rich
plays elsewhere. The remaining operators
also reconsidered their plans, scaling back
activity until gas prices recover to a more
consistently sustainable figure.
GEOLOGICAL PARAMETERS
The Fayetteville is an unconven-
tional natural gas reservoir situated on
the Arkansas side of the Arkoma basin.
Its thickness ranges from 60 to 575 ft,
and average depth is between 1,450 and
6,700 ft. This play is a Mississippian-age
shale that is the geologic equivalent of
the Caney shale found on the Oklahoma
side of the Arkoma basin and the Barnett
shale of north Texas.
Stretching across Arkansas from
about Fort Smith, east to beyond Little
Rock, the Fayetteville is approximately
50 miles wide from north to south, Fig.
1. The original, most active area of shale
gas development has been from western
Conway County through eastern White
County. Development further to the east
has proceeded at a slower pace, because
the shale is considerably deeper, making
gas extraction less economical.
Geologists say that the Fayetteville
covers about 4,000 sq mi. Estimates of to-
Fig. 1. The Fayetteville
shale extends from the
Arkansas/Oklahoma
border to east/
northeast of Little
Rock, cutting a roughly
50-mi-wide swath.
Arkansas
Ashley
Baxter
Benton
Boone
Bradley
Calhoun
Carroll
Chicot
Clark
Clay
Cleburne
Cleveland
Columbia
Conway
Craighead
Crawford
Crittenden
Cross
Dallas
Desha
Drew
Faulkner
Franklin
Fulton
Garland
Grant
Greene
Hempstead
Hot Spring
Howard
Independence
Izard
Jackson
Jeferson
Johnson
Lafayette
Lawrence
Lee
Lincoln
Little River
Logan
Lonoke
Madison
Marion
Miller
Mississippi
Monroe
Montgomery
Nevada
Newton
Ouachita
Perry
Phillips
Pike
Poinsett
Polk
Pope
Prairie
Pulaski
Randolph
St. Francis
Saline
Scott
Searcy
Sebastian
Sevier
Sharp
Stone
Union
Van Buren
Washington
White
Woodruf
Yell
Arkansas
CONTINUOUS MOVEMENT
WITH FORWARD OR
REVERSE CIRCULATION
LARGER O.D. TUBING
ENABLES HIGHER
PUMP RATES
DEEPER REACH
INTO LONG
LATERALS
2012 Halliburton. All Rights Reserved.
FAYETTEVILLE / SHALE ENERGY
tal resources range from 20 Tcf to 32 Tcf.
The U.S. Energy Information Administra-
tion said that average well spacing is eight
per square mile, while average, ultimate
recovery is 2.25 Bcf per well.
According to the Powell Shale Digest, a
study of gas output in the play shows that
as of Dec. 1, 2011, cumulative produc-
tion since May 2001 has been 2.51 Tcf
from 3,730 producing wells. Production
has extended over 10 counties, although
the bulk of output has been in just five
from largest to smallest, they are Van
Buren, White, Conway, Cleburne and
Faulkner Counties. Together, they con-
tain 96% of Fayetteville producing wells
and account for 98% of cumulative gas
production. As of December, 3,707 of
3,730 producing wells were operated by
just three companiesSouthwestern/
SEECO, BHP Billiton (former Chesa-
peake properties) and XTO. Combined,
these firms controlled 99.8% of cumula-
tive production.
MAJOR TRANSACTIONS
As previously alluded, the U.S. reces-
sion that began in 2008 took a significant
toll on Fayetteville operators, as natural gas
prices languished. By late 2010, the bloom
was off the rose for some firms, while oth-
ers consolidated their holdings.
On Dec. 23, 2010, ExxonMobil,
through XTO, paid $650 million for
Petrohawks gas wells and pipelines in the
Fayetteville. Petrohawk said that its Ar-
kansas assets had been producing about
98 MMcfgd. The sale of the wells, alone,
was $575 million. The purchase of the
pipelines collecting gas from these Fay-
etteville wells amounted to $75 million.
The Petrohawk purchase boosted
XTOs Fayetteville holdings by about
40%. The price paid for estimated,
proved reserves of 299 Bcf worked out
to approximately $1.92/Mcf. The trans-
action gave ExxonMobil access to an ad-
ditional 175,000 net acres in the Fayette-
ville, building on its existing 380,000-net
acre position.
Meanwhile, as late as second-half
2009, Chesapeake was the second-larg-
est producer in the Fayetteville and had
445,000 net acres under lease. Further-
more, the company had 4,100 drilling lo-
cations and operated 14 rigs. But by late
2010, the firm was ready to exit this play.
On Feb. 21, 2011, Chesapeake Energy
announced the sale of its leasehold and
other properties in the Fayetteville to Aus-
tralias BHP Billiton Petroleum (BHP) for
$4.75 billion. The deal included Chesa-
peakes interest in roughly 487,000 net
acres of leasehold and producing natural
gas properties. It also included existing
net production of about 415 MMcfd of
gas equivalent, plus midstream assets that
included 420 mi of pipeline. Chesapeake
had proved Fayetteville gas reserves of 2.5
Tcf as of Sept. 30, 2010, indicating a value
of $1.93/Mcf of proved reserves. Howev-
er, pipeline assets are included in the sale
price, so if one backs out $300 million in
value for these assets, then the proved re-
serves are valued at $1.82/Mcf.
OPERATOR ACTIVITY
Despite recent downward revisions
by Wall Street analysts for gas prices in
the U.S. during 2012, Fayetteville pro-
ducers dont seem quite ready yet to
completely halt drilling plans in this
gas playat least not for the moment.
One thing that will prop up activity is
the fact that operators still must fulfill a
fair number of drilling obligations. Fur-
thermore, unlike past downturns, when
operators literally ceased drilling as gas
prices dropped below consensus break-
even levels, companies can still make
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and, when coupled with the Halliburton Pinpoint
stimulation, you can accurately place fractures and
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PowerReach service coming to a shale near you.
Extended-reach
horizontal wells
present complex
challenges.
some semblance of a profit in the current
low-price environment by drilling at a re-
duced level. Overall, the three largest pro-
ducersSouthwestern, BHP and XTO
(ExxonMobil)have said that they will
still spend at least a combined figure of
$3 billion on projects in the Fayetteville.
Accordingly, here are the latest plans and
activity by those leading operators.
Southwestern/SEECO. By far and
away the largest Fayetteville operator,
Southwestern has the luxury of develop-
ing its prime leasehold positions while
enjoying the freedom brought by strong
cashflow and attractive hedging arrange-
ments. The company holds roughly
916,000 net acreas in this shale play, with
the main focus concentrated on Cleburne,
Conway, Faulkner, Van Buren and White
Counties of central Arkansas. Reserves
are estimated at 4.345 Tcf of gas.
The firm has made consistent progress
from year to year in drilling and develop-
ing the Fayetteville, Fig. 2. During 2010,
Southwestern produced about 305.2 Bcf
of gas equivalent, up from 243.5 Bcfe in
2009. The company placed 553 operated
wells onstream during 2010, all of which
were horizontal wells fracture-stimulated
with slickwater.
For 2011, Southwestern had drawn
up a drilling plan that called for 440 to
450 operated wells. However, by the end
of the first nine months of last year, the
firm had already put 418 operated wells
on production, including 132 in the third
quarter. Like the year before, all of these
wells were horizontal, fracture-stimulated
with slickwater. Drilling efficiency im-
proved again, Fig. 2. As of late 2011, the
companys gross production rate in the
Fayetteville had jumped to 1.9 Bcfgd, up
from 1.5 Bcfgd a year earlier.
This year, Southwestern expects to de-
vote $1.4 billion of its $2.34-billion capi-
tal budget to the Fayetteville. In tandem,
the firm has heavily weighted its capital
spending toward low-risk development
drilling. As of a February update, the
company now expects to drill 370 to 380
net wells in Arkansas during 2012, com-
pared to 479 last year.
BHP. Expectations for BHPs Arkan-
sas acreage have cooled off a bit since the
firm acquired Chesapeakes Fayetteville
holdings in June 2011. Last fall, BHP Pe-
troleum CEO Mike Yeager had predicted
that the Australian company would in-
crease drilling in Arkansas during both
2012 and 2013. At the time, Yeager had
said that BHP planned to boost drilling in
the Fayetteville to 20 rigs, starting in Janu-
ary 2012. This would have been more
than double the nine operating rigs in
2011. The rig increase had been slated as
part of $1 billion in investment that BHP
had planned for this year.
Now, however, all that boundless opti-
mism has subsided, along with the futures
price for natural gas. In a presentation to
financial analysts last month, BHP Billi-
ton Ltd. CEO Marius Kloppers said that
the holding company is now selectively
developing the most productive areas in
our dry gas fields. Kloppers said BHP
will shift its efforts toward liquids-rich
plays like the Eagle Ford shale in south-
ern Texas. Since that meeting with ana-
lysts, BHP has announced plans to trim
its drilling presence in the Fayetteville by
three or four rigs, down to five or six, as
opposed to nine last year.
XTO (ExxonMobil). Since acquiring
XTO in 2010, ExxonMobil has acquired
additional acreage in the Fayetteville and
now has about 560,000 net acres under
lease. So far, the firm has been tight-
lipped about its planned activities for
the Fayetteville this year. However, in a
speech to the SPE Unconventional Gas
Conference last June in Houston, XTO
President Jack Williams confirmed that
the companys Fayetteville drillwell
inventory (potential drilling locations)
is now in excess of 10,000 wells. Fur-
thermore, ExxonMobil has stated pub-
licly that it estimates that it can double
production from the companys various
shale and tight gas plays over the next de-
cade. During 2010, XTOs gross Fayette-
ville output was about 250 MMcfgd.
TECHNOLOGY APPLICATIONS
As one of the earlier U.S. shale plays,
the Fayetteville has built up a sizeable
track record over the last 10 years, with
several thousand wells having been
drilled. In the process, operators have
run into a number of technical challeng-
es requiring innovative solutions. The
following items summarize some recent
technical applications.
Multi-stage fracturing system in-
creased production in Fayetteville
formation. In the Fayetteville, Baker
Hughes FracPoint multi-stage fracturing
system provided a completion method
using packers to isolate sections of the
wellbore (stages) and frac sleeves to direct
the frac treatment to the desired stage,
Fig. 3. Use of this type of completion
eliminated the need for cementing the lin-
er, coiled tubing operations and wireline
operations, while significantly reducing
overall pumping time.
Upon reaching the setting depth, a set-
ting ball was circulated down to the ball
seat sub. The appropriate amount of pres-
sure was applied to set the hydraulically
actuated openhole packers and casing
packer. By continuing to pressure up, the
running tool was released, and the run-
ning string was pulled out of the well. At
this point, the rig was moved to the next
location. One month later, the fracturing
crew was called out to location, and the
fracturing began. The pressure-activated
sleeve (P-sleeve) was opened first by sim-
ply applying pressure, and the first frac
was performed.
Once the frac was complete for this
stage, the ball corresponding to the sec-
Fig. 2. Over the last ve years, Southwestern Energy and other operators have made continuous
improvement, drilling longer laterals in less time while containing costs, and boosting production
and reserves.
Lateral length Days to drill
(in Bcfe)
Reserves Well cost
($ in millions)
17
14
12
11
4,528
4,889
4,100
3,619
4,345
3,117
(in ft)
$2.9
$3.0
$2.9
$2.8 $2.8
8
2,657
716
1,545
2007 2008 2009 2010 2011
9M
2007 2008 2009 2010 2011
9M
2007 2008 2009 2010 2007 2008 2009 2010 2011
9M
DID YOU KNOW
YOU MIGHT BE
ASLEEP AT THE
WHEEL WITH
EYES WIDE OPEN.
TIP No. 1
HSE
Fatigue can be fatal. Especially when
youre driving. And one problem is, you
might not even know it. Fatigue can
sometimes induce a mental state in
which drivers imagine certain conditions
exist when they really dont. Sudden
reactions to those imaginary conditions
can result in very real disasters.
To help avoid fatigue behind the wheel,
never use drugs or alcohol when driving.
Pull well off the road and rest if you
feel fatigue coming on. Make frequent
stops on extended trips. Traffc accidents
increase dramatically after approximately
7 hours of driving. Dont push it. If
youre feeling less than 100 percent,
its best to not drive.
At Halliburton, solving customer
challenges is second only to keeping
everyone on the job safe and healthy.
You can fnd more safety tips at
www.halliburton.com/HSE.
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ond stage was dropped into the flow
path without shutting down the pump-
ing operation. When the ball seated for
the second stage, pressure was applied to
open the sleeve, and the second fracture
was started. This process was repeated
until all eight stages were successfully
fractured, using 1.25 million lb (566 990
kg) of sand, and rates of up to 80 bbl/
min. Once the well was put on produc-
tion, the initial output was more than
five times the group average of offset
vertical wells.
Efficiently developing Fayetteville
shale gas reserves: Percussion drilling
solves application challenges/reduces
drilling costs. Recently, a Fayetteville
operator completed several high-flowing
gas producers in White County. As de-
scribed in a recent SPE paper by several
Schlumberger authors, the multiple wells
required to efficiently develop the gas re-
serves are usually drilled from one pad.
To reduce costs and help maintain hole
verticality, the operator has been drill-
ing the surface and vertical intermediate
hole sections with percussion air tools.
The advantages of drilling with air as the
circulating medium, rather than mud, are
significant. Percussion drilling delivers
faster ROP compared to rollercone bits,
and reduces mud costs and incidence of
lost circulation.
Challenges in the intermediate section
include potential hole deviation from ver-
tical and lithology/formation issues. The
overburden is composed of highly inter-
bedded shale, and hard, abrasive sand-
stone that can significantly reduce bit life.
The sandstone section is responsible for
dulling the hammer bits cutting struc-
ture, reducing its ability to accumulate
additional footage while slowing ROP.
Historically, the hole section has required
up to four bits to reach TD.
To extend hammer bit life and increase
total footage capabilities, an innovative
overlapping/adjacent gauge row layout
was designed and manufactured. The new
hammer bit was run with good results. An
engineering analysis was performed, com-
paring the average footage drilled with the
new-style bit on 73 runs versus 196 runs
with conventional hammer bits. Utilizing
the new bit technology enabled the opera-
tor to drill approximately 58% more foot-
age at high ROP. The increased durability
has reduced the number of bits/trips re-
quired to complete the interval.
Fig. 3. Use of a new multi-stage fracing system
in the Fayetteville reduced pumping time
during the procedure and ultimately increased
gas production from the afected wells.
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REGIONAL REPORT
INDIA
After China, India is the leading country in the eastern hemi-
sphere, with an enormous economic incentive to explore for oil
and gas. Over the last five years, Indias import dependency for
crude oil and petroleum products has increased from 71.9% to
76.5%. With a burgeoning middle class switching from firewood
and charcoal stoves to cooking with gas, and from riding scoot-
ers to driving automobiles, the demand for oil has increased
from 2.1 MMbopd in 2000 to 3.2 MMbopd in 2010. Natural
gas consumption has increased from 750 Bcf in 2000 to 2.3 Tcf
in 2010, Fig. 1. The countrys oil production was 750,000 bpd,
and natural gas production was 1.8 Tcf in 2010.
The history of oil and gas exploration on the Indian subcon-
tinent is one of tantalizing discoveries from one decade to the
next, but without the momentum to propel the country into a
major producer. In fact, the first oil discovery took place in Dig-
boi, located in the northeastern state of Assam, in 1889 (see Oil
India Ltd. sidebar on page 75). For a long time, international
oil companies had dismissed Indias hydrocarbon potential. As
a result, only 30% of Indias sedimentary basins have been ex-
plored. In 1974, Indias public sector Oil and Natural Gas Cor-
poration (ONGC) discovered the Bombay High field on the
west coast of India. Ignoring pessimism of experts, the govern-
ment of India opened up the country for exploration by private
and international companies during the late 1990s and made a
flurry of discoveries at the beginning of the new century, par-
ticularly Reliance Industrys KG-D6 discovery off the east coast
in 2002, and Scottish minnow Cairn Energys discovery of the
Mangala field in the desert state of Rajasthan in 2004.
While exploration activity has remained steady with 27 jack-
ups and seven drillships drilling, the pace of major discoveries
has slowed, with emphasis changing to reversing production
declines by seeking technical assistance from international oil
companies. In February 2012, the Indian government approved
BPs agreement with Reliance to pay $7.2 billion for a 30% stake
in the companys 23 oil and gas blocks, including the KG-D6
field. ONGC is reportedly at a nascent stage of discussions to
tie up with ConocoPhillips for joint exploration in 19 deepwa-
ter oil and gas blocks, and also undertaking shale gas explora-
tion in India and abroad. Cairn Energy has the technical exper-
tise, but in 2011, the company divested 58.5% of its investment
After a urry of discoveries in 2002-04, oil and gas operators in India now have twin aims:
bring to early production new elds and enhance production from mature elds.
PRAMOD KULKARNI, EDITOR
From left: Transoceans drillship Discoverer Seven Seas is drilling for ONGC on Indias east coast. A Cairn Energy technician monitors production activity at the Mangala Processing
Terminal in Indias Rajasthan state. Reliance Industries is getting technical assistance from its minority partner, BP, to reverse declining production from the KG-D6 eld.
in India to London-based mining company Vedanta Resources,
to shift its exploration focus to Greenland. Cairn India is also
exploring offshore Sri Lanka.
LICENSING ACTIVITY
To spur exploration activity, India launched a New Explora-
tion Licensing Policy (NELP) in 1998 and has conducted nine
licensing rounds under the aegis of the Directorate General of
Hydrocarbons (DGH). According to the DGH, a total of 291
exploration blocks have been awarded, of which 228 are in op-
eration, Fig. 2. For the ninth round, the DGH has received 33
bids and expects to award the blocks by March 2012. Under
NELP-IX, 34 blocks (8 deepwater, 7 shallow water and 19 on-
shore) were offered with a total area of 88,807 sq km. By 2015,
the government is planning to release all of the prospective sedi-
mentary basins for exploration. For the time being, the govern-
ment has postponed plans to hold the countrys first licensing
round for shale plays.
ONGC
As seen in Fig. 2, Indias leading public sector oil company
is competing effectively against private and international oil
companies to win exploration blocks in both the onshore and
offshore areas. ONGC is also participating as a partner in JVs
with other operators, including Reliance and Cairn.
ONGC currently operates 30 seismic crews, 121 drill-
ing rigs (87 onshore and 34 offshore) and 73 logging units,
Table 1. Through these resources, ONGC made 24 discoveries
in FY 2011 and achieved an ultimate reserve accretion of nearly
600 MMboe, the highest in the last two decades. ONGCs re-
serve replacement ratio is 1.76. ONGCs initiatives for 2012
and beyond include the monetization of its discoveries in the
KG basin on the east coast and development of the Daman dis-
covery on the west coast, Fig. 3. Production from the GS field
has already begun, and the GI field is expected to start produc-
tion in May 2012, with other fields to follow in 2012-13 and
thereafter. These gas discoveries are to be developed based on a
hub concept with facilities placed at shallower water depths in
the GS-29 area. Off the west coast, ONGC plans to spend $4
billion in developing about 4 Tcf of gas reserves off the city of
Daman. The Daman cluster constitutes the B-12 North, B-12
South, C-26 and SD fields. ONGC intends to build a terminal
about 100 km north of Mumbai to receive and process the gas.
High on ONGCs list of priorities are improved oil recovery
(IOR) projects designed to reverse declining production from
its Bombay High, Gujarat and Assam fields. The company com-
pleted 16 of 21 projects in 2011, to increase its recovery factor
from 28% in 2000 to 33.5% in 2011. Last year, it achieved an
incremental gain in production by 60.57 MMboe.
Meanwhile, ONGC is seeking a technology partner with
deepwater and IOR expertise. This need has been heightened
with the departure of BG, Statoil and Petrobras as its minority
partners in the KG basin fields. According to Indian news media
reports, ONGC is expected to tie up with ConocoPhillips for
joint exploration. Under the proposed deal, ONGC has offered
19 of its deepwater oil and gas exploration blocks in the Krish-
na Godavari basin, along with other offshore basins, including
Cauvery, Mahanadi and the Andaman and Nicobar basins.
ONGC is also seeking oil production with international ven-
tures through its OVL subsidiary. OVL has a total of 3.1 Bboe of
ultimate reserves in 12 assets in eight countries, including Rus-
sia, Kazakhstan, Venezuela and Sudan. OVL is producing from
Odoptu field in Sakhalin since September 2010. The current
production rate from the field is 54,000 bopd.
REGIONAL REPORT / INDIA
RELIANCE INDUSTRIES
An industrial conglomerate, which op-
erates the worlds largest refinery complex
in Jamnagar, Reliance Industries joined the
ranks of the Indian oil and gas industry with
its discovery of the KG-D6 field in 2002.
Reliance is currently producing gas from
the KG-D6 field at the rate of 45 MMsc-
md, and oil and condensates at the rate of
16,000 bpd. The company had expected to
produce 60 MMscmd, but is encountering
production declines. Reliance has blamed
the production drop on reservoir complex-
ities and a natural decline in reserves at the
field. The companys original field develop-
ment plan called for a total of 31 develop-
ment wells to be drilled by March 2012, but
only 18 of the 22 development wells have
been brought into operation, while five of
the wells at D1 and D3 have stopped pro-
ducing due to water and sand ingress. With-
out enhanced recovery efforts, gas produc-
tion is expected to decline to an all-time
low of about 22 MMcmd by 2013-14.
A technical team composed of Reliance
and BP geoscientists and reservoir engi-
neers is developing strategies to reverse
the decline. BPs entry into India came as
a result of a farm-in agreement that was ap-
proved by the Indian government in Febru-
ary 2012 to allow the IOC to gain a 30%
interest in 21 Reliance oil and gas blocks at
a cost of $7.2 billion, Fig. 4. Recently, the
Reliance-BP partnership gained approval
from Indian authorities for a $1.53-billion
plan to develop four satellite fields in the
block: D-2, D-6, D-19 and D-22.
In anticipation of shale E&P activity
in India, Reliance has acquired partner-
ships with three U.S. shale operators at a
total cost of $1.6 billionPioneer Natural
Resources in the Eagle Ford, and Chevron
and Carrizo Oil & Gas in the Marcellus.
While activity has slowed in the Marcel-
lus due to low U.S. gas prices, production
TABLE 1. DRILLING ACTIVITY OFFSHORE INDIA AS OF MARCH, 2012.
Rig Name Rig
Type
Owner Operator Water
Depth, ft
Drilling
Depth, ft
Aban Ice Drillship Aban Ofshore ONGC 2,000 20,000
Aban II Jackup Aban Ofshore ONGC 250 25,000
Aban III Jackup Aban Ofshore ONGC 300 20,000
Aban IV Jackup Aban Ofshore ONGC 300 21,000
Aban VII Jackup Aban Ofshore GSPC 250 20,000
Badrinath Barge Great Ofshore ONGC 600 20,000
Deep Driller 1 Jackup Aban Ofshore GSPC 375 30,000
Deep Sea Matdrill Jackup Jagson International ONGC 250 20,000
Deepsea Fortune Jackup Jagson International ONGC 300 25,000
Deepsea Fossil Jackup Jagson International ONGC 300 25,000
Dhirubhai Deepwater KG1 Drillship Transocean Reliance 12,000 35,000
Dhirubhai Deepwater KG2 Drillship Transocean Reliance 12,000 35,000
Discoverer Seven Seas Drillship Transocean ONGC 7,000 25,000
Discovery-I Jackup Jindal ONGC 350 30,000
Greatdrill Chetna Jackup Mercator Ofshore ONGC 350 30,000
Greatdrill Chitra Jackup Greatship ONGC 350 30,000
J.T. Angel Jackup Transocean ONGC 300 25,000
Kedarnath Jackup Great Ofshore ONGC 300 20,000
M.G. Hulme, Jr. Semi Transocean ONGC 5,000 25,000
Noble Charlie Yester Jackup Noble Corp. ONGC 300 20,000
Noble Ed Holt Jackup Noble Corp. ONGC 300 20,000
Noble Kenneth Delaney Jackup Noble Corp. ONGC 300 25,000
Platinum Explorer Drillship Vantage Drilling ONGC 10,000 40,000
Ron Tappmeyer Jackup Transocean ONGC 300 25,000
Sagar Bhushan Drillship ONGC ONGC 1,000 20,000
Sagar Gaurav Jackup ONGC ONGC 300 20,000
Sagar Jyoti Jackup ONGC ONGC 300 20,000
Sagar Kiran Jackup ONGC ONGC 300 20,000
Sagar Pragati Jackup ONGC ONGC 300 20,000
Sagar Ratna Jackup ONGC ONGC 300 20,000
Sagar Shakti Jackup ONGC ONGC 300 20,000
Sagar Uday Jackup ONGC ONGC 300 20,000
Sagar Vijay Drillship ONGC ONGC 1,000 20,000
Trident II Jackup Transocean ONGC 300 25,000
Trident XII Jackup Transocean ONGC 300 21,000
Virtue-I Jackup Jindal ONGC 350 30,000
Source: RigStar, World Oils Ofshore Rig Database
0
500
1,000
2000 2001
Production
Consumption
2002 2003 2004 2005
Indias oil production and consumption, 20002010
2006 2007 2008 2009 2010
1,500
T
h
o
u
s
a
n
d
,

b
p
d
2,000
2,500
3,000
3,500
Fig. 1. Consumption of both oil and gas are rising with oil production relatively at and gas production rising, but unable to keep pace with demand.
Production
Consumption
Indias natural gas production and consumption, 20002010
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
B
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ramp-up is expected in the liquids-
rich Eagle Ford play.
CAIRN ENERGY
The Scottish independent first
entered South Asia through a 1993
joint venture in Bangladesh and
discovered the Sangu gas field in
1996 in the Bay of Bengal. Cairns
fortunes improved in 1997 when it
made a deal with Shell to relinquish
its interests in Bangladesh for the
Rajasthan block (see Cairn Energy
sidebar on page 76). After a string
of 15 dry holes since 2000, Cairn
achieved a major oil discovery in
2004 at Mangala. Later, Cairn also
made significant discoveries at Bha-
gyam and Aishwariya fields. Cairn
holds 70% ownership of the Raj-
asthan block with ONGC owning
the remaining 30%. Oil production
from Mangala field commenced in
2009. In 2010, Cairn sold 58.5%
interest in Cairn India to London-
based mining company Vedanta Re-
sources, while continuing to hold
about 22%.
The Mangala crude, currently
produced at a rate of 125,000 bpd,
is transported via pipeline to the
Gujarat coast and then shipped to
coastal refineries in south India. As
the Mangala crude has high paraf-
fin content, Cairn is building the
worlds longest (590 km) insulated
and heated pipeline. Bhagyam field
commenced production in January
2012, proceeding to a plateau rate of
40,000 bopd. Development of Aish-
wariya field is underway and ex-
pected to commence production in
Fig. 3. ONGC is in the process of monetizing its discoveries on the east
coast that are adjacent to the Reliance discovery (left). Fields considered
for development on the west coast are Daman (Main), Daman (North),
C-24 and C-23.
1
2
3
4
5
6
7
9
8
10
11
10
CHATTISGARH JHARKHAND
BANGLADESH
MYANMAR
BHUTAN
C H I N A
N
E
P
A
L
P
A
K
I S
T
A
N
SRI
LANKA
HP-1
MP-1
MP-2
WB-1
GV-ONN-97/1
GV-
ONN-
2002/1
HF-ONN-2001/1
AN-DWN-2002/1
AN-DWN-2002/2
GV-ONN-2004/1
Kashipur Extn
Kashipur
GV-ONN-
2003/1
VN-ONN-
2003/1
DS-ONN-2003/1
AN-DWN-2003/2
AN-DWN-2005/1
A
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AN-DWN-2009/1
AN-DWN-2009/2
AN-DWN-2009/2
AN-DWN-2009/13
AN-DWN-2009/18
RAJASTHAN
BIHAR
MADHYA PRADESH
MAHARASHTRA
GUJARAT
UTTAR PRADESH
KARNATAKA
ANDHRA PRADESH
JAMMU & KASHMIR
ASSAM
TAMIL NADU
PUNJAB
WEST
BENGAL
HARYANA
A
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ORISSA
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LEGEND
PEL areas
ONGC
OIL
PVT/JV
CBM-I
Relinquished area
ONGC
OIL
PVT/JV
ML areas
CBM-II
CBM-III
NELP IX
A
N
D
A
M
A
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&

N
I
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O
B
A
R

I
S
L
A
N
D
S
Fig. 2. India is licensing prospective blocks through a series of licensing rounds scheduled to run until
2015. Shown here are areas currently under petroleum exploration license (PEL) or mining license (ML).
Exploration has also been extended to the Andaman & Nicobar Islands (southeast corner of the map) that
are under Indias jurisdiction. Source: DGH.
Fig. 4. Reliance Industries Chairman Mukesh Ambani (left) and BP CEO
Robert Dudley sign the farm-in agreement for joint project development
in India and abroad.
INDIA / REGIONAL REPORT
second-half of 2012. The company envisages an eventual, to-
tal production rate of 240,000 bopd from its Rajasthan fields.
Our successive discoveries in Sri Lanka have established
a working hydrocarbon system in the frontier Mannar basin,
Cairn MD Rahul Dhir said. This success demonstrates Cairn
Indias strong skill set, which we will continue to leverage for
future opportunities. With the new board now in place, Cairn
India remains well poised for the next phase of growth.
OTHER SOUTH ASIAN COUNTRIES
Pakistan. The latest oil production statistics for Pakistan
date back to 2009, when the country produced crude oil at the
rate of 55,000 bopd, but had to import 338,000 bopd to satisfy
local consumption. Pakistan does have natural gas reserves of
30 Tcf, but it faces a shortfall of 2.2 Bcfd. The country is hop-
ing to satisfy its growing gas needs by building a pipeline from
Iran by 2014, notwithstanding objections from the U.S. and Eu-
ropean countries which are in process of
imposing an oil and gas embargo against
Iran. Oil and Gas Development Com-
pany Ltd. (OGDCL) is the state oil and
gas company, and the international firms
active in Pakistan include BP, UK-based
Tullow and Hungarys MOL.
Bangladesh. In 2009, Bangladesh pro-
duced 5,000 bopd, but needed to import
90,000 bopd to support local consump-
tion. The country is more endowed with
natural gas, producing 2.04 Bcfd against a
demand of 2.52 Bcfd in 2011. The coun-
trys largest onshore gas field is Bibiyana,
operated by Chevron at the rate of 750
MMcfd. State operator Petrobangla is
seeking Russias Gazproms help to in-
crease production from its Titas gas field.
In a major blow to the countrys offshore
sector, Australian operator Santos drilled
two dry wells in the Sangu field in late
2011. Despite the failures, Santos is con-
tinuing its drilling activity. Meanwhile, Petrobangla approved
a PSC with ConocoPhillips in June 2011 to begin deepwater
exploration, with a 2D seismic survey over the prospective area.
There are, however, maritime disputes with both India and
Myanmar. The two neighboring countries have staked claims in
two-thirds of Bangladeshs 28 deepwater blocks.
Sri Lanka. An island nation, Sri Lanka has no oil and gas
production. In 1971, Gazprom carried out the first drilling in
the region without success. Sri Lankas first licensing round in
2007 for Mannar basin resulted in the awarding of one block to
Cairn India, Fig. 5. Cairns SL 2007-01-001 block is offshore
north west Sri Lanka and covers approx. 3,400 sq km in water
depths of 200 to 1,800 m. Cairns drilling program commenced
in August 2011 with a three-well exploration phase. The first
two wells discovered gas and condensates, but the third well
was plugged and abandoned as a dry hole. Cairn is planning to
enter a second phase of exploration in 2012.
RAJ KANWAR, Contributing Editor, South Asia
Oil India Limited (OIL) owes its genesis to human
courage and ingenuitydating back to the 19th cen-
turythat led to the commercial discovery of oil in
Digboi in the dense forests, swamps and river beds in
the extreme northeastern parts of Assam. Digboi still
retains the distinction of being the worlds oldest con-
tinuously producing oil field.
OIL was incorporated in February 1959 as a JV be-
tween the government of India and Burmah Oil Co.,
UK, to undertake the expansion of oil exploration that
led to the discovery of Naharkatiya and Moran oil-
fields in Assam. In October 1981, the Indian government took over 50% equity
of BOC and became OILs 100% owner. Today, OIL is a premier E&P national
company, producing crude oil at the rate of 3.90 MTPA, which is creditable since
most of its production is coming from aging northeast fields. There has, however,
been a steady growth in oil production during the last three years due to induction
of new technologies and accelerated exploration and drilling programs. The com-
pany also produces 8 MMscm of natural gas and 50,000 tonnes of LPG annually.
OILs systematic and scientific approach to exploration had achieved an im-
pressive success ratio of around 60% overall, explained CMD N. M. Borah. The
company has the latest 2D and 3D seismic data acquisition, processing and inter-
pretation resources. OIL has also gained considerable experience in aeromagnetic
and geochemical surveys in offshore and onshore areas.
Mr. Borah said OIL has formulated a Strategic & Corporate Plan, which will
be a key instrument to meet the demands of the changing environment. Thrust
areas for the future are to sustain production from existing fields, explore in the
northeastern frontier areas, acquire prospective exploration blocks and producing
properties both in India and overseas, and selectively diversify across the hydro-
carbon value chain.
Under NELP, OIL has already acquired 30 blocks in the first eight rounds of
bidding and has been provisionally awarded 10 blocks in NELP-IX round. Our
future strategy involves focusing on the acquisition of prospective exploration
blocks as well as producing properties overseas either independently or with a
joint venture partner, Mr. Borah elaborated. OIL already has presence in nine
countries overseas, including Libya, Gabon, Nigeria, Sudan, Yemen, Timor Leste,
Iran, Egypt and Venezuela.
OIL INDIA LIMITED: A PROUD HERITAGE
OIL CMD N. M. Borah
Fig. 5. Cairn Lanka has drilled two gas
discoveries and one dry hole in the rst phase
of its exploration program in Sri Lankas Mannar
basin.
RAJ KANWAR, Contributing Editor, South Asia
Rahul Dhir joined Cairn India in May 2006. Within three
months, he was promoted to managing director. After graduating
from the Indian Institute of Technology (IIT) Delhi, Dhir com-
pleted his MS from the University of Texas in Austin and then
earned an MBA from the University of Pennsylvanias Wharton
Business School.
The success story of Cairn India could rightly be attributed
to the entrepreneurial skills of its founder, Sir Bill Gammell,
the son of an investment banker and an international rugby
player. In 1981, Gammell founded Cairn Energy in Edin-
burgh, Scotland. The company conducted E&P operations in
the North Sea and acquired Conocos acreage to become the
largest UK onshore oil producer.
Rajasthan turned out to be Cairns lucky mascot, drilling 15
dry wells in Mangala before it struck pay dirt in January 2004,
and, in the process, made the largest onshore discovery in In-
dia in more than two decades. The journey from discovery to
production was accomplished despite the harsh climate, sand
dunes and limited infrastructure in the Rajasthan desert. Cairn
Indias IPO in 2006 attracted $2 billion. Under Dhirs steward-
ship, Cairn has grown in value to $13 billion. In August 2010,
the company commenced production from Mangala field.
According to Dhir, one of the major reasons for Cairns suc-
cess has been its business philoso-
phy, with accommodation and
adaptability as its twin fulcrum.
Right from the beginning, the
company had to work with other
operators in many parts of the
world, both multinational and na-
tional, and thus acquired the abil-
ity to adapt to differing cultures
and work ethics. Cairn India has
worked well with state govern-
ments, nongovernmental organizations and villagers in India
and, in the process, won the Blue Dart Global award for the
Best Corporate Social Responsibility Practice.
In December 2011, London-based mining company Ve-
danta Resources acquired a 58.5% stake in Cairn India at a
cost of $8.67 billion. Vedantas Navin Agarwal is now the new
Cairn India chairman while Rahul Dhir continues to be its
CEO and managing director.
About Cairn Indias continuing operations, Dhir reports,
The commencement of production from the Bhagyam field
is yet another significant milestone for the Cairn-ONGC
joint venture in Rajasthan, and the JV is well placed to fur-
ther develop the hydrocarbon-rich Barmer basin in Rajasthan,
increase oil production and create value for the nation.
CAIRN ENERGY: REMARKABLE GROWTH IN THE BARREN DESERT
Cairn India MD Rahul Dhir
Society of Petroleum Engineers
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An extreme HPHT
exploratory well reached TD
with optimal hole size, using
MPD methods to maintain an
overbalanced wellbore and
handle breathing events.
S.K. NAESHEIM, FRODE LEFDAL, and TOR
YVIND OFTEDAL, BG NORGE; and HENRIK
SVEINALL, Weatherford International Ltd.
The Mandarin East well exhibited the
most extreme temperature and pressure
ever encountered while drilling a Norwe-
gian well. Planning for this exploratory well
had anticipated a surface pressure of nearly
15,000 psi and extremely high tempera-
tures. To understand and control wellbore
dynamics while maintaining an overbal-
anced wellbore, operator BG Norge in-
stalled a managed pressure drilling (MPD)
system to provide early kick detection and
allow for wellbore breathing mitigation.
A key objective of using MPD was to
set the 97/8-in. production casing shoe as
close to the reservoir as possible, to allow
the optimal 8-in. section to be drilled to
TD within a very narrow (0.4-ppg) drill-
ing window. Well breathing events pre-
sented a significant challenge in this dif-
ficult wellbore environment, which made
pore pressure evaluation and kick detec-
tion critical to drilling.
Using the service companys auto-
mated MPD system to mitigate drilling
hazards allowed the entire 8-in. section
to be drilled to 5,933 m (19,465 ft) TD.
The system saved an estimated 10 rig days
and $7.5 million, while reducing risk and
improving safety. Controlling gas influxes
and precisely weighting up the mud sys-
tem saved five of those days when com-
pared to a conventional system.
PLANNING THE WELL
Once the constant bottomhole pres-
sure (CBHP) methodology was selected,
rigorous planning and preparation were
initiated. Prior MPD operations in Nor-
way were drilled while maintaining a stati-
cally underbalanced mud weight. Annular
friction and surface backpressure were
used to maintain bottomhole pressure
above the pore pressure. These existing
procedures could not be applied directly
to the Mandarin East well. Maintenance
of an overbalanced mud weight limited
the operational envelope to an extent,
but the extreme HPHT environment
prompted a cautious approach.
A project team of operator and MPD
personnel was established four months
ahead of the spud date. A rig survey de-
termined that major rig modifications
were required, because the area between
the rigs annular preventer and diverter
couldnt accommodate the rotating con-
trol device (RCD). Thus, the riser had to
be nippled down in the yard, and a new,
shorter, overshot mandrel and packer
assembly were manufactured to provide
the necessary space between the annular
and diverter.
Most of the existing MPD procedures
had to be modified, because underbal-
anced drilling (UBD) techniques could
not be applied at any stage, and surface
backpressure would only be applied if an
influx was detected. It was necessary to in-
clude the MPD procedures in the conven-
tional HPHT procedures and establish
guidelines for the use of MPD and con-
ventional rig equipment. Several work-
shops and HPHT training sessions were
conduced for rig and MPD personnel.
A full suite of integrated procedures
and decision trees was prepared. It was
decided that any kicks above 1 bbl would
be handled by the standard rig equip-
ment, due to a risk of taking a second-
ary kick, if a kick greater than 1 bbl was
circulated undetected to the surface, Fig.
1. The training, risk assessments, work-
shops and discussions with the crews
prior to spudding were a very important
factor in the success of applying MPD
techniques.
MPD RIG-UP
Two rig surveys were conducted to
determine where the MPD equipment
would be placed. Due to limitations on
variable deck load, space and overshot
mandrel modifications, none of the MPD
equipment could be rigged up before the
intermediate 135/8-in. casing had been run
and cemented in place. Norwegian regu-
lations also specified that electric cabling
on the rig must be upgraded to NORSOK
standards. A total of 2 km (1 mi) of new
cables had to be put in place before the
equipment could be installed.
The MPD equipment package fea-
tured an MPD manifold unit that includ-
ed computer-controlled chokes, Coriolis
flowmeters and an Intelligent Control
Unit. A passive, self-lubricating, large-
bore RCD (able to handle pipe up to 65/8-
in. OD) was connected to the BOP annu-
lar. A removable bearing assembly for the
RCD allowed for an 18.69-in. ID when
Record HPHT Norwegian well drilled with
MPD ow detection and control
Fig. 1. Conventional well control or MPD
methods? This decision tree describes
the path to making that call for engineers
drilling an extreme HPHT well ofshore
Norway.
Drilling in secure
standard (auto
control on)
chokes fully open
Inux larger
than 1 bbl
Inux detected
- Stop drilling
- Space out
drill string
- Close upper
pipe rams
- Stop drilling
- Reduce rotation
to 10 rpm
- Keep circulating
Divert returns to
MGS when inux
at 1,200 m
Evaluate if to
increase mud weight
to accommodate
increased pore
pressure
Further inux
detected
Combined
inux > 1 bbl
Commence well
control operation
Circulate
out Inux
Resume drilling
ensure chokes
are fully open
No Yes
No Yes
No Yes
the bearing was removed. The RCD mod-
el used is the first certified to API 16D
specification. Its pressure rating is 2,000
psi static and 500 psi at 200 rpm, Fig. 2.
The equipment package also included
various MPD sensors in the flowlines and
mud pits. Hard, flexible piping was used
to connect the MPD equipment to the
RCD, the rigs choke manifold, the trip
tank and the rigs poor-boy degasser. A
top flange tied the RCD back to the rigs
bell nipple. This equipment was rigged up
prior to drilling out of the 135/8-in. casing.
About four days were lost, because of rig
space limitations that required installa-
tion of MPD equipment after intermedi-
ate casing was landed.
DRILLING THE SECTION
An extensive flushing, pressure test-
ing and fingerprinting program was con-
ducted prior to drilling out of the 135/8-in.
casing. The MPD system was engaged for
the bottom 600 m (1,969 ft) of the 12-
in. hole to acquaint crews with new pro-
cedures and equipment in advance of the
lower, more difficult section.
Before drilling out of the 97/8 x 10
-in. production casing, the 17.5-ppg
OBM used for drilling out the cement and
floats was fingerprinted again. At 5,407 m
(17,740 ft), a LOT to 19.5 ppg was ob-
tained. Drilling continued toward the res-
ervoir at about 5,590 m (18,340 ft) with a
17.5-ppg mud weight circulating through
the MPD system. Background gas (BG)
was moderate, with levels of about 1%.
From approximately 5,555 m to 5,560 m
(18,225 to 18,241 ft), a gradual 1-to-5%
increase in BG levels was experienced.
Two flow checks were negative. At 5,562
m (18,248 ft), a sudden 10% increase in
the gas level was observed. Drilling was
stopped, and the well was circulated with-
out any significant decrease in gas levels.
Surface backpressure (SBP) was added
in 100-psi increments until the gas flow
stopped. The flow and density param-
eters stabilized at 350 psi SBP, indicating
a pore pressure of 18.5-18.6 ppg. To verify
an underbalanced state, the MPD choke
was opened briefly. The bottom-up gas
was about 33%, and underbalanced con-
ditions were confirmed.
The bit was held stationary at 5,562 m
(18,248 ft), and the mud weight was in-
creased from 17.5 ppg to 18.0 ppg in one
circulation cycle, to slowly reduce the SBP
on the MPD system to an equivalent 18.6-
ppg dynamic mud weight. To confirm
that formation integrity had not changed
at the casing shoe (19.5 ppg), the MPD
equipment was used to perform an open
hole leak-off test. The 19.1-ppg test figure
indicated that the pore-pressure/fracture
gradient window had been reduced to
only 0.5 ppg. Mud weight was ramped up
to 18.2, 18.3, 18.4 and 18.6 ppg to care-
fully maintain a bottom hole circulating
pressure less than 19.0 ppg, ensuring a 0.1
ppg safety margin, Fig. 3.
Total rig time was only 40 hr from the
initial small gas influx at 5,562 m (18,248
ft) through a sequence of steps that ac-
curately determined the pore pressure
(at 18.6 ppg) with full pressure control,
weighted up from 17.5 ppg to 18.6 ppg,
and accurately determined the new forma-
tion integrity. Handled conventionally, the
process might have taken 5 to 6 days. Keep-
ing ECD below 19.0 ppg required that the
flowrate be maintained below 200 gpm for
the remainder of the well. Small losses were
experienced through the sandy intervals.
After the gas incident had been re-
solved, confidence in the system increased.
It was decided to apply SBP on connection,
to reduce wellbore breathing and time re-
Fig. 2. The MPD
package, including
a choke manifold,
Coriolis owmeter,
intelligent control unit
and a rotating control
device.
Managed Pressure Operations International Ltd. (MPO)
introduces its new advanced Riser Gas Handling (RGH)
system. Developed to meet the safety and operational
challenges faced by the ever-increasing depths and
complexity of offshore wells, MPOs RGH system, in the
event of an inux, safely enables gas handling into the riser
above the subsea BOP by increasing the nominal rating limit
to 3,000psi; handling gas volumes of up to 100bbls above
the subsea BOP; and is deployed as part of the riser system
with little additional rig time for installation.
Re-calculate kick tolerances for your well design
with the ability to close your wellbore in less than
5 seconds with the patented Quick Close Annular.
The RGH system can easily be converted to a full
Managed Pressure Drilling system which enables precise
control of annular pressure throughout the wellbore and
saves substantially on your well costs and reduces NPT.
MPO is changing the way the industry applies managed
pressure drilling and continuous circulation systems.
The Riser Gas Handling system is another example of how
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MANAGED PRESSURE OPERATIONS
quired to circulate the gas out of hole. The
available pressure window did not allow
for a trip margin when pulling the BHA for
bit changes and coring. Swabbing the well
was avoided by stripping out pipe through
the RCD with a backpressure equivalent to
19.0 ppg from TD to approximately 1,400
m (4,593 ft) inside the production casing.
A heavy, 20.0-ppg mud cap pill was placed
at 4,000 m (13,123 ft) to give the neces-
sary margin for the rest of the trip. While
tripping back in, the pill had not strung out
much in the wellbore, and it had to be cir-
culated out in steps, very carefully, to avoid
losses. Although some losses were experi-
enced, they decreased toward the bottom
of the pill and completely stopped once the
pill was out of the hole.
Extensive use of the MPD system and
the application of new techniques for
tripping enabled the 8-in. hole to reach
TD at 5,932 m (19,463 ft) in 8 to 10 days
sooner than offset wells, where an inter-
mediate liner was required. The 8-in.
hole size benefited wireline logging, cor-
ing, fishing operations and DST testing,
compared to carrying out the same opera-
tions in a 6-in. or 55/8-in. hole. The MPD
stripping technique was much faster than
the standard process. It saved an estimat-
ed, minimum 12 hr on every trip.
The MPD operations were also used
in the well's P&A phase. Common experi-
ence is that placing balanced cement plugs
at almost 6,000 m (19,685 ft) is very dif-
ficult; often no plug is found when running
in to tag. On the Mandarin East well, with
a solid float in the cement string, the MPD
system was used to hold roughly 50-psi
backpressure on the plugs when pulling
out of the cement. This kept the plugs in
place, and, in fact, all the deep plugs were
tagged on the first attempt. In addition,
the 2,000-psi static pressure rating of the
equipment allowed its use to pressure-test
the cement plugs after tagging.
COST SAVINGS
Using MPD led to significant opera-
tional and economic advantages. In total,
using the MPD system saved 18.5 days or
about $13.9 MM. Less the time for MPD
rig-up and testing the net savings were 10
days and about $7.5 MM.
Four days, or about $3.0 MM, were
saved compared to a conventional set-up
when controlling gas influxes, determin-
ing the pore pressure and enabling con-
trolled weighting up. About tens days
($7.5 MM) were saved by successfully
drilling the 8-in. hole to TD in the nar-
row pore pressure/fracture gradient mar-
gin. The elimination of gas check trips
when pulling out for bit changes and cor-
ing saved 2 days ($1.5 MM) The MPD
system allowed stripping out with back-
pressure to control swabbing. Other sav-
ings include two days, because no dummy
connections were required, and a half-day
from conducting open hole LOTs and
pressure tests of cement plugs.
Time savings were achieved by locking
in the ECD pressure during connections,
which totally eliminated long circula-
tion periods. However, this is difficult to
quantify and is not included in the time
calculation. A total of 8.5 days was spent
on critical rig time for rigging up, flushing,
pressure testing, fingerprinting and carry-
ing out a full-scale drill.
OPERATIONAL ADVANTAGES
Using MPD and sophisticated flow
detection equipment allowed the well to
be safely drilled to TD in an 8 in. hole
with a 0.4-ppg pressure window. Doing so
added significant value to the formation
evaluation program, and in case of a DST.
The MPD system accurately de-
termined the pore pressure in the well
without the need for any wireline tools,
including a sudden rise in pore pressure
from 17.5 to 18.6 ppg. Locking in the
ECD pressure during connections in a
controlled, safe way eliminated all extra
circulation time resulting from gas from
wellbore breathing during connections.
MPD procedures can be tailored for
the application and can be used to save
time and cost, even when UBD is not
required. Using MPD-controlled strip-
ping techniques can eliminate the need
for the conventional pump out to the
shoe check trip. The MPD flowlines on
Fig. 3. Surface backpressure (SBP) (white line) was increased until fracture pressure
was reduced, compared to the original test. Once the SBP reached 500 psi, the red line
diverged from the blue line. The blue line shows that uid was injected into the formation
and that the leak of pressure was identied. Once SBP is removed, the well returns to a
normal state with no losses or gains.
Extensive use of the MPD system and the application of
new techniques for tripping enabled the 8-in. hole to
reach TD at 5,932 m (19,463 ft) in 8 to 10 days sooner than
ofset wells, where an intermediate liner was required. The
8-in. hole size beneted wireline logging, coring, shing
operations and DST testing, compared to carrying out the
same operations in a 6-in. or 5 -in. hole. The MPD stripping
technique was much faster than the standard process.
this extreme HPHT well raised crew con-
fidence, because gas was not escaping at
the bell nipple on every bottoms-up.
An advanced MPD flow detection de-
vice successfully detected an influx/loss
of less than bbl. The faith gained in the
MPD flow detection equipment eliminat-
ed the need for dummy connections nor-
mally used when drilling HPHT wells.
Lessons learned included the impor-
tance of a line large enough to avoid exces-
sive backpressure, when large gas volumes
are circulated through the rigs poor boy
system. Experience also illustrated that
it is essential to minimize off-center drill
pipe versus the rotary table. Misalign-
ment of more than 2 in. could lead to
time-consuming problems to install an
RCD sleeve or bearing. So that the ECD
pressure can be accurately locked in dur-
ing connections the system should use
a 2-in., 5,000-psi line from the rig stand
pipe to the MPD choke manifold.
The MPD flowlines should also be
tied in with the rigs trip tank system.
This allows circulation across the well-
head using the trip tank system with the
RCD element installed. A 2-in. NRV
should be installed in the line.
CONCLUSION
The change to a closed-loop, MPD
system provided the data and control to
drill within a very narrow window in this
extreme wellbore and still maintain an
overbalanced mud weight throughout
the operation. Understanding pore pres-
sure and well dynamics provided infor-
mation for an automated control system
using annular backpressure to effectively
manage small influxes and losses. This
capability allowed the well to reach TD
with the optimal hole diameter.
SIGVE KROHN NAESHEIM is
wells project manager for the
Knarr Development with BG
Group in Norway. He has
more than 30 years of
experience, in various
positions onshore and
ofshore, with both drilling contractors and
major operators. His experience covers
Europe, the U.S., South America, the Middle
East and Southeast Asia. He holds an MS
degree in petroleum engineering from
University of Stavanger.
FRODE LEFDAL is well
engineering manager for BG
Group in Norway. He holds an
MS degree in petroleum
engineering from Norwegian
University of Science and
Technology. He has 15 years
of industry experience with major operators,
working in Europe and South America. He
is BGs Subject Matter Expert for managed
pressure drilling.
TOR YVIND OFTEDAL is chief
well engineering manager for
BG. He is a petroleum engineer
from Rogaland University and
has 32 years of experience with
the following companies:
Phillips Petroleum, Saga
Petroleum, Norsk Hydro, ConocoPhillips and
BG. He has held engineering positions in:
platform/pipeline inspections, drilling and
workovers, well intervention and platform
operations in Norway, Denmark and UK. He has
been a manager/supervisor since 1986.
HENRIK SVEINALL is the
Product and Service Line
manager for Weatherfords
Secure Drilling Services in
Norway. He started his career
with Weatherford as a UBD
trainee engineer, and has
worked as an engineer and project manager on
UBD and MPD applications in North America,
continental Europe and ofshore in the North
Sea. He holds an MS degree in petroleum
engineering from University of Stavanger.
30 APRIL3 MAY 2012
HOUSTON, TEXAS, USA
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While optimizing collaboration center
utilization, Saudi Aramco has identied key
benets, including delivery of cost-efective,
fully integrated, multidisciplinary decisions.
ADEL A. AL-QAHTANI, MARTIN F. HOGG, KENNETH K. LAU and
NASER A. AL-NASER, Saudi Aramco
Application and adoption of collaboration centers in the
upstream industry has increased significantly over the past de-
cade. Saudi Aramco has established a number of collaboration
centers that capitalize on large-scale, multi-disciplinary and
value-added technical and business collaborations. These cen-
ters cover areas of exploration, geosteering, real-time drilling,
field development, production and intelligent field manage-
ment. Tangible economic and technical benefits encompass im-
proved recovery, improved technical workflows, technology in-
novation, enhanced staff skill set development, and significant
reduction of critical field development study cycle times. This
case study outlines Saudi Aramcos experience from five years of
utilizing multidisciplinary collaboration workrooms, as well as
a checklist methodology for collaboration center design, lay-
out, support and maintenance, incorporating continuous tech-
nology advancement and multidisciplinary complexity.
For the purpose of this article, a collaboration center is de-
fined as a permanent, dedicated physical space utilized by a team
working to fulfill a common, often complex, time-critical study
objective. It is a high-impact (e.g., critical safety and business de-
cisions) company asset that undertakes multiple, and generally,
parallel activities, including data retrieval, data validation, model
building, simulation, prediction, production optimization, well
intervention and operational development decision-making.
COLLABORATION CENTERS
Saudi Aramco has established a number of collaboration cen-
ters to accelerate delivery of, and improve the quality of time-
critical, interdependent, complex, technical, economic and
operational decisions. These centers also significantly shorten
the professional skills development cycle for rapid and complex
cross-disciplinary project decisions. Three collaboration facil-
ity categories are employed: Real-Time Operations Centers,
Multidiscipline Integration Centers and Training Centers.
REAL-TIME OPERATIONS CENTERS
The Geosteering Operations Center (GOC, Fig. 1) was one
of Saudis Aramcos first collaboration centers. Established in
2005, GOC provides expertise to monitor, analyze and model
the optimal placement of horizontal and multilateral wells for
maximum reservoir contact. Designed to concurrently monitor
up to 75 drilling rigs, the GOC has a wide variety of software,
hardware and visualization technologies.
1
The GOC, as a 24/7
facility, actively monitors thousands of feet of drilled reservoir
section annually, including the consuming and analyzing of a
large volume of real-time data (e.g., MWD and LWD) feeds on a
minute-by-minute basis.
Established in 2006, the Exploration Operations Room
(EOR) provides centralized wellsite geology expertise for stra-
tegic upstream projects. Equipped with state-of-the-art geologi-
cal technologies, the EOR monitors and provides real-time de-
cision analysis (formation evaluation, mud logging, etc.) of key
exploration and development well decisions, including casing
point, coring and DST selection, plus centralized daily well re-
porting and well decision management.
The Real-Time Drilling Operations Center (RTOC) Fig. 2,
provides centralized drilling operations expertise to lower and
quickly resolve non-productive drilling-related incidents, such
as stuck pipe, borehole instability, tight hole, etc. Established in
2008, this 24/7 facility can support more than 40 concurrent
drilling rigs.
2
The RTOC has a wide spectrum of leading analy-
sis techniques and technologies to consume, analyze and model
a large volume of real-time (e.g., MWD, LWD, directional, drill-
ing fluids, temperature, pressures, etc.) data feeds to achieve im-
proved, time-critical well management decisions.
MULTIDISCIPLINE INTEGRATION CENTERS
Saudi Aramco established the Event Solution collaboration
facility in 2006, for major, multidisciplinary, optimized field
development plans (OFDP). It completes complex projects in
weeks rather than in years, with increased clarity on uncertainty,
optimization and risk mitigation.
3
Deliverables include best-in-
class OFDP workflows and technology innovation
4
through
synergized reservoir characterization, reservoir understanding,
simulation and modeling.
Smart upstream collaboration centers:
Design, technology support and lessons learned
Fig. 1. Geosteering Operations Center (GOC)
Located in Saudi Aramco's Dhahran headquarters, the Intel-
ligent Field Centers are an integral component of a large field
and well instrumentation/automation initiative.
5
Inaugurated
in 2009, two intelligent field collaboration facilities provide a
dedicated environment for management and technical experts
to remotely view, analyze, model and initiate reservoir produc-
tion (well and field level) optimization decisions.
TRAINING CENTERS
Saudi Aramco has many training centers (e.g., Leadership
Center, Microcomputer Training Center, Industrial Training
Center). Opened in 2010, the Upstream Professional Develop-
ment Center (UPDC) is an advanced knowledge management
and expertise collaboration facility that integrates formal class-
room training with relevant work experience, plus responsive,
progressive mentoring and access to all relevant computer-
based learning and knowledge-based resources. Simulating the
work environment and integrated workflows is fundamental to
UPDC. Designed to train more than 500 professionals, UPDC
incorporates an array of leading and Saudi Aramco proprietary
technology and expertise, focusing on business-critical work.
BENEFITS
Saudi Aramcos collaboration centers deliver a high level of
technical and business improvement in specific tasks. Accord-
ingly, the company has realized, developed and experienced a
number of industry-leading process, organizational, operational
and technology support benefits that would not have material-
ized without adopting and applying collaboration facilities.
Several examples include:
Higher-quality project deliverables and significantly
shortened, project-critical decision cycles. For example, de-
liver major, optimized field development projects in months,
with increased clarity on uncertainty and risk mitigation.
3
Higher-quality and industry-leading technology and
workflow expertise. For example, the Roll-Up initiative
was adopted as a new integrated reservoir studies industry
standard. This initiative provides executive and management
dashboards (Fig. 3) to easily explore, display and contrast
study results and alternative development scenarios.
4
An-
other example is the Drilling Real Time Data Hub
7
, which is
a data management and exchange solution for real-time drill-
ing and completion data, based on WITSML.
Enhanced intra-collaboration facility workflows and
technologies. These properties serve as a key foundation
step toward advanced inter-collaboration initiatives, such as
real-time reservoir simulation and Real Options.
5
A lowered risk and high-impact mechanism to continu-
ously introduce, adapt and grow organizational, techni-
cal and resource improvement. This is done without the
need for a major company-wide organizational change, and/
or refit as generally applied in most industries.
Accelerated, effective adoption of innovative technol-
ogy and processes. Collaboration facilities are ideal for new
technology and processes, providing immediate operational
feedback and refined improvement deployment plans.
An enhanced, accelerated learning, training and develop-
ment environment. Collaboration facilities are a core petro-
technical skills set development asset, exemplifying multidis-
ciplinary team work, motivation and communication.
Cross-industry collaboration. A premium mechanism for
the development of joint industry technology initiatives.
LESSONS LEARNED
Saudi Aramcos facilities have given rise to a number of les-
sons learned in designing and supporting smart upstream col-
laboration centers. Accordingly, the ability to incorporate these
lessons early is a critical success factor in the management and
operation of current and future collaboration centers.
Collaboration facilities stimulate technology and work-
flow innovation initiatives. These are high-impact catalysts
that stimulate step change improvements (e.g., technology, pro-
cess, organization and ownership) beyond the original obliga-
tory project deliverables. The Roll-Up initiative is an example.
4
An annual technology (software and hardware) and con-
sulting fund is a must. This fund is critical to address and bridge
potential project delivery gaps associated with new, previously
not encountered and/or unforeseen, critical, project work tasks.
Alternatively, one should avoid and minimize the non-availability
of technology and or consulting solutions.
A major facility and technology refurbishment work pro-
gram is likely every three to five years. Technology evolution,
combined with changing organizational, human resource and
business management requirements, generally outgrows the orig-
inal facility design and technology scope. This is particularly true
for evolving and innovative initiatives, like the emergence and
Fig. 2. Real-Time Drilling Operations Center (RTOC)
Fig. 3. Executive Dashboard of Roll-Up Initiative
4
availability of HD-quality and 64-bit technologies, unified cross-
disciplinary technologies, virtual collaboration, etc.
Collaboration leads to adoption of industrial standards,
such as WITSML. It allows the leveraging of investment in high-
ly instrumented fields to enable new automation and optimiza-
tion that would otherwise be impossible or difficult to achieve.
Also, it reduces the cost of information exchange between Saudi
Aramco and software service companies, and it reduces the cost
of replacing or substituting software to improve functionality.
Cross-disciplinary technology and workflow, and uni-
Checklist for Successful Collaboration Centers
Our experiences in establishing and supporting collaboration centers
gave rise to the following checklist, which is essential in planning,
designing and building efective, successful collaboration centers.
Design
Dene the scope of the center
Determine the type of workow to be applied
Map the process used for selecting products and technologies
Dene the stakeholders, and the roles and responsibilities of each
Determine the class of the center
Fast loop (seconds to days): e.g., control room decisions
Medium loop (hours to months): e.g., planning of operations on
integrated ofshore platforms
Slow loop (months to years): e.g., optimizing secondary recov-
ery
Determine type of center to build (physical, virtual, hybrid)
Identify available IT infrastructure
Dene core (e.g., software and hardware) and helper technology
(e.g., audio and control tools) to match dened workow
Select appropriate organizational structure to follow (functional,
process-based, matrix)
Make users, themselves, and or a third party participate in the de-
sign phase, to ensure optimization and full utilization
Allow an adequate space for desktops, storage, meetings, etc.
Have breakout rooms for meetings, training, consultation, etc.
Allow for room and video system reconguration
Design or select ergonomic furniture
Dene size, type and resolution of data display devices
Centralize audio/video control
Incorporate climate, lighting and noise level control
Use a wireless oor to have a safer environment
Technology & Processes
Make provision to allow for changes in technical requirements
Adopt integrated applications
Adopt advanced visualization systems (video wall, LCD screens,
touch screens, desktop camera, sympodium, etc.)
Capitalize on the use of high performance computing
Attend to various aspects of data backup and data security
Leverage the availability of real-time data
Have good data management and communication among diferent
assets and domains
Have a common data repository
Identify the digital network to which technology is integrated
Capitalize on the advanced monitoring and surveillance capabilities
Management and Technology Support
Introduce and support new technology more efectively
Have dedicated staf for hardware and software support
Incorporate workow/procedures to keep up with the development
of new technology
Plan for and minimize down time
Budget for hardware, software and furniture upgrades
Incorporate KPI to access performance
OIL & GAS FORECAST 2012
FEATURED WEBCAST
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US and worldwide oil production gures for 2011 versus 2010
US drilling forecast for 2012 versus 2011 well totals, including an analysis of
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fied data access are critical, core collaboration facility suc-
cess factors. The opportunity for all facility participants and
project stakeholders to easily access, share, visualize, analyze
and contribute to all project work tasks and decisions, irrespec-
tive of seniority, expertise and discipline is a must. This does
not lessen nor remove the requirement for discipline special-
ist content. Rather, this factor strengthens the opportunity for
higher project quality, content and detail.
The availability of a technology, data and operating sys-
tems support professional as a full-time collaboration team
member is critical. Since collaboration facilities are high-im-
pact, high-cost and time-critical company assets, minimal facili-
ty downtime is a must. Having an embedded, multidisciplinary,
petrotechnical support professional with equal project delivery
accountability is important and indispensible.
A strong, dedicated management staff drives success.
Collaboration facilities are major capability transformation as-
sets that do not run themselves without sustained executive and
senior management endorsement, both in funding and leader-
ship, not least the critical development of professional mutual
respect and trust between various end-users and specialists.
Benchmarking and flexible support processes allow for
process evaluation. Development of standard Key Perfor-
mance Indices (KPIs) provides a means of measuring perfor-
mance, utilization, customer activities and achievements of col-
laboration centers. The nature and pace of collaboration center
activities dictate a responsive, active support model, including
administration, organization, contracting, data access, staffing,
technology access, etc.
THE FUTURE OF COLLABORATION CENTERS
Saudi Aramco has successfully designed, built, used and
benefited from a wide range of collaboration facilities. Activi-
ties have largely focused on improving and refining collabo-
ration optimization within specific work tasks. The next step
in the development of future collaboration centers will focus
on inter-collaboration facility initiatives including organiza-
tional, operational, technology and workflow improvement
opportunities.
5

The rapid advance of more robust video and audio digital
communication devices has led to the establishment of virtual
collaboration centers. They are being utilized in a number of
companies (e.g., BP and Shell). The advantages that led to their
usage in place of physical centers are obviousno need to du-
plicate physical centers at multiple locations; team members
can collaborate at any time irrespective of physical geographic
location; and a reduction in hardware and software costs.
A successful collaboration facility includes a dynamic tech-
nology and resource profile with sustained executive sponsor-
ship. Collaboration facility utilization will continue to grow
and evolve with changing business requirements, e.g., real-time
simulation and Real Options. We foresee virtual collaboration
through advanced, emerging technologies as a potential oppor-
tunity for geographically dispersed experts to remotely contrib-
ute to critical collaboration work tasks.
ACKNOWLEDGMENT
Te authors would like to express their thanks and appreciation to Saudi Aramco man-
agement for permission to publish this article.
WEB EXCLUSIVE: See the complete literature cited for this article at WorldOil.com.
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Mobility and conformance control
for carbon dioxide EOR Part 1
National Energy Technology
Laboratory
+1 (281) 494-2516
netl.doe.gov
The U.S. Department of
Energys Of ce of Fossil
Energy recently released an
in-depth study reviewing over
40 years of carbon dioxide
enhanced oil recovery (CO
2
-
EOR) research related to
mobility and conformance
control. This is the rst of four
articles based on that report.
DR. ROBERT ENICK, University of
Pittsburgh; JAMES AMMER, National Energy
Technology Laboratory; WILLIAM SCHULLER,
URS Corporation
O
ver the past decades, the De-
partment of Energy and its
predecessor organizations
supported a large number of
laboratory and field research projects
including advanced reservoir character-
ization, mobility control and CO
2
-EOR
flooding conformancein an effort to
improve the oil recovery process. DOE
recently commissioned a CO
2
mobility
control and conformance control litera-
ture review to stimulate interest in devel-
oping advance technologies to overcome
the geologic and process limitations of
CO
2
-EOR. These limitations include
poor sweep efficiency, unfavorable in-
jectivity profiles, gravity override, high
ratios of CO
2
to oil produced, early break-
through and viscous fingering.
Carbon dioxide enhanced oil recovery
has been used commercially to recover
oil from geologic formations for over
40 years. Currently, CO
2
-EOR provides
about 280,000 bopd, just over 5% of to-
tal U.S. crude oil production, Fig. 1. This
percentage is likely to grow in upcoming
years, due to high crude oil prices, avail-
ability of natural CO
2
, more in-field drill-
ing, advances in drilling technologies, and
the potential availability of large, anthro-
pogenic CO
2
sources, Fig. 2.
A revised national resource screening
assessment for CO
2
-EOR (July 2011)
prepared for DOE by Advanced Resourc-
es International concluded:
Next generation CO
2
-EOR can pro-
vide 137 billion bbl of additional, tech-
nically recoverable domestic oil, with
about half (67 billion bbl) economi-
cally recoverable at $85/bbl, Table 1.
This volume of economically recover-
able oil is sufficient to support nearly 4
million bpd of domestic oil production
(1.35 billion bbl per year for 50 years),
reducing oil imports by one-third.
Federal and state treasuries, as well as
the general U.S. economy, would be
large beneficiaries. Total revenues to
federal/state treasuries would equal
$1.42 trillion, whereas total revenues
in the form of wages and material pur-
chases would equal $1.72 trillion.
Nearly 20 billion metric tons of CO
2
would need to be purchased by CO
2
-
EOR operators to recover the 67 billion
bbl of economically recoverable oil.
Of this, at least 18 billion metric tons
would need to be anthropogenic CO
2

captured from industrial sources.
Next-generation technologies include
increasing CO
2
injection volumes by 50%
or more, drilling horizontal wells for injec-
tion or production, improving mobility
ratio and flood conformance, extending
the conditions under which miscibility
between the oil and CO
2
can be achieved,
and applying advanced methods for mon-
itoring flood performance.
Despite the well-established ability of
CO
2
-EOR to recover oil, the process could
be improved, if the high mobility of CO
2
relative to reservoir oil and water can be
effectively and economically reduced.
The CO
2
-EOR industry continues to use
water-alternating-with-gas (WAG) as the
technology of choice to control CO
2
mo-
bility and/or mechanical techniques (e.g.,
cement, packers, well control, infield drill-
ing and horizontal wells) to help control
the CO
2
flood conformance, Fig. 3. If the
next generation CO
2
-EOR target of 67 bil-
lion bbl is to be realized, new solutions will
be needed to recover significantly more oil
than the 1020% of the original oil-in-place
associated with current flooding practices.
The premise of the literature review
was to highlight prior results, thus pro-
viding a baseline understanding of the
remaining challenges to and research ef-
forts required for CO
2
-EOR technology
advancement. The review highlighted a
number of successes. For example:
INDUSTRY REPORT / NATIONAL ENERGY TECHNOLOGY LABORATORY
In the lab, there has been consider-
able progress in (direct) thickening
of CO
2
to a level comparable to that
of oil and brine for improved mobil-
ity control, but no field tests have yet
been conducted.
Many lab-scale tests and over a dozen
field tests involving water-soluble sur-
factants capable of stabilizing CO
2
-
in-brine foams have been conducted,
most aimed at attaining conformance
control via the in-situ generation of
stronger foams in thief zones.
The emergence of robust gel-based con-
formance techniques (near wellbore) may
have led to a decline in the use of foams
as a conformance control technique, es-
pecially in extremely high permeability
flow paths such as vugs and fractures.
A large number of lab-scale studies,
but only a few field-scale tests, were
directed specifically at the design of in-
depth (interwell) mobility control foams
where in-situ generation of weaker
foams was intended to suppress finger-
ing and enhance the rate and cumula-
tive amount of oil recovery.
Recently, CO
2
foams generated with
CO
2
-soluble nonionic surfactants were
successfully tested in the lab and
through an ongoing pilot test.
Lab-scale testing of foam stabilization
with water-dispersible nanoparticles has
been initiated in an attempt to circum-
vent issues, such as adsorption losses
and chemical instability of the surfac-
tant, associated with surfactant solu-
tions flowing through a porous medium.
The results of 40 years of research and
field testing clearly indicate that mobility
and conformance control for CO
2
-EOR
with thickeners, foams and gels can be
technically and economically attainable
for some fields. However, significantly
more research needs to be conducted.
The following technologies were recom-
mended as primary candidates for further
research:
CO
2
viscosifiers (direct thickeners).
An affordable CO
2
thickener has been rec-
ognized as a game-changing technology
for over 25 years, but has not yet been de-
veloped. Thickener design is a challenge,
due to the very low CO
2
solubility of high-
molecular-weight polymers and smaller
compounds that contain the chemical
groups responsible for viscosity-enhancing
intermolecular associations. An expensive
(fluoroacrylate-styrene) copolymer has
been shown to effectively thicken CO
2
,
but the continued development of more
economically viable CO
2
thickeners is re-
quired before field tests will be conducted.
Near-wellbore conformance control
with CO
2
foams and gels. The improved
performance of the gel technologies in
blocking flow paths, enhanced gel robust-
ness, and the ability to apply gel treatments
in fractured or highly permeable open-
flow-path formations has made gels the
popular choice of many operators for CO
2
flooding conformance control. However,
a consensus exists that CO
2
conformance
control foams are less expensive and more
readily reversible (via water injection, if
desired) than any of the gel treatments.
Given the ability of foams to be designed
for conformance and/or mobility control,
it may be prudent to combine the two
technologies, where gels are employed, for
conformance control, and CO
2
-in-brine
foam (rather than WAG) is used for mobil-
ity control.
In-depth mobility control CO
2

foams. Research results have demonstrat-
ed that surfactant-induced CO
2
foams are
an effective method for mobility control
in CO
2
foam flooding, but have potential
weaknesses. Because the foam is by nature
ultimately unstable, its long-term stabil-
ity during a field application in oil-bearing
zones is difficult to maintain. But CO
2
mo-
bility control via the alternating injection
of aqueous surfactant solutions and brine
has not been fully explored in pilot tests.
Foam generated by the alternating in-
jection of CO
2
-surfactant solutions and
brine ensures that the surfactant will be
Fig. 1. U.S. enhanced oil recovery with gases over past decades
Flue gas
Nitrogen
Hydrocarbon miscible/
immiscible
CO
2
immiscible
CO
2
miscible
1984
Source: Koottungal, 2010
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1986 1988 1990 1992 1994 1996
Year
I
n
c
r
e
m
e
n
t
a
l

o
i
l

p
r
o
d
u
c
t
i
o
n
,

b
p
d
1998 2000 2002 2004 2006 2008 2010
Fig. 2. Schematic of CO
2
from a thermoelectric power plant and renery being
sequestered in various geologic formations, including CO
2
-EOR in oil reservoirs
INDUSTRY REPORT / NATIONAL ENERGY TECHNOLOGY LABORATORY
present (and the foam forms) where the
CO
2
flows. An ongoing field test indicates
that the foam may provide some degree of
conformance and mobility control. The
use of liquid, non-ionic, CO
2
-soluble sur-
factants may be especially advantageous
for operators who only employ continuous
CO
2
injection, and may reduce the size of
the brine slugs for operators who choose a
CO
2
and brine injection scheme. Because
the CO
2
-soluble surfactants are also water-
soluble, the surfactant could conceivably
be added to both the CO
2
and brine slugs.
New nanoscience technologies may
also provide an alternative to generation
of stable CO
2
foam. Nanoparticles read-
ily disperse in water, and this dispersion
readily flows through unconsolidated po-
rous media. Using nanoparticles instead
of surfactant to stabilize CO
2
foam may
overcome the long-term instability and
surfactant adsorption loss issues that affect
surfactant-based CO
2
-EOR processes.
DOEs Office of Fossil Energy, through
the National Energy Technology Labora-
tory (NETL), awarded a number of new
research projects in 2010, seeking to fur-
ther next-generation CO
2
EOR to the
point of pilot (small) scale testing. Three
of these activities are related to mobility
control in CO
2
flooding; two are focused
on nanoparticle technologies, and one
on CO
2
-soluble surfactants. A fourth re-
search activity is field-testing gels for con-
formance control.
Parts 2, 3 and 4 of this series will cover
CO
2
foams for mobility and conformance
control, field tests of CO
2
foams and confor-
mance control gels, and CO
2
additives di-
rect thickeners, foam-stabilizing surfactant
agents and nanoparticles.
DR. ROBERT ENICK is the Bayer Research
Professor of Chemical and Petroleum
Engineering at the University of Pittsburgh,
and has worked in various capacities with
NETL scientists since 1987. He has developed
numerous compounds designed to dissolve in
CO
2
, including direct CO
2
thickeners, for over
20 years. Enick led the team that designed the
uoroacrylate-styrene copolymer (polyFAST)
direct thickenerthe only compound identied
to date capable of increasing CO
2
viscosity by
a factor of ~10 at a concentration of ~1wt% at
minimum miscible pressure (MMP) conditions
without the need for a co-solvent. In recent
years he has identied numerous commercially
available, non-ionic, CO
2
-soluble surfactants
with the potential to form CO
2
-in-brine mobility
control foams in-situ as CO
2
-surfactant solution
is injected into the formation.
JAMES AMMER is the Director of the Natural
Gas & Oil Project Management Division at
the National Energy Technology Laboratory,
which manages external R&D projects funded
through the Department of Energys Of ce of
Fossil Energy Natural Gas and Oil Program.
Previously he served as a project manager
for 10 years, managing projects in drilling,
stimulation, production optimization, natural
fracture detection and prediction, and gas
storage. Ammer also conducted reservoir
engineering and simulation studies for over 10
years, including studies on CO
2
ooding, gas
migration analysis, horizontal drilling evaluation
and gas storage ef ciency. He received his
BSc degree in Petroleum and Natural Gas
Engineering from Pennsylvania State University
in 1983. Ammer has been employed at NETL for
over 27 years.
WILLIAM SCHULLER is a Senior Scientist with
URS Corporation (Energy and Construction
Services Division, Global Management and
Operations Services Business Unit) providing
technical support to DOEs National Energy
Technology Laboratorys (NETL) Of ce of
Research and Development. Additionally, he
is the Oil and Gas Program Lead for Team
KeyLogic (KeyLogic, Inc. and URS joint venture)
providing project execution and integration
services support to the Natural Gas and Oil
Project Management Division at NETL. Schuller
has a BS in Geology from West Virginia
University and has over 35 years of oil and gas
experience in reservoir characterization and
production enhancement.
REFERENCES
Kootungal, L, 2010 worldwide EOR survey, Oil and
Gas Journal, April 19, 2010, Vol. 108, No. 14, pp. 4560.
Kuuskraa, V. A., T. Van Leeuwen, and M. Wallace,
Improving domestic energy security and lowering CO
2

emissions with next generation CO
2
-enhanced oil
recovery (CO
2
-EOR), DOE/NETL 2011/1504, June
20, 2011, pp. 1113. Available at:
www.netl.doe.gov/energy-analyses/refshelf/PubDetails.
aspx?Action=View&Source=Main&PubId=391
Lindley, J., Series of enhanced oil recovery, drilling and
waterfood illustrations, U.S. Bureau of Mines and
succeeding organizations Energy Research Develop-
ment Administration and U.S. Department of Energy,
Bartlesville, OK, ca. 1960.
Fig. 3. Simplied illustration of a CO
2
ood
Table 1. Oil recovery and CO
2
storage from next generation CO
2
-EOR technology
Oil recovery* CO
2
demand/storage
(Billion bbl) (Million mt)
Reservoir setting TechnicalEconomic** TechnicalEconomic**
1. Miscible CO
2
-EOR
Lower-48 onshore 104.4 60.3 32,250 17,230
Alaska 8.8 5.7 4,110 2,330
Ofshore 6.0 0.9 1,770 260
Sub-total 119.2 66.9 38,130 19,820
2. Near Miscible CO
2
-EOR 1.2 0.2 800 110
3. Residual oil zone*** 16.3 n/a 6,500 n/a
TOTAL 136.7 67.1 45,430 19,930
* Includes 2.6 billion bbl already produced or being developed with miscible CO
2
-EOR and 2.3 billion mt of CO
2

from natural sources and gas-processing plants.
** At $85/bbl oil price and $40/mt of CO
2
market price, with rate of return (ROR) of 20% (before taxes).
*** Residual oil zone (ROZ) resources below existing oil elds in three basins; economics of ROZ resources were
beyond study scope.
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PEOPLE IN THE INDUSTRY
Noble Corporation
promoted Bernie G.
Wolford to senior
VP-operations. Wolford
previously served as the
companys VP-operational
excellence. He initially
joined Noble through the
Transworld acquisition in
1991 and has held division
manager positions in both
the Middle East and Brazil
divisions.
PetroFrontier Corp. has
appointed Earl Scott as
COO of PetroFrontier
and president of its two
wholly-owned Australian
subsidiaries, PetroFrontier
Ltd. and Texalta Ltd.
Based in Adelaide, South
Australia, Scott will be
responsible for all opera-
tions of the two Australian
subsidiaries.
Emerson Process
Management announced
that Curt Terje Espedal has
become the new European
regional manager for
Roxar Software Solutions.
Espedal joins Emerson
from E&P software com-
pany Landmark Graphics,
where he has worked for
the past 13 years, and his
last role was managing
director of the companys
Norwegian operations.
Seanic announced the
addition of three key
personnel to its team.
Godik Gyldenege joins the
company as a manager
of special projects and
brings more than 40
years of experience in the
subsea industry. Derek
Chaplin joins the company
as a mechanical design
engineer with more than
seven years of subsea
project management and
mechanical engineering
experience. Lastly, Adam
Padilla has been appointed
tool pool manager.
Shell announced that
Malcolm Brinded has
agreed to step down as
its executive director of
Upstream International.
The company has
appointed Andrew Brown
as Upstream International
director. He will be a
member of the Executive
Committee and will be
based in the Netherlands.
Brown is currently execu-
tive VP Qatar.
Kuwait has appointed
Hani Hussein, a former
CEO of Kuwait Petroleum
Corp. (KPC), as oil
minister. Hussein, who
was appointed KPC chief
in 2004, originally had
decided in early January
2007 to step down and
take early retirement.
Kuwait, a member of
OPEC, frequently reshuffles
its cabinet, but replacing
oil ministers usually doesnt
affect the countrys energy
policy, which is set by
the Supreme Petroleum
Council.
AquaTerra Training Ltd.
has appointed Charlie
Cameron as operations
manager. Previously,
Cameron was cur-
riculum manager at Angus
College, as well as a fire
and rescue crew manager.
Adira Energy Ltd. has
named Jeffrey Walter as
CEO, and the transition of
Hezi Kugler from CEO to
strategic consultant to the
company. Walter previously
held positions with Noble
Energy for 27 years, where
he led the team respon-
sible for the largest gas dis-
covery at the time in Israel.
He directed programs
increasing international oil
reserves from 29% to 69%
and gas reserves from 6%
to 61% of overall corporate
reserve base.
Reservoir Group has
appointed Wade
McCutcheon as COO.
McCutcheon steps up to
the role from his previous
position as VP, responsible
for the companys forma-
tion evaluation activity.
McCutcheon will oversee
all operational matters,
accelerating the groups
growth and maximizing
synergies between exist-
ing member companies.
ABCO Subsea announced
that Jeffrey T. Glattly
has joined the company
as director of sales and
marketing. Glattly brings
over 30 years of experi-
ence in strategic marketing
and planning, sales, and
business and market devel-
opment to the company.
Glattly previously worked
in a consultative capacity
at ABCO Subsea. In his
new role, he will oversee
the growing companys
marketing, customer
service, advertising and
sales. Glattly previously
worked as director of sales
at Noble Biomaterials
and oversaw a sales and
marketing team at Bayer
Pharmaceuticals.
Murphy Oil Corporation
promoted Bill Stobaugh
to executive VP, corporate
planning & business
development, and Tom
Mireles to VP of the same
unit. Stobaugh joined
Murphy Oil in May 1995 as
VP, corporate planning,
in El Dorado, Arkansas. In
his new position Stobaugh
will report to Murphy Oil
president and CEO David
Wood. Mireles joined
Murphy Exploration &
Production Company in
August 2005 as senior
staff analyst in the Frontier
E&P department in
Houston. In his new posi-
tion, Mireles will continue
to report to Stobaugh.
Anadarko Petroleum
Corp. CEO Jim Hackett
plans to step down in
May and will be suc-
ceeded by COO Al
Walker. Hackett, who has
been CEO for more than
eight years, will become
executive chairman a
new positionthrough
the companys annual
shareholder meeting next
year. He plans to retire
in June 2013. Walker, a
30-year industry veteran,
has been with Anadarko
for more than six years,
currently serving as a
director of Centerpoint
Energy, Inc. and Western
Gas Holdings, a subsidiary
of Anadarko, and general
partner to Western Gas
Partners LP.
Clariant Oil & Mining
Services has named
Graham Gammack head
of marketing for the Oil
Services business line.
Gammack previously
serving as director of
business development.
Prior to joining Clariant,
Gammack served as the
manager of process and
capability improvement
at Baker Hughes. He has
25 years of experience
in oil and gas. During
his career, he has held a
number of positions in
technical sales, opera-
tions support and P&L
management.
Imtech Marine has
appointed Sytze Voulon
to the position of regional
director, North West
Europe (Rotterdam).
Voulon has held several
senior management posi-
tions in the international
maritime industry. Most
recently he was regional
directormarine Europe
until 2008 and regional
directormarine Europe &
Africa/VP services Europe
& Africa.
Guy M. Oliver has been
named president of Fugro
Robertson Inc. Based in
Houston, Olivers respon-
sibilities include overall
management of company
performance, technical
marketing support of sales
and business develop-
ment, and the implemen-
tation of quality, health,
safety and environment
(QHSE) policies. Oliver
began his career with
Fugro Robertson (formerly
Robertson Research
International Ltd.) in 1997
as a sedimentologist, and
has served as a director of
the company since 2004.
ITS Energy Services
appointed Joe Chandler
as COO. He was also
named a member of
the board of directors.
Chandler joined ITS in
January 2003, previously
serving as VP for North
and South America.
KBR appointed Darrell
Hargrave to president of
KBRs Industrial Services
business unit. A 30-year
veteran of KBR, Hargrave
previously served as senior
VP of KBR Industrial
Services.
Xodus Group has created
a new chief technology
officer position to lead
its integration of surface
and subsurface services.
Stephane Constant, who
became a non-executive
director last year, has
taken up the full-time post.
Constant was co-founder
and technical director of
subsurface consultancy,
Horizon Energy Partners,
which he built to 100
people and sold to SGS in
2008. He started his career
with ELF (now TOTAL) in
1991 as a reservoir engineer
responsible for various
UK-operated assets.
COMPANIES IN THE NEWS
Expro has opened its new
operations base in Paradise,
Newfoundland, Canada. It will
support the provision of well
testing, subsea and downhole
video services for offshore
Newfoundland. The new base
accommodates a team of 30
people, the majority of whom are
local employees. There is also a
four-bay workshop with 8,400 sq
ft of warehouse area, including
an office annex with 6,000 ft of
office space.
Shell Brasil was named the winner
of the Excellence in Project
Integration Award at the 2012
International Petroleum
Technology Conference. The
award was in recognition of the
significant and unique achieve-
ments made by Shell Brasils
BC-10 Parque das Conchas Team,
in successfully managing and
directing an integrated oil and gas
project from discovery to
production, using breakthrough
technology solutions.
Artificial Lift Company (ALC)
successfully installed the first
rigless electrical submersible pump
(ESP) string in the Middle East.
The installation was performed in
one of Saudi Aramcos fields and
comprises of a 134-hp Rigless ESP
system with a 6,000-bpd pump.
The system includes the ALCs
proprietary Permanent Magnet
Motors and Wet Connect system.
The unit was installed at a depth
of 6,119 ft and includes a downhole
ESP gauge, packer and subsurface
safety valve assemblies.
HB Rentals, a Superior Energy
Services company, has completed
a three-month project to install
seven ABS/USCG building pack-
ages on a compliant tower in the
Green Canyon area of the Gulf of
Mexico. The package consisted
of three 12-man sleepers, two
eight-man sleepers with office
capabilities, and an eight-man
sleeper and recreation room. In
addition to accommodations, HB
Rentals provided stairs, platforms,
slings, cords, power distribution/
transformer, gas detection, VSAT
communications, sewage treat-
ment, lift pumps, pressure sets
and a water manifold.
IBM has been selected for
a global research project to
develop the worlds first inte-
grated environmental monitoring
system aimed at helping oil and
gas companies minimize the
environmental impact of their
operations. IBM researchers,
developers and a team from
IBMs Centre of Excellence for Oil
and Gas in Stavanger, Norway,
are collaborating with experts
from Statoil, Kongsberg Group
and Det Norske Veritas (DNV)
on developing a solution that
will use industry frameworks,
combined with advanced
streaming analytics technology
to enable real-time monitoring
of environmental data, and early
detection of, and response to,
operational events surrounding
offshore installations.
Sonardyne International has
taken its first order for a Dynamic
Positioning Inertial Navigation
System. Vantage Drillings new
12,000-ft, water-depth-rated
drillship, Dragonquest, is set
to become the first deepwater
drilling unit in the world to be
equipped with the new system
when it begins operations in the
Gulf of Mexico for Petrobras later
this year.
Ulterra set a new bit record in the
Granite Wash with its 12.25-in.,
U616M, six-blade matrix PDC bit
with 16-mm cutters. The Ulterra
bit drilled 7,065 ft from surface
casing, down to a depth of 8,115 ft
in Roger Mills County, in western
Oklahoma. The operation saved
the operator an estimated
$44,500 versus the closest offset,
and $88,500 versus the average
of five offset wells.
North Star Shipping, a division
of global shipping and energy
services firm, The Craig Group,
has been awarded a major new
contract with Talisman Energy
(UK) Ltd. Under the contract,
the company, which provides
offshore support vessels to
the industry, will build two
new platform supply vessels to
support Talismans North Sea
operations. The contract, which
is for five years with multiple
options thereafter, will create 50
new jobs.
WorleyParsons has begun work
after being awarded a front-end
engineering and design (FEED)
phase contract in November
for the Hess Equus gas fields
development project offshore
Western Australia. The Equus
project involves developing
natural gas fields in permit area
WA-390-P, about 300 km west
of Karratha in the northern
Carnarvon basin. Under the
contract, WorleyParsons and
INTECSEA will provide the design
of a semisubmersible produc-
tion facility, including risers and
moorings.
Global NuTech has acquired
100% of the stock of Houston-
based Texas Gulf Oil & Gas.
The acquisition from private
equity firm Corporate Strategies
Merchant Bankers includes indi-
vidual oilfield producing assets
and options throughout the
Austin Chalk and near the Eagle
Ford shale play in Texas. These
assets include leases, options
and and working interests in 19
oil wells throughout the area and
additional options to invest in
wells to be drilled or re-entered
in three leases identified as
Tilmon, Lay and Rodenberg.
TAM International Inc. announced
that it will build a new manufac-
turing facility in the Houston area.
Plans call for 126,000 sq ft of
manufacturing space and 17,000
sq ft of office space. The facility
will house up to 300 employees
directly involved in the manufac-
turing process, which will increase
capacity for the production of
packers more than 40 ft long and
26 in. in diameter.
Seadrill has secured new
contracts for the three jackup
rigs Offshore Mischief, Offshore
Defender and West Leda. The
aggregated revenue potential
is estimated at $311 million.
Offshore Mischief has been
awarded a contract by Equion
Energia Limited in Colombia.
West Leda has been, in
association with local partner
IPS, awarded a contract by
ExxonMobil E&P Malaysia, Inc.,
for development drilling offshore
Malaysia. Offshore Defender
has been awarded a contract by
Brunei Shell Petroleum Company
for drilling offshore Brunei.
Technip was awarded a 5-year contract from Petrobras for the
supply of around 870 mi of flexible pipe. The contract is effective
immediately and orders are estimated to be worth around $2.1
billion. The scope of the contract includes the manufacture of
over 150 types and diameters of risers, flowlines and associated
equipment and accessories.
NEW PRODUCTS AND SERVICES
Curve rotary steerable system drills
multiple sections in one run
Baker Hughes introduced its AutoTrak Curve Rotary Steerable System, a
tool that can drill vertical, curve and horizontal sections in one fast run to
maximize available pay zones and reduce the number of trips. The system
has resulted in new drilling records across most of the important uncon-
ventional basins in the U.S. The tool is a closed-loop drilling system that
takes commands from the surface to place the wellbore in the desired
direction and inclination. The programmable system has been through
more than 10,000 hours of rigorous field testing in some of the toughest
unconventional environments in North America. Combining an optimized
bottomhole assembly (BHA) and drill bit to maximize drilling efficiency
and reservoir exposure, the system achieves high build rates of more than
15/100 ft. Tolerant to the presence of lost-circulation material in the mud
system, the technology does not require special pressure drop between
the pipe inside diameter and the annulus to operate. The advanced
technology saves time, given there is no need to change the bend angle
of a motor, resulting in faster well construction. Given the improved hole
quality, completion time also is enhanced and casing can be run to total
depth faster and easier.
www.bakerhughes.com
Clamp
spectrometer
validates life
of UV quartz
sleeves
The new Jaz clamp spec-
trometer from Aquion-
ics enables customers to
conduct on-location testing
of their UV disinfection
systems quartz sleeves.
The Jaz accurately validates
the life of quartz sleeves,
potentially extending their
usable life, and ensures UV
disinfection systems are op-
erating effectively. The spectrometers special adapter clamps
onto a quartz sleeve, utilizing fiber optics to transmit UV light
between 200 and 400 nm. By measuring the transmittance
of light through the quartz sleeve, customers can verify the
proper construction of new quartz sleeves and assess the level
of fouling and/or solarization of used sleeves. The device is
lightweight and compact, with 1,500 hr of lamp life powered
by a convenient battery or A/C plug adapter. A USB port al-
lows data transfer to a PC for data storage and analysis.
www.aquionics.com
Portable system
manages training
activities, info
The International Association
of Drilling Contractors has
introduced its IADC SkillSTICK,
a manpower development tool
for the oil and natural gas drilling
and completion industry. IADC
SkillSTICK is a standardized, por-
table training management utility.
Developed by Houston-based
Indaptive Technologies, Inc., the
device is a specially designed
USB drive that allows workers to
manage information and activities
related to training performance
anywhere in the world, regardless
of Internet quality. The device can
be used off-line for training from
pre-loaded e-Learning courses.
It can store student progress
and assessments associated with
those courses. When an Internet
connection becomes available, the
IADC SkillSTICK syncs back to an
online data repository, upload-
ing information recorded on the
device while working off-line; for
example, on a remote rig.
www.SkillSTICK.com/IADC
Two items added to HT reservoir
characterization services
Schlumberger announced the availability of its new PressureXpress-HT
reservoir pressure service and MDT Forte-HT qualified, rugged,
high-temperature formation sampling and pressure system. These two
services are the latest HT additions to the firms reservoir characteriza-
tion portfolio of services. Rated to 450F, the PressureXpress-HT tool
provides accurate pressure gradients and overall data quality not
achievable by conventional HT formation tester tools. The tools dynami-
cally controlled, pressure pretest system in the PressureXpress-HT tool
enables precise control of volume and drawdown rates. This makes
pressure testing possible in tight formations that are common in HPHT
reservoirs. The tool design also eliminates the need for gauge tempera-
ture stabilization, thus significantly improving operational efficiency.
The new MDT Forte-HT system provides greater all-around robustness in
formation sampling and testing operations up to 400F (204C).
www.slb.com
PDC reamer eliminates
shale drilling wiper trips
Stabil Drill, a Superior Energy Services
company, has developed the Stabil Drill Ghost
Reamer for horizontal shale drilling. The
Ghost Reamer, an eight-bladed polycrystalline
diamond compact (PDC) reamer, allows the
wellbore to be cleaned and cleared, either by
back-reaming on rigs that have a top driver
or on rigs without top-drive, by pulling out to
the top of the curve and then rotating forward
until reaching TD. This flexible solution elimi-
nates wiper trips, thus saving time and money.
www.stabildrill.com
Ultrasonic device
detects sources of
pressurized
gas leaks
The Gassonic Observer-H
Ultrasonic Gas Leak Detector
from General Monitors is ideal for
gas leak detection in pressurized
systems. The new device features
HART communications, Modbus
with single and block transfer
modes, Emerson AMS Intelligent
Device Manager support, and
event logging. The detector
is ATEX, IECEx, FM and CSA
hazardous-area certified and SIL
3-suitable. The unit detects gas
leaks by sensing the airborne
ultrasound emitted from leaking
gas at high pressure. It is suitable
for gas detection in open, well-
ventilated areas, where traditional
methods may be unsuitable or
dependent on ventilation. Since
this gas leak detector responds
to the source of a gas release
rather than the dispersed gas, it
is unaffected by changing wind
directions, gas dilution, and the
direction of the leak.
www.generalmonitors.com
Deepwater LED
doubles as spot
or oodlight
Remote Ocean Systems has
introduced the ROS Lightning
deepwater LED Light. Using the
latest technology electronics
software, this new LED offers
10,000 lumens output and can have input powers of 18-30 VDC and
108-132 VAC to match user needs. In addition, the light offers a complete
dimming range and can be configured as a spot or floodlight. The light
is depth-rated to 6,000 m (19,685 ft) and offers a variety of connectors
for fast, and easy change-out or service.
www.rosys.com
ADVERTISERS IN THIS ISSUE
Baker Hughes ........................................................... 26
www.bakerhughes.com/roger
Boots & Coots ................................................... 64-65
www.halliburton.com/boots-coots
Cameron ....................................................................99
www.CameronAcquiresLeTourneauDrilling.com
Cameron ...................................................................... 5
www.c-a-m.com
Cansco Dubai LLC .................................................... 81
www.canscodubai.com
CNPC GWDC ............................................................. 18
www.cnlc.cn
Cougar Drilling Solutions...................................... 38
www.cougarDS.com
Cudd Energy Services ...........................................34
www.cudd.com
Daneshy Consultants Intl ...................................... 56
www.daneshy.com
Devin International ..................................................41
www.DevinDevin.com
Dragon Products, Ltd ............................................ 67
www.dragonproductsltd.com
FMC Technologies................................................... 24
www.fmctechnologies.com
Forum Energy Technologies, Inc. ....................... 39
www.f-e-t.com
Fraser Suites River Valley, Singapore ...............46
www.frasershospitality.com
Gardner Denver ......................................................... 6
www.pumpingperfected.com
Gastech ....................................................................... 61
www.gastech.co.uk/WorldOil
GE Energy Power Conversion ..............................10
www.ge-energy.com/electrifyingchange
GEA Westfalia Separator Group ......................... 59
www.westfalia-separator.com
Books - Underbalanced Drilling ...................... 87
www.GulfPub.com
Events - ShaleEnergy Technology
Conference ............................................................49
www.GulfPub.com/ShaleEnergyConference
Gulf Research Workforce Survey ....................96
www.GulfPub.com/WorkforceSurvey
World Oil - Forecast DataBook ....................... 88
www.GulfPub.com/WOForecast2012
World Oil - RigStar ..............................................86
www.WorldOil.com/RigStar
World Oil - Subscriptions .................................. 92
www.WorldOil.com/subscribe.aspx
World Oil - Webcast .......................................... 85
www.WorldOil.com/webcasts
World Oil Marketplace ....................................... 97
Halliburton ............................................................. 66a
Halliburton .................................................................. 8
www.halliburton.com/icem
Halliburton ................................................................43
www.halliburton.com/hydraulicfracturing
Industrial Rubber ...................................................... 4
www.iri-oiltool.com
Managed Pressure Operations ............................ 79
www.managed-pressure.com
Max Streicher GmbH ............................................... 51
www.streicher.de
National Oilwell Varco ........................................... 33
www.nov.com/CTES/Cerberus
National Oilwell Varco ............................................. 2
www.nov.com/qualitytubing
Newpark Drilling Fluids LP .................................... 31
www.newparkdf.com/evolution
Oil India Limited ...................................................... 73
ONS .............................................................................54
www.ons.no
OTC ............................................................................. 82
www.otcnet.org/2012
Packers Plus .............................................................20
www.packersplus.com
PCC Energy Group.................................................18a
PGS ............................................................................. 22
www.pgs.com
Schlumberger ............................................................ 11
www.slb.com/losseal
Schlumberger ...........................................................16
www.slb.com/petrel
Schlumberger ........................................................100
www.slb.com/Archer
SPE .............................................................................. 76
www.spe.org/training
Supreme Services .................................................. 40
www.supremeservices.com
Swagelok ....................................................................14
www.swagelok.com/pressure
Target Logistics .......................................................69
www.targetlogistics.net
Tenaris ........................................................................ 28
www.tenaris.com/tenarishydril
Tesco Corporation .................................................. 37
www.tescocorp.com
Thuraya Telecomm CO .......................................... 36
www.thuraya.com/XT
Varel International ..................................................42
www.varelintl.com
Volant Products Inc. ...............................................68
www.volantproducts.ca
Weatherford .........................................................12-13
www.weatherford.com
Well Control School ............................................... 78
www.wellcontrol.com
This index and procedure for securing additional information are provided as a service to World Oil advertisers and a convenience to our readers. Gulf Publishing Company is not responsible for omissions or errors.
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Seminar, March 19, Milan
Marriott Hotel, Milan, Italy
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(API) Spring Committee on
Petroleum Measurement
Standards Meeting, March 1923,
Dallas, TX
P: +1 (202) 682-8000
www.api.org/meetings
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Drilling & Underbalanced
Operations Conference &
Exhibition, March 20-21,
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(See box for contact information
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Summit, March 2629, Sheraton
Warsaw Hotel, Warsaw, Poland
P: +44 (0) 20 7017 6333
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International, March 2729,
Jaarbeurs, Utrecht, the
Netherlands
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APRIL
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Association of America (IPAA),
OGIS New York, April 1618,
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P: +1 (202) 857-4722
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IADC, International Deepwater
Drilling Conference & Exhibition,
April 1718, Hotel Sofitel, Rio de
Janeiro, Brazil
Southwestern Petroleum Short
Course (SWPSC), April 18-19,
Lubbock Memorial Civic Center,
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www.swpshortcourse.org
American Association of
Petroleum Geologists (AAPG),
2012 Annual Convention &
Exhibition, April 2225,
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P: +1 (918) 560-2679
convene@aapg.org
The Canadian Institute, Carbon
Capture and Storage Conference,
April 2425, Calgary, Alberta,
Canada
P: +1 (416) 927-7936
F: +1 (416) 927-1563
www.canadianinstitute.com/CCS
IADC, Drilling HSE Asia Pacific
Conference & Exhibition,
April 25-26, Marina Bay Sands,
Singapore
Offshore Technology Conference
2012 (OTC), April 30May 3,
Reliant Center, Houston, TX
P: +1 (972) 952-9494
F: +1 (972) 952-943
service@otcnet.org
www.otcnet.org
MAY
SPE, International Production
and Operations Conference &
Exhibition, May 1417, Qatar
National Convention Center,
Doha, Qatar
International School of
Hydrocarbon Measurement
(ISHM), May 1517, Cox
Communications Business Center,
Oklahoma City, OK
P: +1 (405) 325-1217
F: +1 (405) 325-1388
lcrowley@ou.edu
IADC, Drilling Onshore
May 17, Omni Houston Hotel
Westside, Houston, TX
IADC, Critical Issues Continental
Europe Conference & Exhibition,
May 2324, JW Marriott
Bucharest Grand Hotel,
Bucharest, Romania
SPE, International Conference &
Exhibition on Oilfield Corrosion,
May 2829, Aberdeen Exhibition
and Conference Centre,
Aberdeen, UK
JUNE
SPE Americas Unconventional
Resources Conference, June 57,
David L. Lawrence Convention
Center, Pittsburgh, PA
IADC International Tax Seminar,
June 7-8, Mayflower Renaissance
Hotel, Washington, DC
Society of Petroleum Evaluation
Engineers (SPEE), 49th Annual
Meeting, June 912, The Colorado
Springs Renaissance Hotel,
Colorado Springs, CO
P: +1 (713) 651-1639
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IADC, World Drilling 2012
June 1314, Arts Hotel,
Barcelona, Spain
SPE Deepwater Drilling &
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2021, Moody Gardens Hotel and
Convention Center,
Galveston, TX
Midyear Meeting, June 2729,
The Broadmoor, Colorado
Springs, CO
P: +1 (202) 857-4722
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JULY
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Handling Conference & Exhibition,
July 18-19, Hilton Lafayette Hotel,
Lafayette, LA
AUGUST
World Oil, Shale Energy
Technology Conference,
Aug. 22-23, Westin Memorial City,
Houston, TX
NAPE Expo, Aug. 2324.
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Symposium with 28th
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Symposium, Sept. 24-27,
George R. Brown Convention
Center, Houston, TX
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turbolab.tamu.edu
IADC, Drilling HSE Europe
Sept. 26-27, Movenpick Hotel
Amsterdam City Centre,
Amsterdam, Netherlands
OCTOBER
SPE Annual Technical Conference
and Exhibition, Oct. 8-10, Henry
B. Gonzalez Convention Center,
San Antonio, TX
Permian Basin International
Oil Show (PBIOS), Oct. 16-18,
Ector County Coliseum Complex,
Odessa, TX
P: +1 (432) 367-1112
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pbioilshow@pbioilshow.org
Offshore Energy 2012, Exhibition
& Conference, Oct. 23-24,
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F: +31 10 436 8134
fh@navingo.com
International Association
of Drilling Contractors
(IADC)
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FRACTURING
TECHNOLOGY 2012
ABOUT THE COVER: The FracPoint multi-stage fracture system isolates multiple zones for hydraulic fracturing to increase production
while optimizing fracture efficiency. Photo courtesy of Baker Hughes.
Copyright 2012 Gulf Publishing Company. All rights reserved.
For additional copies, contact the reprints department. Phone: 713-520-4426 / Fax: 713-520-4433 / E-mail: reprints@gulfpub.com
Mailing Address: Gulf Publishing Company, P.O. Box 2608, Houston, TX 77252, U.S.A.
Special Supplement to Special Supplement to
Published in March 2012
How to optimize proppant selection
based on fracture conductivity
Eliminate monitor wells and improve
ef ciency with microseismics
Can shale fracturing cause earthquakes?
Find out what scientic analysis reveals.
Whats new in fracturing technology
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T H E A L T E R N A T I V E
TM
FRACTURING TECHNOLOGY
Technology is key enabler of shale production
while minimizing environmental impact
ERLE C. DONALDSON, WAQI M. ALAM and NASRIN BEGUM, Tetrahedron, Inc.
FOREWORD
World Oil/WorldOil.com3
The single greatest technological de-
velopment that has made the production
of oil and gas from shale economically
feasible is the ability to deviate vertical
boreholes into horizontal laterals, extend-
ing 10,000 ft or more. Numerous prob-
lems were overcome to allow cementing,
perforating and radial distribution of mul-
tiple horizontal laterals from a single ver-
tical well. The resulting innovations that
have made the greatest impact on produc-
tion from shale and tight sandstone are 1)
slick-water fracture fluid for deep, brittle
reservoirs; 2) multi-stage hydraulic frac-
turing of horizontal wells; and 3) moni-
toring of microseismic signals emanating
from the initiation and propagation of
fractures.
Slick-water fracturing. The develop-
ment of slick-water fracturing followed
the realization that synthetic polymers
used for viscosity control, such as poly-
acrylamines, inhibited turbulence in fluids pumped through
tubing at high velocities. Less turbulence reduced the friction
of the fluids moving in the tubing and, consequently, elimi-
nated a significant amount of pressure loss from transport of
the fluids from the surface to the bottom of the well. At the
bottom, high pressure is required to initiate and propagate
fractures, and retain sufficient fluid velocity for transport and
placement of proppants. The proppants hold the fractures
open against the natural formation closure stress after comple-
tion of a fracture treatment and reduction of fluid pressure, as
production is initiated.
The realization that a small amount of polyacrylamines with
high molecular weight (0.01 to 0.1%) allowed pumping rates
of 100 bbl/min in 5-in. tubing led to applications for fractur-
ing deep (>6,000 ft), hard and brittle shale formations. The low
viscosity (<5 cP) limits the proppant carrying capacity to about
2.5 lb/gal of 100-mesh sand. The sand drops out immediate-
ly after entering the fracture and builds up as a sand dune to
a height that depends largely on the velocity of the fluid. Sand
moving across the top of the dune is entrained in the fluid and
carried further into the fracture.
Slick water consists of fresh or saline water containing the
polymer and other additives for specific effects: surfactants
to enhance proppant carrying ability, and a biocide to inhibit
slime-producing bacteria and control sulfate reducers that can
sour a reservoir. Gelled slick water is used in ductile shales and
high-permeability rocks.
Multi-stage fracturing. Several methods have been devel-
oped, using packers and jet fracturing tools, to place hydrau-
lic fractures at specific locations in long horizontal open- and
cased-hole wells. One method that has made a considerable
impact on fracture treatment of shale beds is the multi-stage,
ball-and-seat technology, which allows multiple fractures,
placed at specific locations, with continuous pressure pump-
ing. The technology is continually evolving: multiple ports,
with sliding sleeve that open two to five sections, allow place-
ment of 50 to 60 fractures simultaneously; more effective
placement of proppants; use of smaller fluid volumes and less
proppants per stage.
Microseismic monitoring. A third technology that is im-
proving the precision of horizontal well hydraulic fracturing
is microseismic monitoring of borehole events taking place
during the development of fractures. Seismic events generate
P- and S-waves that travel at different velocities, thus the dif-
ference in time between the arrivals of the waves at a distant
location is proportional to the distance traveled. Assuming
that the velocities of the waves are known, geophones placed
at three depths in a triangular pattern, with the event to be
recorded approximately in the center of the pattern, will locate
the event that can be imaged on a computer. Furthermore, the
ESGs downhole monitoring service was used to acquire and process microseismic events (colored
by fracture stage) during a 143-stage hydraulic fracture operation in the Horn River basin. Courtesy
of ESG Solutions and Nexen Inc.
4Fracturing Technology 2012
amplitude of the waves recorded by the geophones is a func-
tion of the relative size of the fracture. Waves representing the
fractures are mapped in real time to show the azimuth growth
trends. Real-time analysis of the fracture dynamics allows rap-
id decisions with respect to the pumping schedule, number
and locations of fracture placement, and proppant schedules.
The technology allows the operators to maximize the fracture
volume in zones that are most productive, leading to greater
efficiency in production.
Environmental impact. The greatest environmental con-
cern of shale gas development is the risk of vertical fracture
growth into a subsurface, freshwater aquifer. However, rapidly
improving microseismic monitoring of fracture growth is elimi-
nating the guesswork of fracture placement. In addition, frac-
ture growth is limited by the leak-off rate of the injected fluid
that stops fracture growth, when the leak-off rate is equal to the
rate of injection. Consequently, experience with the fracturing
of thousands of wells under freshwater aquifers has shown that
fractured zones that are separated by 500 ft or more from other
formations are not impacted by the fracture treatment. This has
been confirmed by the microseismic surveys and migration of
tracer chemicals added to the frac fluids.
Another environmental factor is the treatment and dis-
posal of flow-back frac fluid. This fluid is either disposed in
Class II injection wells or treated with emerging technologies
for re-use, thus saving large quantities of water, chemicals and
cost. The escape of produced methane is still another area of
concern because methane captures 20 times more heat in the
atmosphere than carbon dioxide. Care has to be taken to mini-
mize such leakage from natural gas production equipment and
pipeline equipment through improved monitoring and effi-
cient maintenance.
ERLE C. DONALDSON is senior consulting engineer for
Tetrahedron, an international engineering consulting
rm. Previously, he was on the faculty of the School of
Petroleum and Geological Engineering at the University
of Oklahoma. Since retiring in 1990, he has consulted for
various oil companies, universities and governmental
agencies. Dr. Donaldson earned a BSc in chemistry from
The Citadel, BSc in chemical engineering from the University of Houston
and PhD in chemical/petroleum engineering from the University of Tulsa.
WAQI ALAM is president of Tetrahedron. Dr. Alam has
been providing consulting services to the petroleum and
environmental industries for more than 22 years. He
received his PhD in petroleum engineering from the
University of Oklahoma, and has an MS in engineering
management and BS in chemical engineering.
NASRIN BEGUM is currently a program manager for
Tetrahedron. Dr. Begum is an environmental health
scientist who has evaluated environmental risks
associated with various chemicals, including chemicals
related to the petroleum industry. She has a PhD in
environmental health from Colorado State University and
MS in Plant Pathology from Oklahoma State University.
EDITORS NOTE: Drs. Donaldson, Alam and Begum are au-
thors of a technical book, Hydraulic Fracturing, scheduled for
release from Gulf Publishing Co. in Winter 2012.
DIAGNOSE. MITIGATE. OPTIMIZE.
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Hydraulic fracture optimization in unconventional reservoirs
Often overlooked, conductivity can have a signicant impact on both the long- and short-
term productivity of a well, which can ultimately determine the wells protability.
PEDRO SALDUNGARAY and TERRY PALISCH, CARBO Ceramics
A primary goal in unconventional reservoirs is to contact
as much rock as possible with a fracture or a fracture network
of appropriate conductivity. This objective is typically accom-
plished by drilling horizontal wells and placing multiple trans-
verse fracs along the lateral. Reservoir contact is optimized by
defining the lateral length, the number of stages to be placed in
the lateral, the fracture isolation technique and job size. Frac-
ture conductivity is determined by the proppant type and size,
fracturing fluid system and placement technique.
Fracture geometry optimization involves defining the de-
sired fracture half-length, width and conductivity for maxi-
mized production. While there are several optimization meth-
ods, all involve a relative comparison of the flow potential of the
fracture to that of the reservoir, as described by the dimension-
less fracture conductivity (F
CD
) parameter:

F
CD
= k
frac
W
frac
/ k
form

frac
For steady- or pseudosteady-state flow in oil wells, several

authors [Prats 1961, Cinco-Ley 1981, McGuire & Sikora 1960]
have developed correlations that allow the engineer to use F
CD
to predict the benefits of the fracture stimulation, yielding a
method that balances fracture half-length and drainage area
with fracture conductivity for stimulation design. F
CD
is also
used to optimize fracture design in such methods as the Unified
Fracture Design [Economides 2002]. The F
CD
concept and var-
ious related fracture optimization methods are well understood,
but many people in the industry fail to identify the fracture per-
meability to plug into the equation that is correctly estimated at
downhole flow conditions [Palisch 2007].
While most parameters are considered in great detail in the
completion design, fracture geometry and conductivity receive
less attention. Some people mistakenly anticipate that in forma-
tions with extremely low permeability, hydraulic fractures act
as infinitely conductive features. However, many factors that
affect the realistic conductivity of the fracture are poorly un-
derstood or overlooked. This often leads to a less-than-optimal
outcome with wells producing below the reservoir potential.
FRACTURE CONDUCTIVITY
While the fracture conductivity required to economically
produce a horizontal well in an unconventional play, and to im-
prove hydrocarbon recovery, will vary in different reservoirs,
many engineers fail to recognize the conductivity requirements
to accommodate high-velocity hydrocarbon flow in transverse
fractures. The pack conductivity for a given proppant is a func-
tion of the proppant particle size, strength, grain shape (round-
ness and sphericity), embedment into the frac faces, fracturing
fluid residue, fines migration, effective stress on proppant and
fluid flow effects (non-Darcy and multi-phase flow), which
can be very pronounced in the limited intersection between a
wellbore and a transverse fracture. When accounting for these
effects, it is not uncommon for proppant pack reference con-
ductivity to be reduced by two orders of magnitude [Palisch
2007 and Miskimins 2005].
Conductivity testing and its limitations. To understand
realistic conductivity, one must first understand how conduc-
tivity is measured and reported. The fracture conductivity
represents the product of the fracture permeability and the
fracture width.
ISO-13503-5 and API-RP-19D set the testing standards for
evaluating sand, ceramic media, resin-coated proppants, gravel
packing media, and other materials used for hydraulic fractur-
ing and gravel packing operations. While providing a consistent
methodology for proppant conductivity testing and comparing
proppant materials under comparable laboratory conditions,
A CARBO research chemist examines a CARBOBOND RCS sample un-
der a scanning electron microscope to evaluate grain-to-grain bonding
and ensure an optimal resin coating process.
API-RP-19D specifically states it is not intended for use in ob-
taining absolute values of proppant pack conductivities under
downhole reservoir conditions [API 2008].
The current procedure consists of placing a representative
sample of proppant at 2 lb/ft
2
in the test cell between two Ohio
sandstone wafers with a Youngs Modulus (YM) of 5 million
psi. The cell is heated to 150F or 250F, depending on prop-
pant type, and stress is ramped at a prescribed rate to the first
test point. After 50 hr, measurements are made, and the process
can be repeated at each desired stress, holding for an additional
50 hr at each stress. Conductivity is calculated by applying Dar-
cys Law from the pressure drop produced by a 2 ml/min, 2%
KCl flow stream through the proppant pack.
Although these standard conditions allow for comparable
testing between proppants, they rarely represent the realistic
conditions in which proppant is placed in hydraulic fractures
[Vincent 2009]. As such, these procedures ignore many pa-
rameters that affect the actual conductivity of the frac. Further
complicating matters, different proppant types may be affected
differentially by each parameter. A brief description of the key
effects is given below.
Non-Darcy and multiphase flow effects. The ISO/API
test flowrate of 2 ml/min is not representative of actual flow-
rates in a proppant pack. This rate would equate to ~6 bpd in
a fully perforated, vertical oil well, with a 50-ft tall, bi-wing frac
achieving 2 lb/ft
2
concentration, or ~15 Mcfd flowing at 1,500
psi and 250F in a similar dry gas well. The fluid velocities re-
sulting from more prolific wells will cause tremendous amounts
of energy to be lost, which translates into additional pressure
losses not described by Darcys Law. Forchheimers equation
below includes the non-Darcy pressure drop (
2
) compo-
nent for a single-phase fluid and is dominated by the velocity-
squared term [Forchheimer 1901]. Interpreting this extra pres-
sure drop as a conductivity reduction typically shows a fracture
conductivity impairment of 50% to 85% [Palisch 2007].

frac
frac
=
fluid
V
fluid
k
frac
+
fluid
V
2
fluid
Additionally, the fluid circulated in the ISO/API tests is a so-
lution of silica-saturated, oxygen-free 2% KCl water. In reality,
oil and gas wells rarely produce 100% water, or even a single-
phase fluid. Instead, two or three phases are typically present
(oil, water and gas), yielding a much more complex flow regime
than tested in the lab. Lab data consistently demonstrate that
pressure losses in the fracture may increase significantly, when
both liquid and gas phases are mobile within the fracture. This
is typically attributed to the highly inefficient flow regime
that occurs when gas, oil and water molecules move through
the proppant pack, each moving at a different velocity. In fact,
some researchers tend to consider multiphase flow impacts as a
multiplier to non-Darcy effects, since the impacts are most pro-
nounced at high-velocity flow. Unfortunately, significant pres-
sure losses are documented, even when only small percentages
of a second phase are mobile within the fracture, Fig. 1.
Proppant loading at 2 lb/ft
2
. It is generally accepted that in
most slickwater or hybrid frac stimulations, the effective prop-
pant loading achieved in the fracture is less than 1 lb/ft
2
. This
means that the fracture is narrower than in the ISO/API test. In
addition to directly impacting conductivity via the conductivity
equation, the much narrower width produced by the reduced
concentration also increases the fluid velocity through the pack
for a given flowrate. This, in turn, exacerbates the non-Darcy
and multiphase flow effects in the fracture. If the fracture width
is halved, and hydrocarbon velocity is doubled, then non-Darcy
pressure losses are increased by a factor of 400%.
Embedment and spalling. The ISO/API test uses a sand-
stone core with a YM of 5 million psi. Many shale and uncon-
ventional reservoirs are significantly softer than these sand-
stone cores (e.g., the Eagle Ford shale has a YM of 1-3 million
psi). Softer rock leads to a loss of width and conductivity, due
to both proppant embedment and formation spalling. The re-
duced width has the double effect of diminishing conductivity
in direct proportion, and increasing fluid flow velocity, due to
the smaller cross-section of the resulting proppant pack. As a
consequence, non-Darcy pressure losses will also be increased.
Temperature effects. The ISO/API conductivity test is
performed at 150F for sand proppant and 250F for ceramic
proppant. The reason for this difference is primarily because
higher temperatures have a known detrimental impact on sand
and sand-based proppants, such as resin-coated sand. As tem-
peratures exceed 200F, sand-based products can experience a
significant decrease in conductivity. For example, an uncoated
sand, when exposed to 250F at 6,000-psi stress, will lose 40%
of its conductivity compared to 150F, and this loss jumps to
nearly 80% at 300F and 8,000 psi. Coating the sand with a
resin lessens the damage, because the resin can encapsulate the
crushed fines. However, even resin-coated sand loses 30% of its
conductivity at 8,000 psi and 300F.
Ceramic proppants are tested at 250 F, due to their thermal
stability. These proppants are sintered at ~2,700F and are engi-
neered for improved sphericity, strength and thermal resistance.
Therefore, no correction is required when placing a ceramic
proppant into higher temperature formations.
Cumulative conductivity impact. When all of these effects
are taken together, the overall impact of these damage mecha-
nisms on the conductivity at actual bottomhole flowing condi-
tions can be severe. In fact, it is not uncommon to see the overall
loss of conductivity exceeding 90%, Fig. 2. While all proppants
experience these several orders of magnitude reduction in con-
ductivity, the individual damage mechanisms can have differ-
Increased pressure drop due to mobile liquid in proppant packs
10
0
20
30
40
50
60
0 5 10 15
M
u
l
t
i
p
l
i
e
r

o
f

t
o
t
a
l

p
r
e
s
s
u
r
e

d
r
o
p
Fractional ow of liquid, %
0.75 MMcfd
0.25 MMcfd
Trend
Fig. 1. The impact of multiphase ow can be dramatic at very low
fractional owrates of liquid [Palisch 2007].
ent impacts on the various proppant types [Schubarth 2006].
While the above conductivity damage is already severe, there
are also other downhole realities that can exacerbate the dam-
age, including long-term conductivity degradation and gel/flu-
id residue damage, as well as many other mechanisms [Palisch
2007, Barree 2003, Pearson 2001]. Regardless of the exact mag-
nitude of these reductions, the bottom line is that the realistic
conductivity in all hydraulic fractures is much less than mea-
sured in standard lab testing, and reported in industry literature.
Further, if these reductions are not accounted for when design-
ing hydraulic fractures and selecting the appropriate proppant,
significant production may be deferred or, in some cases, not
recovered in the existing completion [Blackwood 2011].
PROPPANT SELECTION
The most common completion in unconventional plays
consists of a horizontal wellbore with multiple proppant fracs
placed along it. Despite ultra-low reservoir permeability driving
up F
CD
, high-conductivity proppant is still needed, given the
detrimental effects. On top of the conductivity considerations,
there are several other issues that must be addressed when se-
lecting the appropriate proppant for use in these multi-stage
fracs, including flow convergence in transverse fracs, proppant
transport when low-viscosity fluids are employed and proppant
crush at typically low concentrations.
Flow convergence in transverse fracs. Production into a
horizontal wellbore from an orthogonal fracture will exhibit
linear flow in the far field as it travels down the fracture. How-
ever, as the fluids converge on the relatively small diameter of
the wellbore, the fluid velocities in that region increase dramati-
cally. In fact, if one considers a single, planar, 100-ft-tall vertical
fracture, and places it fully connected in a vertical well and trans-
versely in a horizontal, 6-in.-diameter wellbore, the fluid veloc-
ity near the wellbore would be 127 times higher in the trans-
verse fracture as compared to the vertical well. Further, since
velocity is a squared term in the Forchheimer calculation, the
ISO 13503-5
test (base
case)
Efective conductivities can be
less than 2% of API test values
Jordan sand
Lightweight ceramic
99%
reduction
98%
reduction
E
f
e
c
t
i
v
e

c
o
n
d
u
c
t
i
v
i
t
y
,

m
d
/
f
t
0
1,000
1,540
685
4,310
5,720
225
85
25 7
120
167
547
1,410
2,000
3,000
4,000
5,000
6,000
Inertial
ow with
non-darcy
efects
Multiphase
ow
Lower
achieved
width (1
lb/sq ft)
Gel
damage
Fines
migration/
cyclic
stress
Fig. 2. The cumulative reduction in conductivity due to several damage
mechanisms not accounted for in the standard ISO/API test [Palisch
2007].
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pressure drop in the transverse frac could be over 16,000 times
greater than in a fully connected vertical well. This leads to the
conclusion that it is practically impossible to place enough con-
ductivity near the wellbore in a transverse, horizontal well to be
fully optimized.
Proppant transport and placement. Proppant placement
is governed by a series of mechanisms involving the interaction
between the fracturing fluid and proppant. A number of issues
have been investigated through time that impact how proppant
is transported into the frac and its final location in the created
geometry. Proppant density and size have a determining impact
on proppant settling, which, in turn, impacts where proppant
will be placed in the frac.
The settling rate is directly proportional to the difference in
density between the fluid and proppant, and inversely propor-
tional to the fluid viscosity. This condition makes settling an im-
portant consideration when pumping low-viscosity Newtonian
fluids, as are typically used in horizontal multi-frac treatments
conducted in dry gas shales. Two components are directly con-
trolled by the proppant: density and diameter. While much at-
tention is typically given to density, diameter can actually be
of greater importance in a fracturing treatment. As stated in
Stokes law, settling velocity is proportional to particle diameter
squared, thus having an exponentially larger effect on settling
rate than fluid viscosity. Stokes Law may have limitations de-
scribing setting under dynamic conditions in a slurry situation,
but it does serve the purpose to illustrate how smaller and light-
er proppant aid easier placement.
Proppant crush at low concentrations. The typical low-
proppant concentrations pumped in waterfracs often designed
for unconventional gas reservoirs can result in a low areal con-
centration being placed in the frac. Values between 0.25 and
0.50 lb/ft
2
are typical and much lower than the 2 lb/ft
2
used
in the standard ISO/API conductivity test. These narrower
fractures can have an impact on proppant crush. Inside a crush
cell, interior grains are protected, due to their contact with six to
twelve neighboring grains. However, exterior grains have fewer
contact points, leading to greater stress at the points of contact,
Fig. 3. The economic conductivity pyramid showing the three tiers
of proppant. As one moves up the triangle, conductivity improves
[Gallagher 2011].
ultimately fracturing. Therefore, as proppant pack width and ar-
eal concentration decrease, the exterior grains comprise a larg-
er percentage of the total grains in the pack, leading to higher
proppant crush [Palisch 2009].
Some researchers have proposed partial monolayers as a
means to boost conductivity, the idea being that voids between
grains would provide open paths with infinite conductivity
[Brannon 2004, Parker 2005]. Using conventional proppants,
a partial monolayer will occur at concentrations of <0.20 lb/ft
2
,
where less than a single layer of proppant should occur. While
there is significant debate regarding whether partial monolayers
can be reliably achieved over large portions of a created frac [Gid-
ley 1989, Palisch 2008], even if they can be successfully placed,
many people overlook the increased stress concentrated on indi-
vidual proppant grains. This will lead to higher crush, higher em-
bedment, and ultimately, loss of fracture width and conductivity.
Various specialty proppants have been introduced to ex-
ploit the advantages of partial monolayers, as well as purport-
edly to promote their placement. Most of these new proppants
are of much lighter density. In many cases, they do not crush
as conventional rigid particles do, but instead deform, which
is one reason why they are typically only considered useful at
low stress. Independent testing has shown that if these deform-
able proppant grains are actually placed in a traditional pack,
whereby they come in contact with each other, the grains tend
to squish together and create a relatively impermeable plug
[Stimlab 2009-2010].
CASE HISTORIES
When one understands the realistic conditions within the
proppant pack, and their impact on fracture conductivity, it be-
comes apparent that the fracture-flow capacity is not optimized.
One of the easiest ways to increase conductivity is to upgrade
the proppant size and/or type. As one moves up the proppant
conductivity pyramid, fracture conductivity (and production)
improves, Fig. 3. However, this carries with it an increase in
completion cost, so the decision to increase conductivity must
also involve an economic analysis.
What follows are several case histories from unconventional
reservoirs in which proppant was selected, considering the re-
alistic conductivity at bottomhole flowing conditions and the
economic impact on the completion. These cases illustrate the
robustness of our approach, and demonstrate the production
and economic benefits of placing enhanced conductivity in
ultra-low permeability formations.
Barnett shale. The Barnett is a thermogenic reservoir, av-
eraging 4.5% total organic content (TOC). As is the case with
all shale gas plays, the primary challenge is the ultra-low perme-
ability of <0.0001 milliDarcies (md). An actual Barnett Shale
completion was history-matched, and then sensitivities were
performed to several parameters, including fracture conduc-
tivity and fracture stage spacing. The well of interest utilized a
Tier 3 uncoated sand and was stimulated using a slickwater fluid
system. The history match indicated that the realistic fracture
conductivity was ~2 md-ft, and showed that if the conductivity
was increased from 2 md-ft to 20 md-ft, the well would see a
1-Bcf increase in the 15-year cumulative production. The opti-
mal staging between fractures was highly dependent on the frac-
ture conductivity. As the fracture conductivity was increased,
the optimal spacing increased. While all scenarios modeled
would need to be evaluated on a cost vs. benefit basis, the study
illustrated the importance of accurately estimating the realistic
fracture conductivity, as well as the overall value of increasing
conductivity.
Haynesville shale. The Haynesville is a black, organic-rich
shale, with a TOC of 3-5% and 1.3-2.4 vitronite reflectance.
While porosity is moderate (6-12%), permeability is extremely
low (5-800 nD). The Haynesville shale also has elevated tem-
perature (>300 F) and reservoir pressure (0.84-0.88 psi/ft)
[Pope 2009, 2010]. Since most Haynesville operators initially
adapted their frac designs from their experiences in the Barnett,
the primary fluid system of choice was either a slickwater or
hybrid design. Small mesh (40/70 or 40/80) proppant was
primarily utilized, given transport concerns with low-viscosity
fluids. At realistic conditions, Tier 1 proppants have two to 20
times the conductivity as Tier 2 and Tier 3 proppants, respec-
tively [Pope 2009]. However, despite the high temperatures
and stresses, and this conductivity disparity, operators in the
Haynesville have used tremendous volumes of all three tiers of
proppants, due primarily to higher cost and limited availability
of Tier 1 proppants.
This large diversity of proppant usage has allowed for an op-
portunity to evaluate actual field performance comparing prop-
pant types. One such study is comprised of a well set containing
56 wells, operated by the same company within a 5-mi radius
[Pope 2010]. Twenty of these wells were known to contain Tier
1 40/80 LWC, while 36 offset wells were known to contain pri-
marily a Tier 2 40/70 Premium RCS. While there is significant
debate over whether initial production (IP) is a good indica-
tor of completion performance in shale gas plays, the authors
illustrated that increasing the conductivity from Tier 2 to Tier
1 of the fracture yielded a nearly 50% increase in IP, normal-
ized for flowing pressure and lateral length. Over the long term,
a comparison of production for the same operator shows the
Tier 1 wells are producing, on average, 20% more normalized
production after 6 months than the Tier 2 wells. In addition, a
smaller subset of wells (10 Tier 1 and 19 Tier 2), has at least 12
months of production. In these wells, the Tier 1 completions
had produced 30% more normalized production than Tier 2.
The authors hypothesized that this increase may be indicative
of the durability advantage of the Tier 1 proppant [Pope 2010].
Bakken shale. Average porosity at the Bakken is ~5%, and
permeability is on the order of 0.04 mD. While the Bakken is not
as deep or hot as the Haynesville, it is primarily an oil play and,
therefore, requires additional conductivity to effectively con-
vey the oil into the wellbore [Rankin 2010]. Many operators in
the Bakken are using either Tier 1 ceramics or Tier 2 RCS. One
Bakken operator has published results showing the benefits of
increasing the conductivity, while at the same time maximizing
the number of stages in the well, utilizing a plug-and-perf meth-
odology in uncemented liners. Initial publications were based
on a relatively small well count [Rankin 2010], but indicated a
tremendous increase in well productivity when comparing Tier
1 ceramic completions to Tier 3 wells. However, this same op-
erator revisited the well set, adding additional wells and time
data [Vincent 2011]. After nearly two years of production, Tier
1 ceramic wells with more stages are producing twice the pro-
duction of Tier 3 wells with fewer stages. Although the authors
did not provide cost or economic data, it is estimated that the
Tier 1 wells are generating ~$4 million in incremental value per
well after just one year, while the cost to upgrade from Tier 3
and sliding sleeves to Tier 1 and plug-and-perf is approximately
$800,000. This represents a tremendous return on investment,
which continues to grow as the incremental production appears
to increase over time.
CONCLUSIONS
When selecting proppant, one must account for conductiv-
ity reductions, so that the optimal F
CD
and completion can be
employed. In addition, selecting the appropriate proppant for
use in multi-stage fracs in horizontal wells of unconventional
reservoirs requires accounting for several additional impacts,
including flow convergence in transverse fracs, proppant trans-
port if low-viscosity fluids are employed, and proppant crush at
the typical, low concentrations achieved in many resource plays.
The proppant selection process must evaluate the technical
merits of the available proppant options, the resulting impact
on well performance, and the fracture treatment cost. The pro-
cess for selecting proppant is ultimately an economic decision,
based on calculating the conductivity of the fracture at realis-
tic conditions, predicting the production performance for each
proppant option, evaluating the cost vs. benefit of each, and se-
lecting the proppant that maximizes the economics of the com-
pletion. The validity of the analysis must then be confirmed by
the actual field results.
ACKNOWLEDGEMENT
Tis article is based on paper 151128, presented at the SPE Middle East Unconven-
tional Gas Conference and Exhibition held in Abu Dhabi, UAE, Jan. 23-25, 2012.
NOMENCLATURE
ASG Apparent Specifc Gravity
cp Centipoise
P Pressure drop or Delta Pressure
F, deg F degrees Fahrenheit
F
CD
Dimensionless Fracture Conductivity
HMF Horizontal Multi Fractured
K, k Permeability
k
frac
Fracture permeability
k
form
Formation permeability
KCl Potassium Chloride
LWC Lightweight Ceramic
mD milliDarcies
R Radioactive
RCS Resin-coated Sand
SRV Stimulated Reservoir Volume
v Velocity
v
fall
Setling rate
w
frac
Fracture width
YM Youngs Modulus
X
f
, X
frac
Fracture half-length
Coef cient of Inertial Resistance
Specifc gravity
Viscosity
Density
WEB EXCLUSIVE: For literature cited in this article, go to WorldOil.com.
PEDRO SALDUNGARAY is technical managerEAME region for CARBO
Ceramics, based in Dubai, UAE. He has 22 years of experience in the oil
eld with CARBO Ceramics, Schlumberger and Repsol YPF.
TERRY PALISCH is director of petroleum engineering for CARBO
Ceramics in Irving, Texas. Prior to CARBO, Terry was employed by
ARCO Oil and Gas. He earned a BS in petroleum engineering from the
University of Missouri-Rolla in 1986.
weatherford.com
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Fracturing in oil and gas environments requires an ever more sophisticated
approach for maximized results.
Fracology ne-tunes the scope of fracturing by synchronizing these services.
Formation Evaluation revea|s candidate viabi|ity - identies gas content,
qua|ity and storage capacity of the formation to ensure optima| dri||ing and
fracturing approaches.
Wellsite Analysis of core and mud gas samp|es pinpoints pay zones
and uid types - enhances geosteering, we|| p|acement and comp|etion
operations.
Execution Monitoring a||ows fracturing parameters to be ad[usted on the
y for optima| uid/proppant p|acement and resu|ts.
.JDSPTFJTNJD7FSDBUJPO4VSWFZT afrm comp|etion qua|ity and provide a
3-D view of the drainage network to ensure optimized treatment is achieved.
Fracology is another example of Tactical Technology
that can
change the way you think about a|| of your service needs. Contact your
Weatherford representative at fracology@weatherford.com or visit us online
at weatherford.com/fracology. Put science to work in your tight sha|es.
Weatherford puts the science in hydraulic fracturing
for superior reservoir stimulation.
Change to Fracology
4.

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Microseismic reservoir pressure monitoring advances
hydraulic stimulation efectiveness in Bakken shale
Bill Coates, CEO of MicroSeismic, explains how passive seismic technology is poised to be
the next enabler for unconventional reservoir development, and how one operators early
adoption is setting it apart from the pack.
The geoscience community has always been at the forefront
of E&P technology innovation. You only have to think of how
3D seismic has transformed oil and gas exploration, virtually
obsoleting the term rank wildcat, as exploration success rates
have passed 50% in many basins. We have seen the evolution
of time-lapse 3D or 4D seismic; ocean-bottom seismic, using
seabed cables or nodes to produce high-resolution multi-com-
ponent data; permanent life-of-field seismic reservoir monitor-
ing; and marine, controlled-source electromagnetic surveys for
direct detection of hydrocarbons, not to mention high channel
count and cable-free land seismic acquisition. All these devel-
opments have made a huge impact on oil companies E&P suc-
cess, efficiency and bottom lines.
SEISMIC RECEIVERS OPTIMIZE RESERVOIR
DEPLETION
Its not a stretch to suggest that we are now witnessing the
latest technology worthy of joining the geoscience canon of
innovation. Who, after all, would have thought of laying out
hundreds or even thousands of passive seismic receivers over
many square miles to set up what is, in effect, a giant micro-
phone, thousands of feet above a shale oil or gas reservoir.
This microphone allows geoscientists to record and map the
exact location of the cracks created by hydraulic fracture op-
erationsin real time, Fig. 1. It turns out that this technique
offers an exceptionally economic method for monitoring hy-
draulic fracturing operations across a whole shale oil or gas
field. Reservoir engineers can optimize reservoir depletion in
a way previously not possible, thereby significantly increas-
ing the return on a companys asset. Just as important, the
microseismic monitoring system is able to provide the factual
evidence necessary to deflect environmental objections to hy-
draulic fracturing; for example, the perceived threat of con-
tamination to public water supplies.
When MicroSeismic founder and current Executive Chair-
man Dr. Peter Duncan first proposed his idea less than 10 years
ago, it received mixed reactions. In 2005, the company barely
managed to raise the $7 million of start-up money that it be-
lieved would be necessary to bring the concept to market. To-
day, participants in the mushrooming shale plays of the U.S. are
paying close attention, as are companies contemplating similar
operations abroad, such as in Poland, which appears close to
committing to some shale-related production. Last year, the
firm was able to attract an investment of over $100 million to
take its services to the next level.
The companys technology is at the critical intersection of
the unconventional: between a horizontal wellbore, a hydraulic
fracture and a shale reservoir. This technology provides, for the
first time, an accurate picture of how the reservoir responds to
hydraulic stimulation and hydrocarbon production over the life
of the field. The dramatic production results achieved by Whit-
ing Petroleum are a good example of how the technology works.
APPLICATION AT SANISH FIELD
Three years ago, Denver-based independent Whiting Petro-
leum was one of the early adopters of MicroSeismics hydraulic
fracture monitoring system. Among Whitings largest projects
are its North Dakota operations in the Bakken and Three Forks
shale plays, making it the second largest oil producer in the
state, according to the North Dakota Industrial Commission.
The company recently invested in the vendors continuing
services, with the award of a third annual contract last Novem-
ber. The $5.7-million order was for monitoring of Whitings hy-
draulic fracturing operations, including all its Bakken and Three
Forks wells over a 152-sq-mi area in Sanish field, North Dakota.
Sanish field is MicroSeismics largest project to date and illus-
trates both the scale and surprising simplicity of the operation.
Yet it is a technology that transforms the information available
to reservoir engineers during fracturing and production opera-
tions. The conventional downhole monitoring method requires
access to a monitor well or wells in which seismic imaging and
other equipment can be installed. Downhole recording, due to
the smaller size of its geophone array, offers a limited field-of-
Fig. 1. New real-time room where analysts watch microseismic data as it
streams in from the eld.
view, when compared to a larger surface antenna and cannot be
used for long-term reservoir monitoring. There is also a temper-
ature limitation on tools that can be placed in a well. Although
the quality of downhole imaging can be excellent, the accuracy
falls off about 1,500 ft from the geophone string. The process is
essentially a checkand an expensive one at thatas monitor-
ing wells can cost anywhere from $1 to $3 millionto confirm
the execution of the fracturing operation.
EMPLOYING THE BURIEDARRAY SYSTEM
Since using the new technology, Whiting has dispensed with
drilling monitor wells on its vast Sanish field acreage, at a consid-
erable saving in cost and significant improvement in efficiency. It
depends instead upon the BuriedArray system, which is Micro-
Seismics solution for life-of-field monitoring of hydraulic frac-
turing and reservoir production operations, Fig. 2. It is a concept
inspired by passive seismic used for earthquake monitoring and
has been successfully deployed in most of the major shale ba-
sins, including the Haynesville, Eagle Ford, Niobrara, Bakken,
Horn River and Barnett. In practice, a grid of passive seismic
geophones, with some customized modifications, has been bur-
ied in boreholes 3,000-4,000 ft apart, to a depth of between 50
and 300 ft across the entire 152-sq-mi extent of the Sanish res-
ervoir. Each recording station is connected to a custom wireless
network with wind and solar power to charge the batteries that
provide the system electricity.
There is a small crew of geophysicist technicians on the
ground in North Dakota to keep an eye on day-to-day operations,
but data collection from each station is transmitted continuously
to a central recording and processing facility in Denver, Colorado.
The vendors patented Passive Seismic Emission Tomography
(PSET) processing technology is then used to evaluate recorded
data and provide the backbone for integrated answer products
that describe and model the interaction of the formation and the
fracture treatment, Fig. 3. In presentations of the technology, Mr.
Duncan uses the analogy of the doctors stethoscope to describe
how PSET can harness data from all the stations to focus back
on the fracing point. In medical terms, the visual display of data
could be compared to the instant image produced by a CT scan.
The service comapny has processed nearly 160 wells for
Whiting in Sanish field at a rate of eight per month. Because
of the high level of predictability in this particular project, real-
time results have not been deemed necessary, although the ca-
pability is available, and monitoring is always 24/7.
PSET analysis employs some widely-used geophysical
techniques, but the differentiator for Whiting came from its
patented depth-migration algorithms. These provide a com-
plete, and more precise view of the reservoir than classic
downhole microseismic processing, Fig. 4. There are a num-
ber of reasons why this is important. Shale varies from basin
to basin, well to well and even frac stage to frac stage. As new
wells are drilled and produced, they affect other wells in the
field. Reservoirs also undergo change over time in response to
development activity, and this means the optimum fracturing
strategy has to be constantly re-evaluated. Continuous moni-
Fig. 2. A BuriedArray of geophones, deployed across the eld, enables
the monitoring of multiple wells simultaneously over the life of the eld.
Continuous monitoring ensures that operators understand the variability
in shale over space and time. This allows them to adjust completions as
the reservoir changes, maintaining strong production.
Fig. 4. PSET processing and imaging technology identies source
mechanisms that help geologists understand how the rock is breaking
during fracing. Operators use this information to optimize their
completions and eld development strategies.
Fig. 3. Frac monitoring results using MicroSeismics PSET imaging
technology indicate good wellbore azimuth and frac spacing. The
spheres represent seismic events sized by amplitude and are colored by
stage. Operators use this information to optimize well and frac spacing.
toring makes it possible to understand well-reservoir interac-
tion over time. Analysis meetings with Whiting often focused
on the effect of fracturing on neighboring wells. Such discus-
sions on the data opened the door of opportunity to re-think
completion and field development strategies; for example,
identification of re-fracturing or infill well opportunities to
maintain optimum production over the life of the field.
RESULTS
In its 2010 Annual Report, Whiting reported that based on
results of its microseismic studies and reservoir pressure moni-
toring in both the Bakken and Three Forks formations, addi-
tional infill drilling was necessary to maximize recovery in San-
ish field. As a result, the company increased the total number of
gross operated wells that it expected to drill in Sanish field by
153, to 535 gross wells. Whiting also noted that the installation
of 298 permanent geophones across Sanish field had allowed
the company to gather microseismic data on every fracture
stimulation that it had pumped into the field, concluding that
the information had been useful in determining the effective-
ness of our hydraulic stimulations along with assisting in devel-
oping the proper spacing of wellbores in the field.
Whitings experience offers evidence that when it comes to
hydraulic fracturing in unconventional plays, microseismic moni-
toring is extremely helpful. The ability to continuously monitor
has many advantages, including increased production. For exam-
ple, a completion or production engineer can identify the loca-
tion of a mechanical failure and rapidly intervene, lowering the
cost of the intervention and minimizing
lost production. The same applies to ce-
menting or casing failures that are difficult
to determine and costly to a production
program if not detected.
ADVANTAGES OF MICROSEISMIC
In summary, the near-term benefit of
the technology is being able to monitor
and describe the interaction of the reser-
voir and fracture treatment by accurately
placing microseismic events in 3D space.
Integrating wellbore and field-scale geo-
logic, geomechanical and petrophysical
information can provide the best possible
answer on how the rocks are breaking,
and how the reservoir will respond post-
treatment. Since MicroSeismic doesnt
operate a pressure pumping or comple-
tions business, clients receive an unbi-
ased evaluation of the stimulations effec-
tiveness. The long-term benefit is being
able to track changes in the reservoir over
time. Shale is highly variable, and under-
standing that variability is key to main-
taining strong production over the life of
the field. Wells in these plays may show
strong initial performance, but they often
decline rapidly. Without a continuous
stream of microseismic data to evaluate
the reservoir, operators are often left to
guess on potential solutions. Economics
in the shales are finely balanced, and anything that reduces risk
and increases certainty has value.
It remains a fact that the industry has not yet fully realized
what may emerge as microseismic technologys biggest potential
contribution to unconventional resource development. It could
well be that the assurance provided by long-term microseismic
monitoring will counter the many objections being expressed
about hydraulic fracturing, including aquifer contamination and
hydraulic fracturing-induced seismicity (i.e., small earth tremors).
FUTURE OF FRACTURE MONITORING
Currently, countries such as France, Britain and Australia have
put hydraulic fracturing operations on hold, pending further in-
vestigation into the environmental impacts of the process. Delays
always add cost and may limit the pace and breadth of the shale
revolution outside of North America. However, it is clear that be-
ing able to accurately track and report on the progress of fractur-
ing operations is in the interests of oil companies, regulators and
communities at large. Microseismic monitoring should result in
the optimal number of wells being drilled to achieve maximum
production. This is environmentally friendly in itselfless sur-
face disruption and potentially fewer frac jobs. There is no doubt
that hydraulic fracturing is at a critical juncture in terms of public
perception and acceptance. The new technology has the ability to
bring transparency to this process, providing answers to all sides
of the debateoperators, communities, landowners and govern-
ment regulators. This allows all parties to benefit from the signifi-
cant value that shale plays provide.
Can hydraulic fracturing cause earthquakes?
ALI DANESHY, Daneshy Consultants International
During the last several years, there has been media specu-
lation about the connection between earthquakes and oil and
gas operations in general, and hydraulic fracturing in particular.
For people who live near oil and gas producing areas, this can
cause understandable anxiety and discomfort. Unfortunately,
much of the discussion has been based on insinuation and not
on credible scientific observation. This article reviews the sub-
ject from a purely technical point-of-view and offers a summary
of the types of rock failure usually occurring as a result of drill-
ing, completion and production activities, and existing theories
connecting oil and gas operations with formation failure in gen-
eral, and earthquakes in particular.
Technology background. Every formation is under the
influence of underground stresses. These stresses result from
weight of the overlying rock (overburden), fluid pressure, and
geologic and tectonic activities that the formation has expe-
rienced during the millions of years of its life. Stresses in the
formation are divided into two basic types: normal and shear.
Normal stresses tend to compress the material or pull it apart in
tension. Shear stresses tend to tear the material, either by sliding
or twisting action. These stresses have different magnitudes in
different locations and directions, and generally increase with
depth. An important mechanical property of the formation is its
strength. This is usually measured in the laboratory. We usually
measure two types of formation strength: compressive and ten-
sile. Rocks are usually under much stronger compression than
they are under tension.
Formation failure occurs whenever the stresses acting on any
part of the rock exceed its strength. Such failure is limited only
to areas where failure conditions have been met. Failure in hy-
draulic fractruring occurs mainly as a result of tensile stresses
induced by fluid pressure inside the fracture. There is very little
shear failure associated with fracturing, and even then on a very
small and local scale and due to natural fractures or planes of
weakness along the path of the fracture. Because of formation
geological and material heterogeneity (planes of weakness), its
strength varies in different locations and orientations. This re-
sults in local (rather than global) and directional rock failure.
In engineering, failure is usually analyzed using the Mohr en-
velope, Fig. 1. The circle in this figure represents the state of
stress, and its location is based on the magnitudes of the two
normal stresses in that plane. The outside curve represents
strength, and its location is determined experimentally. As long
as the stresses acting in any given plane are such that the corre-
sponding circle does not touch the Mohr envelope, the forma-
tion is intact. If the stresses increase, or rock becomes weaker,
such that the circle touches the envelope, then formation failure
will occur. The side effect of formation failure depends on di-
mensions of the failed volume. If these dimensions are small,
then failure will be very local and often unnoticeable. When the
planes of weakness are large, then the failure can be sensed and
measured at the surface, sometimes even reaching the earth-
quake designation.
In the vast majority of situations, the strength of the forma-
tion rock is higher than the stresses acting on it. The result is
an equilibrium condition, and the formation remains intact.
In tectonically active areas, these stresses change gradually
over time. If and when they exceed the strength of the forma-
tion, then the stress circle grows and touches the Mohr enve-
lope, causing failure. Thus, every rock failure requires either a
changing stress regime, or weakening of the rock. When the
failure occurs over a very large area under large stresses, the
effect is an earthquake.
Formation failure is a common occurrence in oil and gas
operations. The vast majority of these failures are extremely
small in magnitude and limited to the very near-wellbore re-
gion. These failures are often so minor that they can not even
be detected at the surface. In severe instances, they may cause
wellbore collapse or casing shear failure. Even these types of
failure are local and often not even detectable at the surface.
Their main cause is a change in stress state created by drilling
of the well, or local reduction in formation strength. The in-
fluence of drilling-induced failure is very limited and does not
cause any harm to the surface installation.
Removal (production) of oil and gas from the formation
can also cause a change in the state of stress in the overlying
formation, which can result in surface subsidence. Usually this
subsidence is extremely small and detectable only with very
sensitive instrumentation at the surface. The depth of the
formation and stiffness of the overlying rock substantially re-
duce its impact at the ground level. In rare situations, subsid-
Mohr envelope
Normal stress 1 2
S
h
e
a
r

s
t
r
e
s
s
Fig. 1. Mohr envelope of failure
ence can cause obvious effects at the surface. A well-known
example of extreme subsidence was observed in the Ekofisk
reservoir in the Norwegian North Sea during the mid-1980s
that caused partial sinking of the platform. The cause of the
problem was traced back to formation mechanical properties.
The very soft, deformable chalk formation was compacting
unusually large amounts as oil and gas were extracted from
it. The problem was solved by modifications of the platform
structure.
Another manifestation of subsidence may be slippage along
the bedding planes between the layers above the reservoir. In
some instances, this can cause shear failure of the casing. Exam-
ples of this situation have been observed while producing from
the shallow diatomaceous formation in California. Again, the
area influenced by this subsidence has been very small. Aside
from these rare, well-documented examples, the ground subsid-
ence has not caused a disruption for the people or installations
above oil and gas reservoirs.
In order for large-scale ground failure to occur, there needs
to be a combination of two pre-existing conditions: large, natu-
rally existing stresses that are close to the formation mechanical
strength and naturally existing weaknesses that are susceptible
to failure with small perturbations. The most common of these
weaknesses are natural fault planes. In the vast majority of oil
and gas operations, the perturbations in the stress state or for-
mation strength are small and not capable of causing formation
failure. Exploration and development activities usually take ac-
count of existing faults, and generally try to stay clear of them.
In those situations where oil and gas perturbations are known to
have caused earthquakes, the magnitude of these earthquakes
has usually been small.
The first known systematic study of earthquakes being
trigged by human activity was done in the Rangely field, in
Rio Blanco County of northwestern Colorado.
1
The motiva-
tion for this study was the speculation that small earthquakes
near the U.S. Armys disposal well at the Rocky Mountain
Arsenal were triggered by wastewater injection. The fact
that these earthquakes ceased when injection was stopped,
strengthened the possibility of a connection. After extensive
instrumentation and monitoring of the field seismic events,
together with geological mapping, in-situ stress measurement
and rock mechanical studies, it was determined that the cause
of earthquakes was slippage along an existing strike-slip fault
which was, in turn, triggered by an increase in pore pressure
of the reservoir. The engineering explanation was that the in-
crease in pore pressure caused two side effects: reduction in
frictional resistance along the fault plane by lubrication and a
decrease in the effective stress normal to the fault plane caused
by increase in pore pressure. Through rigorous measurements
and computation, the study determined the critical pressure
above which earthquakes would occur.
2
Later manipulation
of the fluid pressure in the field (through fluid injection and
withdrawal) verified the connection between fluid injection
and earthquake occurrence.
A simple explanation of the mechanism is presented in Fig. 2.
During injection, the increase in pressure (P) pushes the circle
to the left, bringing it closer to the Mohr failure envelope. At the
same time, reduction in frictional resistance of the plane of weak-
ness lowers the Mohr envelope. Failure occurs if and when the
moving stress circle touches the lowered Mohr envelope.
Occurrence of an earthquake actually relieves the stresses
and prevents their accumulation, thus reducing the intensity of
the next earthquake. As such, the question remains as to which
option is a safer alternativeaccumulation of stress without
failure to a point of major catastrophic failure, or gradual pe-
riodic relief of lower-magnitude stresses that may prevent the
more catastrophic earthquake. In the report following the
Rangely field study, the authors note that injection-induced
earthquakes had usually been of magnitudes less than 4.5 and
had not caused surface damage. They, therefore, propose that
in areas with a known high risk of earthquake occurrence, one
way of limiting the damage would be to artificially and periodi-
cally induce lower-magnitude earthquakes in selected locations
along the fault plane, thus relieving the stresses and avoiding
their build-up before they cause a more catastrophic failure.
1
A
careful examination of this mechanism leads us to conclude that
oil and gas production should actually inhibit earthquakes, sim-
ply because it causes a reduction in pore pressure, thus pushing
the circle away from the failure envelope. In fact, as stated earli-
er, in the Rangely field experiments, earthquakes stopped when
pore pressure along the active fault was artificially reduced by
fluid withdrawal.
Under very special circumstances, there are some studies
that have also linked ground seismicity with production op-
erations. Production of fluid causes formation shrinkage. If
the reservoir is in close contact with a pre-existing fault, and
if due to formation heterogeneity the fluid pressures are dif-
ferent on the two sides of the fault, then differential shrinkage
of the rock may cause a stress build-up along the fault plane.
Failure can occur if the stresses on the fault plane exceed the
shear strength. Failure of this type has been reported to have
occurred in South Texas.
3
Whether in connection with fluid injection or withdrawal,
the common denominator of all reported ground seismicity has
been existence of two conditions:
Pre-disposition to failure, due to existing natural planes of
weakness (faults) in the formation
Narrow gap between formation strength and existing stress
state
Under these conditions, the production or injection of fluid
can cause earlier formation failure at lower stress levels. This
will actually reduce the severity of possible surface damage
when compared with failure at later stages at higher stress levels.
Mohr envelope
During injection
Initial state
Initial state
Normal stress 1 2
P
S
h
e
a
r

s
t
r
e
s
s
Fig. 2. Failure mechanism associated with uid injection
Impact of hydraulic fracturing. Some recent news reports
have insinuated a connection between hydraulic fracturing
and occurrence of earthquakes. Although hydraulic fracturing
is the result of formation failure, the nature of this failure is
very different than those discussed earlier. The main failure
mode in earthquakes is shear, while the dominant mechanism
for hydraulic fracturing is tensile. This is an important distinc-
tion. The orientation of the fracture is usually vertical and
perpendicular to the minimum in-situ principal stress. There
is very little, if any, shear stress acting along this plane. Thus,
chances of shear failure along the fracture plane are very slim.
Furthermore, hydraulic fractures extend a very short distance
away from the wellbore (relative to the size of faults or other
naturally existing weaknesses in the formation that can trig-
ger earthquakes). Therefore, at worst, their impact is very lo-
cal. Presence of multiple fractures in horizontal wells creates
a fractured zone and may reduce effective bulk strength of
the formation. But even if these fractures are within an area
already pre-disposed to earthquakes, the reduced strength of
the rock causes the earthquake to occur at lower stress levels,
thus reducing its intensity and damage. Due to higher pres-
sures created during fluid injection, such earthquakes are
more likely to occur while fracturing. The author is not aware
of any reports of such occurrence.
After the fracturing operations, production of reservoir flu-
id reduces fluid pressure within the reservoir, and therefore,
chances of any later earthquake.
Another important operational aspect of oil and gas produc-
tion is the urge to avoid major faults while planning a fracturing
operation. The reason is the uncertainty in reservoir properties
on the two sides of the faults and the fear of operational prob-
lems while fracturing that may be caused by these faults.
Conclusion. If a formation is already predisposed to shear
failure, then injection of fluid may trigger earlier occurrence of
that failure. When the existing stresses within the formation are
large enough to cause an earthquake, then injection of fluid may
trigger it to occur earlier. This should be tempered with two
other effects; earlier triggering reduces intensity of the earth-
quake and its damage, and the redistribution of the stresses after
the earthquake reduces the intensity of any subsequent failures.
There have been no reported cases of earthquakes occur-
ring during or as a result of hydraulic fracturing operations.
The technical reason for this is that hydraulic fracturing is
caused by tensile failure of the formation. Earthquakes are
caused by shear failure along existing massive planes of weak-
ness in the formation. The magnitude of shear stresses along
the fracture plane will be extremely small (if any at all) and
definitely insufficient to cause an earthquake.
LITERATURE CITED
1. Raleigh, C. B., J. H. Healy and J.D. Bredehoef, An experiment in earthquake control
at Rangely, Colorado, Science, vol. 191, pp. 12301237.
2. Haimson. B. C., Earthquake related stresses at Rangely, Colorado, Proceedings of 14th
Symposium on Rock Mechanics, (1972), p. 689.
3. Pennington, W. D., S. D. Davis, S. M. Carlson, J. Dupree and T. E. Ewing, Te evolu-
tion of seismic barriers and asperities caused by the depressuring of fault planes in the
oil and gas of south Texas, Bulletin of the Seismological Society of America, vol. 76, pp.
939948.
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Software puts sharper scientific focus on shale
reservoir parameters
In many cases, the
maximum poten-
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plays is not real-
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titude concerning
drilling and frac-
ture stimulation
activities. Because rocks are heterogeneous, particularly in shale
plays, a more scientific approach is required to reveal each reser-
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content, physical properties and potential for oil and gas. This
challenge prompted Weatherford to develop the Fracology pro-
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companys scientific evaluation offerings, technologies and in-
field experience, such that each wells fracturing program is de-
signed, developed and evaluated to ensure optimal economic
productivity. The software helps put a sharper scientific focus
on the various physical, geological and geochemical parameters
of a shale reservoir, even those that have been historically ne-
glected. This helps the fracture stimulation to yield the best
possible outcome in terms of production and field life.
Increasing visibility propels advances in frac fluid
chemicals
Calls for making the con-
stituents of frac fluid chem-
istries more visible are chal-
lenging companies to
develop new high-perfor-
mance frac fluid chemistries
that satisfy regulatory environmental mandates and also help op-
erators comply with requirements at specific wellsites. Champion
Technologies recently introduced a new scale inhibitor and a new
biocide that provide high levels of performance in numerous
shales, coupled with much-improved environmental attributes.
The new scale inhibitor, Gyptron T-475, blends partially neutral-
ized specialty phosphonates with cross-linked gel system frac flu-
ids, used to boost carrying capacity in many shale plays. It pre-
vents deposition of all common mineral scales by inhibiting and
distorting crystal growth, even in the presence of as much as 200
ppm of iron. The chemistry can be winterized to 40F and is com-
patible in high-TDS brines. At the wellsite, the inhibitor can be
pumped at any time, at recommended dosage rates of 500 to
1,000 ppm. One of the new biocides, Bactron K-31W, is an all-
purpose, non-foaming, aqueous glutaraldehyde solution that
controls aerobic and anaerobic bacteria in fresh water, sea water
and most brines during drilling, workover or completion opera-
tions. Developed to be cost-effective in cold climates, the product
can be introduced by batch application or continuous injection
into water-handling systems, or down the annulus of water-injec-
tion or water-supply wells or production wells.
Logging-while-tripping evaluation technique
Horizontal open-
hole well logs opti-
mize hydraulic
fracturing pro-
grams in laterally
drilled resource
plays by allowing
accurate planning
and placement of
fracture intervals.
A comprehensive
logging suite provides formation evaluation that makes orders
of magnitude more accurate logs, rather than the rudimentary
gamma ray and strip logs normally used for evaluating horizon-
tal legs. Rather than pumping blindly into pre-set intervals, logs
ensure expensive fracturing horsepower is not wasted in non-
productive formationsor worseapplied to environmental-
ly sensitive zones. Datalogs Logging While Tripping (LWT) is
a patented formation evaluation technique in which full-suite,
openhole logs are acquired in a method that is more cost-effec-
tive, while using less rig time and having fewer inherent risks
than wireline, drill pipe-conveyed, or logging-while-drilling
methods. LWT allows open hole logs to be acquired in horizon-
tal and hostile hole conditions, where logging was previously
impossible or considered uneconomic.
20,000-psi pump increases barrel rates
AXON Energy
Products has intro-
duced its HD-
2500 pump, add-
ing its HD-500,
HD-7000 and
HD-1500 pump-
ing technology
line. This new of-
fering is a 2,500-hp
pump utilizing an optional uprated 3-throw or 5-throw crank
with 10-in. displacement. With an increased rod load of 250,000
lb, this rugged pump can realize pressures up to 20,000 psi while
delivering higher barrel rates. The company has optimized the
materials and manufacturing processes in the HD-2500, assur-
ing the end user of reliable performance in the most rigorous
applications. The pump is available in more configurations than
any other in its class, enabling you to maximize performance for
your application.
High-pressure nitrogen, air booster saves space
offshore
The Atlas Copco Hur-
ricane M-41/1000
high-pressure nitro-
gen and air booster
has a small footprint
for installation on
drilling rigs, as well
as mobile drilling
platforms. It is avail-
able in flexible volu-
metric capacities.
The booster also of-
fers several options for
the units prime mover, including a
hydraulic motor, PTO/belt drive, and the option
of a diesel engine or electric motor. The M-41/1000 is
equipped with the features of the new B 41/1000, including
350-psi maximum suction pressure at 1,000-psi discharge pres-
FMC designs, manufactures, installs
and services our high-pressure tree and
manifold systems so you can be sure
that open means open and closed
means closed with no unplanned
downtime. Our patented large bore
isolation sleeves protect your wellhead
investment and provide the fullbore
access that you require to efciently
and safely complete your well. FMC
will help you get it right the rst time,
and youll notice the difference in your
bottom line as well as your uptime.
nstalls
tree and
e sure
losed
nned
bore
ellhead
llbore
iently
FMC
t time,
in your
me.
We put you rst.
And keep you ahead.
Copyright FMC Technologies, Inc. All Rights Reserved.
sure. The maximum capacity of this booster module is 2,440
scfm. It features forklift pockets in the base frame, a remotely-
mounted control panel, and a digital temperature scanner. The
companys wide range of boosters 600 to 1,200 psi at 1,400 to
2,500 cfm for single-stage, and 1,200-to-5,000-psi at 500 to
4,500 cfm for multi-stageenables users to select a solution for
every application.
Expandable solid-steel liners maximize outflow
performance
Enventure has de-
veloped a suite of
three expandable,
solid-steel liner
products that help
ensure successful
hydraulic fractur-
ing of a well. The
products, known
collectively as
FracSET, are de-
signed to maxi-
mize production,
restore well integ-
rity for operations and production, and maximize reserves.
Maximizing production is accomplished by using the MaxFrac
expandable solid-steel liner to tie back to 51/2-in. or 7-in. casing
to maximize lateral ID for optimal fracturing, maximum out-
flow performance, and ease of re-entry. It is also used to custom-
ize frac interval spacing for frac-stage isolation by using solid-
expandable and swellable elastomer technologies. The liner
system maximizes reserves by providing mechanical isolation of
perforations and frac stages for optimizing refracturing, to stim-
ulate new reserves and re-open fracture networks. The entirely
expandable product is suited for moderate pressures (to 8,000
psi differential) and temperatures (to 200 F) in 51/2-in. and
7-in.base casing. The partially-expandable ReFrac system is
suited for HPHT conditions (to 10,000 psi differential and 400
F) in 41/2-in. and 51/2-in. base casing. Restoring well integrity for
fracturing operations and production is achieved by using the
FracSET Repair expandable solid-steel liner, which employs
single-joint lengths (up to 60 ft) to isolate casing splits, parted
casing, failed frac-port sleeves and perforations.
Experts provide life-cycle water management
solutions
Now more than
ever, water is inte-
gral to the success
of oil and gas opera-
tions. As water re-
quirements for hy-
draulic fracturing
increase, source wa-
ter limitations, in-
frastructure-related
development, fluid handling and the complexity of treating and
disposing of produced water all become greater challenges. Select
Energy Services Fluidity experts provide comprehensive water
management solutions capable of lowering costs for approval for
expenditure (AFE) and lease operating. From water sourcing and
transfer to reuse and disposal, the program offers cost efficient,
reliable and environmentally friendly management solutions to
every phase of drilling and completion operations. Through the
Fluidity division, operators have access to an experienced team of
hydrologists, chemists, project development professionals and
PhDs. They combine the expertise of Select Energy Services Wa-
terOne and WellOne divisions to engineer an all-inclusive water
solution at every phase of the water cycle.
Intelligent wireless system monitors fracing
downhole
Tubel Energy has
developed a wire-
less system to
monitor pressure,
temperature and
fluid identification
in the wellbore be-
fore, during and
after fracing the horizontal section of a well. The Intelligent Frac
Monitoring System is deployed permanently in the wellbore
with the frac pipe string. Up to 256 monitoring systems can be
deployed in a single horizontal section. One system can be de-
ployed in the entrance of the horizontal section to monitor all
fracs. Multiple monitoring systems can be deployed to monitor
individual zones. The technologys ultra-low power consump-
tion allows for operation in the wellbore for an average five
years after the frac is completed. The wireless communications
capability eliminates the need to deploy cables in the wellbore
for data transfer. The system can collect data as fast as one sam-
ple per second. This monitoring can be used to collect a fracs
pressure build-up in the reservoir, as well as the pressure drop
once the frac is achieved. The system will indicate that the frac
was performed properly and that no over-frac was done that
could damage the formation. A second pressure gauge can be
placed outside of the system to monitor annulus pressure for
zone leaks, reservoir monitoring and cross-zones fluid commu-
nications. A new fluid identification sensor package monitors
water production, allowing the operator to determine the zones
that are producing water in the horizontal section.
Multistage fracturing system for 60 stages downhole
Packers Plus Energy Services has released its QuickFRAC
technology, which is capable of fracturing 60 stages downhole
while only pumping 15 treatments at surface. By taking a single
pumping treatment on surface and precisely directing it into 2
to 5 stages downhole. Using limited entry diversion techniques
and our proprietary technology, the system allows operators to
fracture several isolated stages at one time through a process
known as batch fracturing. This configuration creates multiple,
individually isolated stages within a single treatment zone.
Frac isolation system promotes unlimited stages,
stage spacing
NCS Energy Ser-
vices Multistage
Unlimited frac iso-
lation system com-
bines a coiled tub-
ing-deployed tool
assembly with me-
chanically-shifted
sliding sleeves to
perform multi-
stage frac comple-
tions without perforating guns, pumpdown plugs, or sleeve-ac-
tuating balls. The system permits virtually unlimited stages and
stage spacing. Multi-stage sliding sleeves are run and cemented
as part of the casing string at planned frac initiation points. Dur-
ing completion, the tool assembly is run to the toe on coiled
tubing. At each stage, a resettable bridge plug seals and grips the
inner barrel of the sliding sleeve, isolating the target formation
and allowing coiled tubing weight and annular pressure to shift
the sleeve, to open the frac ports. The frac is pumped down ei-
ther the coiled tubing/casing annulus or the coiled tubing (low-
rate fracs). After the frac, pulling the coiled tubing opens the
equalizing valve and unsets the bridge plug, and the assembly is
moved to the next sleeve. Time between fracs is only about five
minutes. With a circulation path to the frac zone via the coiled
tubing, the system offers significant advantages over other
multi-stage methods. Frac pressure at the formation can be
monitored via the coiled tubing deadleg. Pump rates, pressure
and sand loading can be adjusted to control frac dimensions and
improve frac results. Fluids and sand can be circulated to the
target zone before fracturing. Less fluid is lost to the formation,
compared with bullheading fluids down the casing. Overall wa-
ter savings can be as high as 50%. Sandouts are quickly removed
with reverse circulation, permitting aggressive sand concentra-
tions and reducing nonproductive time.
Manifold system fits wide range of pad
configurations, well spacing
As operators started to frac multiple wells, they recognized the
risk, cost, environmental and safety impact of setting up to frac
wells on location. Responding to these concerns, and the need
for a multiple well frac system, Robbins & Myer has introduced
its T3 Frac Manifold Optimization System (FMOS) and flow-
back trees. The system allows producers to safely extract natural
gas and oil from shale formations and has been modularized
to accommodate a wide range of pad configurations and well
spacing. The unique design of this full-bore system allows con-
tinuous operations that are started and completed more rapidly,
safely and economically. FMOS is powered by the companys
T3 HPT valves, which contains metal-to-metal seals and are
specifically designed for high pressures and highly abrasive ser-
vice in frac applications. This technology minimizes frac sand
bypass and is used for the entire flow path of the frac tree.
Straddle system handles multiple-set operations
The TAM PosiFrac Straddle System is a tool assem-
bly that can be used for a wide array of applications,
such as inflating casing annulus packers, acidizing,
fracturing, flow testing, washing perforations, pres-
sure testing and more. The system is designed for
multiple-set operations and meeting various needs,
such as larger borehole ID, horizontal applications
or special testing programs. It can be deployed on a
jointed pipe or coiled tubing. The system is func-
tional in both cased-hole and open-hole condi-
tions. There are two types of lock-set mechanisms
available. They include rotation lock, or set-down
weight lock systems. The systems standard config-
uration is rated for a maximum working pressure of
5,000 psi and a maximum working temperature of
300F. Unique features include two separate sealing
element packers, allowing for space-out between
the packers to accommodate specific well and/or
treating interval requirements. The elements,
which inflate simultaneously, are designed and
manufactured for resistance to corrosive fluids.
Benefits include the ability to retain acid in the
string through the use of the TAM Fluid Control
Valve while moving between intervals in the
wellbore. Treatment and testing of over 100 inter-
vals has been achieved in a single deployment of the
system. The systems multi-set capability includes
setting within open perforations, and selective
treating of intervals from 3 ft and longer.
Multi-well manifold increases pumping efficiency
Supreme Services has in-
troduced its Single Pad
Multi-well Manifold
(SPMW), which offers
time-saving, safe oper-
ations while delivering
pumping efficiencies
when stimulating multiple
wells on a single pad, including
during fracing. The manifold is a fully
hydraulic, remotely operated, stimulation manifold that can safe-
ly isolate each well while allowing simultaneous operations. The
firm has been successful running wireline tools, pumping down
perforating guns and plugs, and performing various flowback
operations, all while the next well is being stimulated. The mani-
fold is versatile and can be used on pads with 2-6 wells, all while
maintaining pump rates up to 100 bbl/min. Custom modifica-
tions for a larger quantity of pad wells are readily available. The
manifold has an offline assembly that saves frac time and expense
and, to maximize safety performance, the technology is built
with fully hydraulic actuation, allowing for remote operations.
The tool permits continuous pumping on a multi-well stimula-
tion, and it has a compact footprint for tight locations.
T3 Frac Manifold System
OP T I MI Z E YOUR MULT I - WEL L PA D F R AC OPER AT I ONS!
T3s Frac Manifold System optimizes your frac operations
while focusing on safety. Designed especially for multi-well
pad frac operations, this rugged system is loaded with features
that signicantly reduce days on site and increase uptime on
pump trucks.
- Modular design allows Ior Iaster rig in/rig out
- Full bore system delivers higher Irac rates
- 5imultaneous well intervention capabilities
- Full automation package
Want to know more about T3`s Frac ManiIold 5ystem?
Call +1-713-996-4110, email sales@t3energy.com or visit
www.rmenergy.com.

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GEOLOGY & GEOPHYSICS

COILED TUBING TECHNOLOGY

2012 Halliburton. All rights reserved.

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2012 Halliburton. All rights reserved.

For steady- or pseudosteady-state flow in oil wells, several

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