Epm 7

EPMAG.
COM
J U LY 2 0 1 2
Intelligent
Operations
Cost & Risk
Management
Land Seismic
MWD/LWD
Production
Logging
Construction
& Installation
REGIONAL
REPORT:
Mediterranean
Interest
is
growing
drop by
drop
*11
t
i
\. \
.s r -
IN.
UL
41
The clear choice for complete rig

packages backed by the strengths of
CAMSERV Aftermarket Services.
With the acquisition of TTS Energy, Cameron offers Total Rig Package solutions to give you
a true choice in supp liers for all your drilling needs . We bring together a comprehensive
portfolio of best - in-class products with state - of-the-art automated control systems to
deliver new levels of efficiency, quality and safety . Backed by CAMSERV '"' , Cameron 's
industry-leading aftermarket services , you benefit from full lifecycle support and 24/7
responsiveness around the world . Total solutions . Total reliability . All from Cameron .
For more information , visit www.Camero ,Ac quiresTTSEnergy. com
RAISING
PERFORMANCE . TOGETHER TM
CAMERON
"1 1
1
1 1.
'
- 1
:
s
"
.
'
"
_
,
EDMOND .
.1
oI
T
-j a m
1
a
'
w
-
el,
_'
'A
41i Oe
ILI
-
I
r
I
I
I
I
.
7
STS
` +.
r
.
%
'
AI
41P
ALVARADO, TX
t,
10
j^
'
`
",
t
40
Parts and Service
Centers close to you

- Utica / Marcellus Shale
- Barnet Shale
- Eag le Ford Shale
- Permian Basin
- Canada
- Woodford Shale
- Bakken Shale
rthr:staffed 5ervice:Lenters'located in every major
rbon-producing region T A t ine ns wheriyou call

on. day.or.rf ght,'.thE ports'.yorr need are right down
road andOnfymomen ts Aw ay. from being do dedonto
of our deliwryv.ehidesand sent out toyou..We can
fluidends andmnsumeble partsl equipment rebuilds,

pgwei`endand fluid-enid pimp rebuilds -we've get
you catirered.andrikeall Dragon equlpment ourporrtp
partsare made In the U SA and severe-duty engineered
to performirithe harshest praductian.erwirorinaerits
rfattt crrwira AMd turreert a
RAGO
Make it happen.
EXPLORATION & PRODUCTION

WORLDWIDE COVERAGE
A H A R T E N E R GY P U B L I CAT I O N
INTELLIGENT OPERATIONS
44
J U LY 2 0 1 2
VO L U M E 8 5
ISSUE 7
w w w. E P m a g . c o m
COVER STORY: GLOBAL SHALE OIL REPORT
Launching the next decade of smart solutions
COST AND RISK MANAGEMENT
48
M&A transaction risks can hamper growth
54
Pore pressure monitoring optimizes

deepwater wells
56
Mitigating risk a competitive advantage,

potential life-saver
LAND SEISMIC
60
Low-impact seismic acquisition illuminates

oil shale
64
Land technology surpasses expectations
32
Shales ripple
effect goes global
Shale has been making the biggest noise heard
in the oil and gas industry for some time, with
North Americas pioneering role to the fore. But
a global picture is starting to emerge.
MWD/LWD
68
72
New sonic tool matches wireline data quality

Logging the Martian oil well
40
South America rising

Argentina and Colombia are hot on
the shale trail.
PRODUCTION LOGGING
76
78
System provides flow profiling on demand

HP/HT logging challenges equipment
Heavy-lift vessels tip the scales
88
Speed, strength, and flexibility are key

for offshore construction players
90
MERITORIOUS AWARDS
FOR ENGINEERING
INNOVATION WINNERS
98
REGIONAL REPORT:
MEDITERRANEAN
Technology aids
fracturing success
The growing emphasis on completion
technology in North American E&P could
be a double-edged sword
CONSTRUCTION & INSTALLATION
84
IndustryPULSE:
12
WorldVIEW:
Value-driven strategy
starts to deliver results
Faced with declining reserves,
Mexicos national oil company gets
serious about exploration.
80
Unconventionals:
Niobrara
School is out, but Niobrara
operators are still learning
Although it is early days for the Niobrara,
this liquids-rich Rocky Mountain play has
operators and analysts abuzz.
Ml51,
DEPARTMENTS AND COMMENTARY
AS I SEE IT
Weve got our work cut out for us
MANAGEMENT REPORT
ESP startup takes new approach to US artificial lift market
I
I
16
DIGITAL OIL FIELD

Realizing the returns of an integrated control
and monitoring architecture
18
Big data elevates the game
20
EXPLORATION TECHNOLOGY
Simultaneous sources move offshore
:4
25
WELL CONSTRUCTION
What goes around comes around
k
27
PRODUCTION OPTIMIZATION
Light well intervention systems perk up maintenance market
29
OFFSHORE ADVANCES
Meeting the challenges of our
customers has always been
the focus of our work , and it
continues to be the measure
of our success today.
The relationships we build
with operators have helped
M-I SWACO people keep a
close eye on the issues faced
during drilling, completion and
production.
Our collaborative approach
has generated a number of
technical innovations to meet
the changing needs of our
customers such as exploiting
unconventional resources and
defining industry best practice.
When you need solutions
and technologies to address
your next challenge-from
advanced fluid systems ,to
individual tools and equipment ,
to modeling software-you
know where to look.
Mi SWACO
A Schlumberger Company
www.miswaco .slb.com
It aint over yet
31
TECH WATCH
Gas hydrates mapped using marine CSEM methods
92
TECH TRENDS
94
INTERNATIONAL HIGHLIGHTS
ON THE MOVE/INDEX TO ADVERTISERS
102
106-107
LAST WORD
Curbing perception by telling the truth
COMING NEXT MONTH
108
The August issue of E&P takes a close look at national oil companies
and their important role in the global energy mix. Other features will examine production quality
improvement, rock physics, water management, downhole systems, and EOR, while regional features will
focus on the North Sea and the Granite Wash shale play. As always, while youre waiting for the next copy
of E&P, remember to visit EPmag.com for news, industry updates, and unique industry analysis.
ABOUT THE COVER Worldwide shale resources are abundant, and countries
around the globe are encouraging shale oil and gas development, though at a less
frenzied pace than in North America. On the left is Santorini Island in the
Mediterranean Sea. Companies like Noble Energy have had tremendous success in
the Eastern Mediterranean. (Cover design by Laura J. Williams)
E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston,
Texas 77057. Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149;
2 years (24 issues), US $279. Single copies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER:
Send address changes to E&P, PO Box 5020, Brentwood, TN 37024. Address all non-subscriber correspondence to E&P, 1616 S. Voss
Road, Suite 1000, Houston, Texas 77057; Telephone: 713-260-6442. All subscriber inquiries should be addressed to E&P, 1616
S. Voss Road, Suite 1000, Houston, TX 77057; Telephone: 713-260-6442 Fax: 713-840-1449; custserv@hartenergy.com. Copyright
Hart Energy Publishing, LP, 2012. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine. No article may be
reproduced or transmitted in whole or in parts by any means without written permission of the publisher, excepting that permission to
photocopy is granted to users registered with Copyright Clearance Center/0164-8322/91 $3/$2. Indexed by Applied Science, Technology
Index and Engineering Index Inc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to
$25,000 for violations.
Printed on
recycled paper
ONLINE CONTENT JULY 2012
PREMIUM CONTENT
Subscribe @ EPmag.com/explorationhighlights
New reservoir discovery

in Mnazi Bay, Tanzania
An exploration well in Tanzanias offshore Mnazi
Bay block penetrated a gas-bearing zone. The
#1-Ziwani, operated by Maurel et Prom, was
drilled to 2,671 m (8,763 ft), and the gas-bearing zone was found between 1,106 m and 1,109 m (3,629 ft to 3,638 ft).
Three Tuscaloosa Marine shale producers

reported by Encana
The company completed three Tuscaloosa Marine shale wells
along the Mississippi-Louisiana border. The #1 Horseshoe Hill 10H is
in Wilkinson County, Miss., and had an initial 30-day production rate
of 656 boe/d. Drilled to 5,856 m (19,212 ft), 3,956 m (12,980 ft) true
vertical depth, in Section 10-1n-1w, the venture was completed with
18 stages of fracture stimulation.
, t rf
Apache plans two Cook Inlet exploratory tests

According to IHS Inc., Apaches #1 Aspen wildcat is planned for the
western side of the inlet in Section 33-12n-11w, Seward Meridian. The
#1 Captain Boomer is on the eastern side of the inlet in partially submerged Section 1-9n-9w, Seward Meridian.
AVAILABLE ONLY ONLINE
WGC 2012: Algeria prepares

for first shale well
By Scott Weeden, Senior Editor, Production
The first phase of Algerias shale gas

exploration involved defining the resource.
Sonatrach expects to drill its first shale well in
2Q 2012.
Newbuild rigs, higher rates illustrate

expanding offshore demand
By Richard Mason, Chief Technical Director,
Upstream
Global drillship construction has reached the

53-unit mark while day rates for deepwater
and ultra-deepwater rigs continue to reach
new highs above US $600,000/day.
Gulf Of Mexico operators navigate

Brave New World
By Nancy Agin, Associate Managing Editor
With activity ramping up two years

following the Deepwater Horizon incident,
drillers continue to face significant operating
challenges in the region.
WEBINARS
Building in Change:
Project Construction
in Asset Intensive
Industries
Every Rock
Tells a Story
Revolutionize Your
Tobin Map Data
rock telling you?
T. Boone Pickens:
A Conversation
About Energy
Policy, Natural
Gas And Jobs
How Shale Gas
is Driving a US
Petrochemical
Resurgence
READ
TH
LATES E
T
EPmag
.
com
INDUS
TRY
NEWS
What 's your reservoir

Understanding rock behavior can hel p you
make the best decisions while developing
your reservoir , from determining where to
drill to creating a comp letion strategy.
With a scientific approach that spans
decades , TerraTek " expertise turns the
complexities of reservoir rock into
actionable information you can use.
www.slb .com/TerraTek
Schiumberger
NTELLIGENT COMPCETIUNS'
-law
With 570+ SmartWell

system installations,
efficient reservoir
management is now
business as usual.
4
'- s
'r
il
'
'
,ar e.,
In deep water , operators have no room for error-or lost time. Proven,
reliable SmartWell " system technology from Halliburton (the industry 's
intelligent completions pioneers and leaders since 1997) delivers greater
efficiencies via reduced capital expenditures and operating expenses , plus
improved production and ultimate recovery.
Halliburton experts have engineered and installed 570+ intelligent
completions-more than anyone else-for the world' s smartest operators.
What 's your completions challenge?
For information and solutions, go to halliburton .com/smartwells .
Solving challenges:
HALLIBURTON
y
t
k a
sfy.
.. .
As I
RHONDA DUEY
1616 S. VOSS ROAD, STE 1000
HOUSTON, TEXAS 77057
P: +1 713.260.6400 F: +1 713.840.0923
www.EPmag.com
SEE IT
Executive Editor
rduey@hartenergy.com
Read more commentary at

RHONDA DUEY
Executive Editor
EPmag.com
JO ANN DAVY
Group Managing Editor

Senior Editor, Production
SCOTT WEEDEN
Senior Editor, Offshore
MARK THOMAS
Chief Technical Director,

Upstream
RICHARD MASON
NANCY AGIN
Associate Managing Editor
CODY ZCAN
Assistant Editor
ALEXA SANDERS
Corporate Art Director

Senior Graphic Designer
LAURA J. WILLIAMS
Production Director
JO LYNNE POOL
Reprint & PDF Sales
ERIC MCINTOSH
Director of Business Development
ERIC ROTH
RUSSELL LAAS
Group Publisher
Editorial Advisory Board

CHRIS BARTON
Sr. VP Business Development, Oil & Gas., KBR
KEVIN BRADY
VP, Sales & Marketing,Verdande Technology Inc.
MIKE FORREST
Exploration Consultant, formerly with Shell
JOHN M. GILMORE JR.
Director of Global Industry Solutions Upstream
Oil & Gas, Invensys Operations Management
CHRIS JOHNSTON
VP & Managing Director, North America, Ensco
ULISSES T. MELLO
Manager, Petroleum & Energy Analytics, IBM
DONALD PAUL
Executive Director, University of
Southern California Energy Institute
EVE SPRUNT
Business Development Manager,
Chevron Energy Technology Co.
MANUEL TERRANOVA
Sr. VP Regional Operations & Global Sales,
Drilling & Production, GE Oil & Gas
RONNIE WITHERSPOON
Sr. VP of Marketing & Business Development,
Nabors Drilling USA LP
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.
HARTENERGY
Editorial Director
PEGGY WILLIAMS
Senior Vice President, Consulting Group
E. KRISTINE KLAVERS
President & Chief Operating Officer
KEVIN F. HIGGINS
Chief Executive Officer
RICHARD A. EICHLER
Weve got our work

cut out for us
I
n college I learned about the hierarchy of values, in which people evolve

from purely selfish beings (as small children) to having an ultimate sense
of right and wrong. Along the rungs of this hierarchy are several steps,
including the step just below the top, where people are faced with ethical
dilemmas and dont always make the right choice.
Studies have indicated that many of the protestors during the Vietnam War
were at this phase in their ethical development. However, others were at a
much lower stage, where if something felt good, they did it skip school,
burn flags, do copious amounts of drugs, and hurl insults at the police.
Somehow the oil and gas industry is the modern version of the Vietnam
War. Between the Occupy movement and the hue and cry over hydraulic
fracturing, protesting is becoming almost a vocation. No doubt some of these
people are very sincere, though possibly misled, about the evils of the industry. But I think others just enjoy the party atmosphere of a good solid protest.
Take tiny Erie, Colo. Energy In Depth recently reported on a petition
brought forth against natural gas development in Erie and the surrounding
area. Copies of the petition were delivered by Erie Rising activists (and
their children) to Encana Corp.s US headquarters in Denver as well as the
governors office. The event was captured by local news crews.
At first blush the petition was impressive 21,000 people signed it on
behalf of Erie. But only 100 of those signatures were those of Erie residents.
The rest were gathered over the Internet from often far-flung locales like
Greece and Australia. In fact, only 1,000 signatures were gathered from the
entire state of Colorado.
Winning the approval of celebrities and out-of-state activists has come at a
price, wrote Courtney Loper of Energy In Depth. The remarkably low number of local names on the petition proves Erie Rising has lost credibility
where it really counts: in the actual town it claims to represent.
This bears out my personal experience as well. Last year E&P reported on
a protest in Dimmock, Pa., in which hardly anyone from Pennsylvania was
represented, let alone local residents. And Harts DUG and DUO conferences typically generate some protestors, although at the recent DUO conference in Denver they showed up late because theyd been up late the night
before protesting a city council vote on the homeless.
Interesting career choice. All we can counter it with is education. I have no
hard and fast answers if I did, I would be implementing
them. But the industry is long overdue for a public
relations campaign. I applaud the efforts of organizations like Energy In Depth and encourage our readers
to support them in any way they can.
7
industry
PULSE
Technology aids fracturing success

The growing emphasis on completion technology in North American E&P could be a doubleedged sword.
Scott Gruber, Bernstein Research
s shale euphoria swept through the North American

E&P industry during the late 2000s, the primary
advancement in shale development strategy involved
scale. Production was enhanced with longer laterals and
increased segmentation.
As a consequence, demand surged for standard shale
development equipment. Given this emphasis, equipment providers have been the primary beneficiaries of
the shale revolution to date. However, as equipment utilization and pricing normalizes, value creation could
transfer toward technology.
Faster fracing
Plug and perf (PNP) is the traditional method of executing a multistage stimulation program. This method
involves cementing in production casing in the lateral section of the well. The section to be fractured is isolated by
setting bridge plugs via wireline or coiled tubing (CT).
Next, the casing is perforated, and the frac fluid is
pumped into the well. This process is repeated until each
stage is fractured. Finally, CT is used to drill out the plugs
and open the well bore for production.
Stimulation dominates spending in plays such as the Eagle Ford.

(Images courtesy of Bernstein Research)
While PNP is reliable and the components are typically

readily available, it requires multiple trips into the well,
driving costs toward 40% to 50% of a shale wells total
cost.
As a result, service companies have introduced various
completion technologies to expedite the process. Openhole completion systems have been around for a decade
but have gained increased traction recently. These systems use hydraulically set mechanical packers on the outside of the production casing to isolate sections of the
well bore. Instead of using a perforating gun to provide
access to the reservoir, sliding sleeves cover frac ports and
are opened by dropping an actuation ball into the well,
which lands in a cradle and isolates each stage. Progressively larger balls are dropped to complete stages from
the far toe to the near heel of the lateral section. After
pumping is complete, the balls are simply pumped out to
reopen the well bore.
The major advantage to this method is speed, as the
entire fracturing treatment can occur in a single pumping
operation, reducing the time required to execute each
stage by approximately 75%. Initial drawbacks were the
limited number of stages built into the systems design as
well as reliability. However, many companies have introduced enhanced systems to address these issues.
Baker Hughes FracPoint EX-C appears to have the
edge in stage capability as this system can execute up to
40 stages by using balls that vary in size by just 116 in. Competing systems include DeltaStim from Halliburton (max
26 stages), StackFRAC HD from Packers Plus (max 20
stages), and Falcon from Schlumberger (max 20 stages).
Packers Plus has pushed the sliding-sleeve system further
with a repeater port technology built into its QuickFrac
system. Rather than activating a single stage, each ball
dropped opens two to five stages. Each interval has a limited entry setting to allow only a portion of the fracturing
fluid to enter. Thus, the number of pumping stages is only
a fraction of the number of stages actually fractured, reducing time and costs; this is offset by a reduction in frac propagation due to less energy used per stage. However, the
product can execute up to 60 stages in a single well.
In Canada, where low-flow pumping jobs into shallow
wells are common, companies have developed fracturing
through CT, also known as annular fracturing. In this
July 2012 | EPmag.com
RE A
IT I M E
D R I I II N
I (USD 1
Micro
Drilling is a real-time operation.

I need better visibility into
well dynamics to stay safe and

productive.
MOtion1 Accurate,continuous , real-time drilling fluid data improves drilling
operations.Emerson 's Micro Motion Coriolis flow and density meters are
used in a wide range of drilling fluid systems to deliver real-time data that improves the quality
of your drilling programs , lowers cost, keeps your operation running, and provides alerts to
avoid critical events. At last ,clearer insight into your drilling data drives profitable ,safe well
production-with confidence . For more information , visit www.EmersonProcess .com/ Drilling
EMERSON.
02012. Micro Motion , Inc. All rights reserved. The Emerson and Micro Motion logos are
respective trademarks and service marks of Emerson Electric Co. and Micro Motion . Inc.
E M E R S O N . C O N S I D E R IT
SOLVED`.
industry
PULSE
approach, production casing is cemented in place before

a sand-jetting tool on CT is run downhole to perforate
the casing. Next, frac fluid is pumped down the
casing/CT annulus.
The benefits of this approach are virtually limitless
stage creation, no restrictions on placement, speed, and
less horsepower (up to 50%) required due to pumping a
single perforated section instead of a cluster.
However, pumping down the CT restricts flow to 20 to 30
bbl/min, which is at the low end of the useful spectrum.
Sliding sleeves also can be used in combination with
CT. Rather than ball activation, the sleeves are opened via
CT followed by an annular frac. This approach further
reduces the time required to execute a stage since sand
jetting is avoided, although the ability to change the
placement of the fractures on the fly is eliminated.
Another approach eliminates packers for zonal isolation by using burst point collars with coiled-tubing stimulation. Burst point collars such as Tricans Burst Port
System are casing collars containing pre-milled ports
sealed by burst discs. The joints are then straddled by the
Trican Selective Stimulation Straddle Tool (C2C), which
creates a pressure zone around the collar, causing the
ports to burst at their designated pressure point. The C2C
creates the pressure zone by using movable cups with frac
fluid pumped down CT and into the zone of focus. After
stimulation, the C2C unseals the zone and moves onto
the next.
This approach is fast, with each stage taking less than
an hour, and eliminates the use of actuation balls, thereby
leaving the well bore completely open post-job. However,
flow rates are again at the low end of the spectrum.
Conventional slickwater bed load proppant transport
Slickwater with proppant transportation modifier
The disappearing ball act
Tricans FlowRider solution causes microscopic air bubbles to
Baker Hughes has turned to nanotechnology and developed In-Tallic dissolving frac balls. The balls consist of
microscopic particles of magnesium, aluminum, and
other alloys that are bound together but dissolve in brine.
The result is a light but strong material that can be
shaped into perfectly round balls, provide a seal downhole, and then completely dissolve in a few weeks. The
company also is developing a holster made of the same
material to eliminate the need for drill out post-stimulation. Schlumberger offers a competing system that uses
a dissolvable dart to activate sliding sleeves within its
nZone system.
adhere to sand, making it as transportable as ultra-lightweight
Proppants lighten up
New proppant technology includes ultra-lightweight polymer proppants with specific gravities approaching water.
The settling rate of the ultra-lightweight proppants is much
10
slower than sand and ceramics, reducing the volume

required and partially offsetting the higher per-unit cost.
An interesting alternative is Tricans FlowRider, a solution that causes microscopic air bubbles to adhere to
sand, making it as transportable as ultra-lightweight proppants. This reduces the volume required for a conventional job while enhancing well productivity due to
improved connectivity.
proppant.
A different proppant strategy is channel fracturing,

which was recently enhanced by Schlumberger and sold
under the HiWay brand. Fibers are used to coagulate the
proppants, and the clumps establish a pillar structure
with channels to facilitate flow and prevent dispersion
during pumping.
As margins for wellsite capital equipment normalize,
the primary driver of value creation within the onshore
North American oil services industry could transfer
toward technology promoting improved efficiency and
performance in addition to product integration. In fact,
technology has the potential to hasten the process of margin normalization by improving the effectiveness of the
machinery.
tl
ti tlli
ir.
ff TF1f T`It.1
-1M
Iii
-
LrA
% ,
t
0 4 --
.
L
L-Lk. Lf t
11
I1-7
II
"
f
MIN
TL
,
r
te
lii
T1
L' ' ,I
',
",
Nr
T
N
1XI
ere at the beginning Here for the future

When you think of petroleum engineeringand petroleum geology/geophysics
programs,the University of Oklahoma's Mewboume College of Earth &
Energy might be the first college that comes to mind, and it should be.
Home to the world's first school of Petroleum Geology,granting the first
degree in 1904
Home to the world's first school of Petroleum Engineering
Alma mater to more petroleum engineers and petroleum geologists than
any program in the world
OU is alma mater to eight Society of Petroleum Engineers (SPE)

past presidents,eight American Association of Petroleum Geologists
(AAPG) past presidents and five Socie of Ex loration Geo h sicis
(SEG) past presidents.
u.edu/ mcee
M
MEWBOURNE
COLLEGE OF EARTH&ENERGY
THE UNIVERSITY OF OKLAHOMA
M.Real education for the real world-
world
VIEW
Value-driven strategy
starts to deliver results
Faced with declining reserves, Mexicos national oil company gets serious about exploration.
Karim Meggaro, Editor, Mexico Oil & Gas Review
hroughout almost a decade of production decline,

Pemex has started shaking off the complacency that
developed in the years of Mexicos easy oil and is gradually
overcoming internal and external challenges that hinder
its ability to evolve into the company that it always aspired
to be: competitive, innovative, productive, sustainable, and
focused on value creation.
Mexicos 1P oil reserves only promise 10 years of production at current rates, and 3P reserves extend this to 30
years. With production dropping from 3.382 MMb/d of oil
in 2004 to 2.550 MMb/d in 2011, Pemex management is
aware of the hurdles ahead. The company must ramp up
exploration activities to add hydrocarbons to its existing
reserve base while simultaneously tapping those reserves to
reach its stated 3 MMb/d target over the next five years.
The current CEO of Pemex, Juan Jos Surez Coppel,
came to the job in September 2009. Having been in the
job for nearly three years, Surez Coppel has a refreshing
take on Pemex and the challenges it is currently facing.
He is candid about what he sees as the biggest problems at
the national oil company (NOC).
Greater efficiency
Currently, there are too many cooks in the kitchen of
Pemex for it to be run effectively as a company, he said.
Each of these cooks is following their own recipe, and
there is no accountability. Surez Coppel is alluding to
the fact that under current legislation, the government is
still responsible for approving Pemexs annual budget,
while Mexicos 2008 Energy Reform created the Comisin
Nacional de Hidrocarburos (National Hydrocarbons
Commission), Mexicos upstream regulator that Surez
Coppel said has a poorly defined mandate and as a result
is interfering too much in the running of Pemex.
What every company needs to do is choose one cook,
agree on the menu, agree on the budget for that menu,
and then see how successful it is, he said. If no one is coming to your restaurant after two weeks, then you need to
hire a new cook. At Pemex, we need to move from a proce12
Juan Jos Surez Coppel, CEO, Pemex. (Images courtesy of Pemex)
dure-based system of control and make it simple: present a

business plan and a budget and then bring in results.
One of Pemexs 2011 achievements was bringing its 1P
reserve replacement rate above 100% one year ahead of
schedule, reaching 101.1% replacement. Surez Coppel
takes this as an example of what Pemex is capable of
under the right conditions.
It was never a priority for Pemex to replace its production, he said. Finally, we achieved a reserve replacement
this year of more than 100%. People must think that we
cracked the secret of exploration in Mexico, but the simple
truth is that we finally started to invest in exploration.
With a clear mandate driven toward value creation,
Pemex will find it easy to be innovative and competitive in
the future, according to Surez Coppel.
More like Petrobras?

In recent months, Mexicos presidential candidates for the
2012 election have mentioned the Brazilian NOC Petrobras as a model for Pemex. Surez Coppel believes that
any comparison between the two companies is unfair
given their separate histories. The thing that is forgotten
about Petrobras is that since it was established in 1953, it
never faced the type of budgetary or taxation restrictions
that Pemex did. People that worked in Petrobras were not
v
N 0
O
Cn
O .
e .
O
O
G?
_
,n
Cn
cC
O
."r
bb
y
O
"
tom
CC U
cs
C)
k
a
cd
CL Ew
cs
cd
;; 3
0
5
cS
EU
C)
c
C)
U
0 Cv
m
y
b- !` 4,.,
r1
cC
O v
v CC
s, U
cs
ct
U
Cl)
cz
bA JT
en
4.4
CC
cd
nn
olJ
3
40
vo
r
lq4
world
VIEW
public servants. These factors restricted the way we could

run the company and procure equipment and services.
If we were to move Pemex to the Petrobras model, there
would be a huge payout.
deepwater collaboration projects interesting for those

companies that have the expertise Pemex needs.
One idea we have for this is compensating for exploration costs at the moment a project is declared commercial. We also are looking into scaling
bids up or down according to the size
of the discovery made, Suarez Coppel
said. Pemex may look like its intentions
are misguided, but what we are really
trying to do is make the best of the
hand that has been dealt to us by the
government.
Going abroad
Since President Caldern visited Cuba
in April this year, speculation has been
rife that a deal would soon be completed for Pemex to work on Cuban offPemex seeks partners not only to invest in existing fields such as the Sonda de
shore oil projects. One of the biggest
Campeche but also to target new exploration opportunities.
questions today is whether things would
move faster if international companies
However, now that the Brazilian government has realwere able to come to Mexico. Why not reverse this logic?
ized the tax revenues that could come from the oil and gas
There is no reason why Pemex should not be able to work
industry, things are actually starting to look more like the
in other countries to speed up the learning process instead
Mexican model year by year.
of butting our heads against the political system, Surez
Coppel said. We are currently looking at opportunities in
Getting the lay of the land
the US Gulf of Mexico, and as soon as we are ready, we are
Mexicos 2008 Energy Reform opened the door for
certain we will go there. We also are interested in looking
Pemex to award contracts based on incentives for the first
at shale gas and tight oil opportunities in the US.
time in its history. Surez Coppel explained that while
The final sentiment that Surez Coppel shared is the
international oil companies find operating environments
fact that he is not keen on the eventual privatization of
that match their technological capabilities, Pemex has to
Mexicos oil and gas industry. Our vision is that liberalizadevelop the skills required to fully exploit the resources on
tion should not be a critical decision for Mexico to make,
Mexicos geological map. The company has a number of
he said. Having a national oil company has its advantages.
different contracts available to act on its mandate.
To depend on the whims of international operators is a
The first is contracting for certain activities, such as
dangerous game, and an NOC can mitigate this risk.
drilling or well completion. We also can contract field labI do not mean to imply that national oil companies are
oratories where we bring in a partner to systematically try
the only way to run an industry, but at Pemex we would
new technologies in a given block over a two- to four-year
like to run things so efficiently that liberalizing the indusperiod, he said.
try fades as a critical decision.
The third type of contract is the integrated service contract, through which we pay our partners a percentage of
Mexico Oil & Gas Review outlines the most important and relecost recovery plus a fee per barrel. These contracts were
vant issues currently impacting the oil and gas industry in Mexdesigned for field development but with the right changes
ico. Featuring exclusive interviews with Mexicos main opinion
can equally be used for higher risk projects.
leaders and key industry stakeholders across the public and private
He went on to explain that although the new intesector, this annual publication examines in detail the events and
grated service contracts have so far only been used for
strategies that shaped the year in the industry and analyzes the
bringing companies in to boost production at mature
biggest challenges currently facing the country in terms of regulafields, he hopes that through finding a way to share some
tion, technology, and energy policy. For more information, visit
exploration risk, the contracts also will be used to make
mexicooilandgasreview.com.
14
FREECAP SWELLABLE PACKER
20 000
99
packers sold
s u c ce s s rat E
575 F (302 C)
swellable
maximum
temperature
(FREECAP GT)
standard polymer blends
top challenges: cement integrity, multistage fracturing,

4 zonal isolation , SA GD app lications
proven solution
Think all swellable packers are alike? Numbers tell a different story. TAM FREECAP' swellable
packers have quantifiable advantages. Like maximum temperatures up to 575 F (302 CI. More
than 20,000 packers sold and a 99.9% success rate .

We start by evaluating your well environment. Then we use that understanding to create solutions
that incorporate one-of-a-kind polymer blends. So you get an appropriate swellable packer for
each unique application , every time .

For ensuring cement integrity and optimizing multi-stage comp letions , FREECAP swellable
packers are chosen by operators who know that packer performance matters. Add our exceptional
.
l
uslurner
ser
vice d ied del iver ie s lhdl
L ai]
hel p yo u pleii your wells our d liy hl timeline , dud the
advantages really add up. Isn ' t it time you made FREECAP' swellable packers your No. 1 choice?
P-Ma
TAM INTERNATIONAL
Inflatable and Swellable Packers
www.tami ntl.com/performancematters
PERFORMANCE
MATTERS.
management
REPORT
ESP startup takes new approach

to US artificial lift market
A new service provider chose a more engineered and operational strategy to set the
foundation for its future growth.
Jason Bose, Summit ESP
he genesis of Summit ESP can be traced to the major

players electing to focus on the integrated services
model while redirecting resources to the Eastern Hemisphere. The principal architect of the year-old Tulsabased service provider says those decisions essentially put
out a welcome mat for his company to enter into one of
the fastest growing segments of the multibillion-dollar
North American artificial lift market.
In 2010, veteran industry executive John Kenner
believed the time was ripe for a flexible and engineeringfocused independent company that would concentrate
entirely on providing operators advanced electrical submersible pump (ESP) technologies in the liquids-rich US
onshore plays. Accordingly, the former president of Baker
Hughes Centrilift spearheaded an initiative to fill the gap
in a North American ESP market that industry analysts
estimate is more than US $1 billion and growing exponen-
tially. It also has been estimated that upwards of 90% of all

wells ultimately will require some sort of artificial lift.
In laying the foundation, Kenner said he envisioned an
ESP company that would design and deliver new-generation technology and emphasize service and customer
responsiveness while also being easy to work with both
commercially and technically.
With Kenner as president and CEO, Summit ESP was
established in April 2011 to initially provide comprehensive ESP systems and associated services in three key
onshore markets. Owing to its proximity to mature and
emerging fields in the Midcontinent, Tulsa was chosen as
the primary engineering and manufacturing hub. In May,
Summit opened its first full-service operational center in
Midland/Odessa to serve operators in the Permian basin.
In the third quarter, the company intends to open a similar facility on property it owns in Powell, Wyo., to target
production-boosting opportunities in the Rockies and
Bakken shale. Each facility is being designed with capacity
sufficient to generate $50 million in annual revenue.
Today, employee-owned Summit has a workforce
approaching 50 specialists with an average of 20 years
experience in designing, installing, and servicing ESP systems. Complementing its all-inclusive suite of project-specific ESP solutions for flow rates from 150 b/d to 30,000
b/d, the company also provides application engineering
and equipment design as well as reliability engineering
and equipment service.
The financial hurdle
Summit ESP service technicians use the most current technology

to conduct real-time well monitoring; ensure timely data transmission to operators regarding critical information; and easily
interact with various personnel on location, in the office, or over
the web. (Photos courtesy of Summit ESP)
16
Before reaching that point, Kenner had to secure funding

for a capital-intensive venture at a time when the economy
was in tatters. Moreover, the startup had adopted a stepwise development strategy that called for the supply and
service infrastructure of targeted locations be built from
the ground up, meaning an investor, likewise, would have
to be a patient sort. In order to ensure we were extremely
responsive to the market, we made a commitment to sacrifice early returns to build high-performing products, quality facilities, put in all new tooling, and have our inventory
and people in place on day one, he said.
Ironically, the dismal condition of the stock market
placed venture capital on the sidelines and made it availJuly 2012 | EPmag.com
able for high-quality, well-led enterprises. In 2010, the

market was in the tank, but we also had $100 oil, Kenner said. In 2010, people with funds were not putting
money in the market, which left well-funded private
equity looking at deals.
In seeking funding, Kenner said he sought a financial
partner motivated by Summits high potential without
necessarily requiring it be well-versed on the intricacies
of the ESP market. He acquired funding from a venture
capital concern that, while uneducated in the particulars of ESP, was extremely knowledgeable in the industry
as a whole and recognized the potential.
When I pitched this, I pointed out there was a trend
in the industry where the integrated service companies
had largely taken their eyes off North America. Beyond
that, further integration was occurring, and more companies were taking a geomarket approach. This continual integration of services had basically demoted ESP
and production services within heavy drilling and pressure pumping-oriented organizations, he said.
Landing the talent

Once funding was in hand, Kenner began assembling an
engineering and technical support staff. With the longestablished behemoths scouring the industry for qualified
personnel, the challenge of attracting highly specialized
and experienced employees to a start-up company was formidable. Since operators can ill-afford to keep production
offline because of malfunctioning artificial lift equipment,
the new company required specialists with 20 to 40 years of
ESP experience, making the search even more daunting.
Early on, Kenner said, Summit tended to attract highly
experienced artificial lift and ESP experts who had
become demotivated by the increased focus on integrated services or other noncore goals. According to the
executive, the company successfully attracted a highcaliber team by fostering an environment that encouraged open debate and ingenuity. The people we attract
have worked with artificial lift and ESP systems their entire
careers and welcome the opportunity to put their creative
juices to work and add their own ingredients to a new
organization, he said.
Engineered, multimarket approach

Unlike most newcomers to the artificial lift market, Summit focused on multiple US onshore markets while also
implanting its own technical stamp rather than simply
acquiring and running pre-manufactured ESP systems.
Kenner said early on it was decided a single-market
focus would dramatically restrict the capacity of the company to attract top engineering and technical talent.
EPmag.com | July 2012
The companys manufacturing

facility in Midland/
Odessa, Texas, services
operators in the Permian basin.
Hence, the company chose to initially establish strategic

operations in three key areas, which would effectively
widen the available talent pool and set the foundation
for future growth.
In contrast to the mainstream approach of new entrants
to the artificial lift market, the company chose a more
engineered and operational strategy that centered on buying components to its specifications, which in turn are further modified and assembled according to its proprietary
methods. To ensure reliability and quality, Kenner said
many components of the basic three-phase induction
motors, multistage centrifugal pumps, and other surface
and downhole equipment undergo what he terms, American modifications.
Starting off, we acquired some initial technology,
upgraded it, and are now working on second-generation
clean-sheet designs, he explained. Our approach was to
put the infrastructure in place and immediately open
using technology we could upgrade over time. Then, in
another year, launch with all of our technology, of which
we already have applied for four patents with a fifth in
development.
Growth on track
Initial customer response following the opening of the
Midland facility suggests the company is on pace to
achieve its North American goals. While assuming its core
customer base initially would comprise the smaller independent operators, Kenner said Summit executives were
pleasantly surprised with myriad opportunities presented
by super majors, including potential major industry R&D
programs.
Following the opening of the Wyoming facility later
this year, further expansion plans include the establishment of a physical presence in Alberta, Western Canada,
and South America.
17
digital
OIL FIELD
Realizing the returns of an integrated

control and monitoring architecture
Advanced computing platforms enable service companies to run frac jobs at
optimal efficiency.
Chris LeBlanc, Roberto Piacentini,
and Theresa Woodiel, National Instruments
he oil and gas industry depends heavily on advanced

technology as evidenced in better geologic devices;
computer-aided modeling; and major advances in
drilling, particularly horizontal drilling. These advances
in technology have made it possible to enhance recovery
or even produce hydrocarbons from oil and gas wells
not previously viable.
One trend today is the convergence of computing
power requirements for hydraulic fracturing operations.
Similar to business professionals who require a suite of
software applications to perform daily activities, oil and
gas operators must manage a host of challenges in their
pressure pumping operations. These challenges include
ensuring worker safety, redundant operations to maximize uptime, integration that extends beyond engineering, application standardization while controlling costs,
data acquisition processing for doing advanced computations, and the tight coordination of a complex network of equipment.
Another perennial issue operators deal with is worker
safety. While nearly half of all fatal injuries are attributed
to motor vehicle accidents, many other injuries are attributed to workers being struck by tools and moving machinery. Additionally, an increase in the rate of injury or fatalities
increases for inexperienced workers, typically operators
with less than one year of service in the field.
Within upstream oil and gas, traditional process control and automation systems have many constraints that
require operators to interface at control devices, placing
them near high-pressure equipment systems. Because
traditional process control offers fixed functionality and,
in some cases, requires a ratio of one operator per
hydraulic fracturing pump unit, this can translate to a
high number of operators based on the number of
pumpers on a frac site. At a distance of only a few feet
from the pumpers, noise can be loud and pose additional challenges for communications. In some cases,
frac site communications can mean operators communicate via two-way radio to ensure the right coordination
18
A host of challenges in oil and gas pressure pumping operations has led to a convergence of computing power requirements at hydraulic fracturing well sites. (Images courtesy of
Lime Instruments)
of equipment. Ensuring reliability of information so that

what is being communicated is understood and acted
upon correctly is crucial.
Reducing risk
At a well location, the wellsite leader is the most visible
safety leader, so proactive planning by management
helps workers understand the risks and establish priorities for ensuring safety. One approach to minimizing
risks is to prevent operators from coming into contact
with moving machinery, high-pressure areas, and tools.
Through an advanced control and monitoring platform,
personnel are removed from the danger zones. The
National Instruments (NI) LabVIEW and CompactRIO
platform provides high-performance embedded processing coupled with rugged hardware capable of withstanding the harsh, remote environments of a well site. The
benefit to service companies is having the user interface
and embedded logic in one platform, which is traditionally not an option. Because embedded logic such as
field-programmable gate array (FPGA) code can be
stored on the control device, operators are able to monitor frac pump operations from the safety of the data van.
Essentially, the FPGA-based control platform provides
flexible hardware through software-defined, reprogrammable circuitry. FPGAs have been used for more than 30
years as digital glue logic between different components
digital
OIL FIELD
on the same printed circuit board (PCB). The reconfigurable logic within the FPGA fabric has been ideal for
implementing complex state machines and applicationspecific digital circuitry that operate independently
from processor clock cycles, with higher reliability and
determinism. Over the years, the performance of FPGAs
has increased dramatically, with significant reductions in
power and cost. For this reason, the use of FPGAs in
embedded measurement and control designs has
expanded from simple glue logic to handling signal processing tasks such as custom digital filters, fast Fourier
transforms, and logic for proportional integral derivative control. A primary benefit of FPGAs for processing
is that several algorithms can now run in parallel, unlike
the sequential architecture of a processor.
Through a FPGA-based control platform, oilfield service companies can provide a step-function of safety for
applications in the oil patch, thus putting their safety
programs in the best position for reducing risks. Using
proven digital computing technology, advanced control
systems serve as autonomous control devices for wellsite
jobs that historically pose safety-related risks. In addition, an integrated control and monitoring platform is
able to address a host of applications, including pump
frac control.
Pump monitoring and frac pump control

Located in Houston, Lime Instruments is a global
provider of turnkey redundant control and instrumentation systems for the oil and gas well services industry. In
addition to pressure pumping, Lime also provides control and monitoring systems for coiled tubing and both
conventional diesel horsepower and turbine-driven systems. In order to be successful in pressure pumping with
an integrated control system, service companies need
pump, blender density, hydration, chemical, and data
acquisition system control.
Through a common platform of NI LabVIEW and CompactRIO architecture, Lime is able to design systems that
enable service companies to address frac systems individually as well as in a coordinated system. Limes advanced oil
well monitoring system is designed to monitor the performance of vital pump components during operation.
Using the NI platform, each frac pump system is mounted
on a tractor rig with a high-horsepower diesel engine and
mated to a triplex or quintuplex pump. Both the engine
and the transmission come equipped with an electronic
interface that monitors critical functions and provides
diagnostic information as the unit is running. The engine
and transmission output the monitoring data via an SAE
J1939 communication protocol.
To ensure operation, these systems offer redundant

operator controls for reliability, Ethernet cables for
wired control, wireless controls with dynamic IP addressing, and high-performance control and monitoring
built on embedded real-time FPGA technology. The system is constructed with NEMA 4X and Zone approved
packages and can withstand operating temperature
ranges from -40C to 70C (-40F to 158F).
Integration that extends beyond engineering

The use of an advanced computing platform has the
ability to change the way oilfield service companies
address their engineering and operational practices on a
well site. The system essentially acts as a data aggregator
of all information and activities related to a particular
location. This data can extend across a service company
to benefit various functions, departments, and roles
beyond those contained at the well site. Maintenance
can use data to understand which transmissions or
pumps need repair or service. Staff accountants can use
the data to understand how much materials have been
used as well as how much revenue they can expect from
the job. Purchasing departments can manage resources
such as sand and water to understand when to order
and stay on top of the job. The data generated by this
advanced platform enable service companies to run
their operations at optimal efficiency.
Acknowledgement
The authors gratefully acknowledge the contributions and work
of Rob Stewart, president and CEO of Lime Instruments. Please
visit limeinst.net for more information.
Using the NI LabVIEW and CompactRIO architecture, each frac

pump system is mounted on a tractor rig with a high-horsepower
diesel engine and mated to a triplex or quintuplex pump.
19
digital
OIL FIELD
Big data elevates the game

New plays and more data multiply data management headaches. Integrated management
systems provide some pain relief.
Rhonda Duey, Executive Editor
ata management issues have probably plagued the

oil and gas industry since the first wells were dug or
pounded out with cable-drop tools. More recently, even
with the massive improvements in compute power over
the last few years, the computer industry has struggled
to keep pace with the energy industry.
Now things are ramping up even faster. New play types
bring new challenges, and once again Silicon Valley is
huffing and puffing to keep up. But companies like
Oracle, keenly aware of the obstacles that face them,
are suiting up accordingly.
Really big data

Charles Karren, director, oil and gas industry strategy
for Oracle, said that the big data concept is nothing
Data volume, velocity, variety, and value will force the energy
industry to adopt a new paradigm for data management.
20
new for the industry. This is the most data-intensive

industry one can imagine, he said. You can only get to
the oil by data.
Karrens father worked in the industry from 1951 to
1999, and he said the changes in that almost 50-year
career are dwarfed by the changes in the past decade.
One of the major changes, he said, is the advent of
unconventional plays, including not only shale but deep
water and oil sands as well.
Our view at Oracle is that with these new opportunities, you have to think about information technology differently, he said. Companies need to deploy a new
generation of software tools to help manage the complexity and to capitalize on these plays.
Another major change is the big data component.
Karren said big data is characterized by the four Vs:
volume, velocity, variety, and value.
Volume is obvious, he said. Chevron disclosed that
it manages more data than Google and is growing it at 2
terabytes per day.
Velocity is the increasing speed at which data are collected. With real-time downhole sensors and other
improved equipment, operators are taking measurements in quarter-second intervals.
Variety has always been a characteristic of oilfield data,
but the digital age has ushered in additional variety in
the form of accounting data, supply chain data, even
emails.
Finally, the data have to have value. You can take all
of this: the volume of the data, the speed of the data,
and the different types of data, but it doesnt mean
much in terms of value, which is getting the right data
to the right people at the right time, Karren said.
Naturally data will be stored to have on hand when
government officials require an audit trail. But more
importantly, the data have to be available to people
within the company for them to make timely decisions.
The big challenge for the oil and gas industry is reducing the lag time between the data capture and the data
analysis and then implementing and executing on the
decisions once youre able to analyze that data, he said.
Really, its the ability for an oil and gas operator to
become a predictive organization, to be proactive.
Frac water storage?

We 've got you covered.
,III
9-1
Every type,every size, every situation.

There are many different challenges that you
may face in frac water storage ,but one thing is
always constant - Dragon has the right solution.
With the addition of Water Corral,our fast-deploy
soft storage offering,we now carry the full
range of water storage systems.Every Dragon
product is severe-duty engineered to perform in
harsh production environments.Plus, with 12
manufacturing facilities near the major U.S. shale
plays,we have the units you need available now.
Dragon knows frac water storage and handling like
no other company.Our engineers design solutions
specific to each job site, including custom packages
if needed,and we offer onsite service as well.
Want to be covered no matter what you need?
Make it happen.
www.dragonproductsltd.com - 1-800-231-8198
0 Copyright 2012 Modern Group Inc. All rights reserved.
DRAGON
Make it happen
We're Changing
Mindsets
Weatherford's Tactical Technology and flexibility can change
the way you think about your service needs.
TM
h
Ar
minime
operating ezpenditue
interverltim to
_n
mrtalnrem to nn,
..
Ie
pi
elandw l b
lutes
define atd aeldtnl
Inventive new approaches to reduce your costs and increase well

productivity. Flexibility and open-mindedness. Get-it-done mentality.
That 's what you 're looking for and that's Weatherford . And that's why we
have a rapidly expanding worldwide presence.
4
Oril
0
Evzl i t a i
Our Tactical Technology and services span the life cycle of a well:
Drilling services make well construction safer , reduce nonproductive time
and enhance reservoir deliverability. Evaluation services combine more
conveyance options with industry-qualified measurements. Completion
services offer systems engineered for all environments from conventional
to the most challenging. Production services maximize reservoir recovery
with artificial lift , well optimization, and remote monitoring and control
technologies. Intervention services remediate problems to extend well
production life.
Discover for yourself how our Tactical Technology and service flexibility
can change your mindset.
The change will do you good1W

Prnrilir tics
Weatherford`
Intervention
weatherford.com
digital
1
W
OIL FIELD
Weatherford"
Changing Mindsets with
Tactical Technology`"
Help from the computer industry

To react to this need for proactivity, Oracle has acquired several companies in recent years to beef up its business computing offerings. Karren and
his industry colleagues mange the marketing in six oil producing regions
Calgary, Rio de Janeiro, London, Abu Dhabi, Beijing, and Perth. Together,
this group has put together a stack of solutions and made it applicable to the
oil and gas industry.
Weve created a solution called High-Performance Data Management,
he said. This is to boost the execution capability of the asset teams and the
operators by closing the gap of being able to integrate this vast amount of
data and then be able to execute on it.
When we go to our customers, we listen to what they have to say, but our
aim is to have them achieve their goals and be a predictive organization.
Oracle is not in the business of competing with existing software platforms
that enable reservoir modeling and drilling engineering, he said. What is
out there has worked and is working because you cannot produce this
amount of oil and scale up without something already in place, he said.
The question is, as these new plays develop and as the amount of data
increases, well need to look at different ways of going about the business.
Toward this end, Oracle advocates open standards and is a member of
Energistics, PPDM, and PIDEX. Its Complex Event Processing software takes
data from WITSML and PRODML and directs it to the correct person at the
right time with the right recommendations.
What makes it different is that youre able to not only have that information stored, but based on data mining attributes, youre able to find something that the asset team may not have been aware of, he said. As you move
from these different plays, you have teams that are cross-fertilizing. The people may move around, but the information remains static. This is designed
to say, We have these issues in this formation in the Eagle Ford, and these
were the solutions we devised.
This takes the concept of leveraging best practices from whats in peoples
heads to what exists in the database, he added. If the information is in a
data warehouse, theyre able to mine that data and analyze some of these
issues as they come up, he said.
An additional tool provides Exalytics, the ability to analyze key performance indicators, capital and operational expenditures, etc., and to share this
information across the organization.
This is not to replace software that is already out there, Karren said. Its
to elevate the game, to handle the new plays and the explosion of volume. I
think the oil industry really is going to have to have a new paradigm. This
has always been done at the corporate level, but now the data needs to be
brought to the different groups within the organization.
and a get-it-done mentality.

Weatherford Tactical Technology
cuts costs and delivers results to
help you reach strategic goals.
Advancements in drilling include
our Revolution,.rotary-steerable
system that makes extreme
conditions routine. And, you can
speed up operations using our
drilling-with-casing (DwC ") system
to simultaneously drill and case
your well.
Exclusive evaluation technology

eu
includes Compact " logging tools

and Assure "' conveyance options
to ensure quality data in deviated

and rugose wellbores.
Completion innovations include
expandable sand screens and

tubulars , intelligent well systems
and more-all to increase well
productivity and reduce costs.
Production capabilities feature

industry-leading artificial-lift and
well optimization products and
services , including the LOWISlife-of-well information system.
Intervention technologies include

Wib
our OneTrip StarBurst "' Level 4
multilateral that saves two days

of rig time and risk exposure.
To discover how Weatherford
Tactical Technology and

service flexibility can change the
Real-time management
way you think about your service
People want the information they need and they want it now, Karren said.
Thats one of the reasons that Oracle is now a hardware and a software
company. We want everything in one box. It makes it easier for operators
because it lowers their total cost of ownership.
The company plans to spend US $4 billion to $5 billion a year on R&D, he
said, to make that integrated stack accessible to the end-user.
needs, visit weatherford.com.
The change will do you good'

weatherford.com
Q, LL,2Po th i d A 1 naf!a rca_rrt1
W ia4s
Gopriim p and
CSICOIOJ
Vwamcrh 0 t!dtroggl
//\I'.
w
CN
L
...M
oir
//MR\\
(Gwoc
rr
Ly
AA-"AIR,ffi)a) qymu
air
: " ,i
.'
.
i
f
qq
O
r
iI
V ':
:
12
f f. A
s
i
sY
t1i
'
f it
lanul: clurc
Oil anti (:as 1: A I'

h` I
;
!
61I
' rel ole '1'eclt nolo-,
ell Inter entiun
Hel l Urillii.
E&P and FOR Related Services

Logging and
Drilling and Completion
Wireline
Directional Drilling
Mud Logging
Ccinenting
Well Testing
Goring
F.&P Program Research and Design
Drilling Fluid
Ileavv Oil I{e,rr oir Development
W ell lnlrnenlitn!
sti nns lat i ,011
Perforation
P r o v id i n g I n te gr a t e d Solutions from Geolog ical Research

Development P r o g r a m a n d Well Desi gn to Well C o m p l e t i o n
W e b s i t e : wf ww . g w dc . c o m .cn
E- m a i l : n a r k e t i n g l. g w d e (a enpc . c o nl .cn
Tel: 8 6 - 1 0 - 5 9 2 8 5 6 9 1
exploration
TECHNOLOGY
Simultaneous sources move offshore

Long restricted to land acquisition, simultaneous source methodology
has now been proven in a marine environment.
n land seismic acquisition, simultaneous sources have

RHONDA DUEY
revolutionized the way surveys are acquired, providing
Executive Editor
much greater sampling and consequently better imaging.
Why hasnt this been done in the marine environment?
rduey@hartenergy.com
Well, it hasnt been for lack of trying. WesternGeco
researchers have been studying the implementation of
marine simultaneous source acquisition since before
EPmag.com
WesternGeco became a company. But they had to overcome some fairly significant hurdles.
At first it was commodity prices. We invented this
the concept and to see if it was feasible. Those tests gave
just before the big downturn came in 98 and 99, said
the company confidence to try the acquisition methodCraig Beasley, chief geophysicist for WesternGeco and a
ology in a commercial setting.
Schlumberger fellow. That lasted until about 2004 in
It wasnt as simple as throwing another source boat
the seismic industry, so it came at a bad time in terms of
into the water. In fact, the survey was done on a single
interest for new technology.
vessel usually configured with flip-flop sources. Its not
Along with the downturn, the cost of the acquisition
what we would have predicted would be our first comwas a tough hurdle to jump. At the time,
mercial job, Beasley said. But its pleasing to see
marine simultaneous source acquisition
the technology demonstrated in that chalwas envisioned as a multivessel operalenging environment because it opens
Why
tion which required adding another
the door for simultaneous sources in
hasnt this
shooting boat and incurring
virtually any marine acquisition.
that cost. Fortunately, with the
Another challenge was developbeen done
advent of wide-azimuth (WAZ)
ing
a separation algorithm that
in the marine
surveys, multivessel operations
would capture the signal with as
environment?
became more common. As
little residual imprint as possible.
more companies saw the benefits
To test this, WesternGeco simuof WAZ, the simultaneous source
lated simultaneous-source data
concept began to gain momentum.
from real data.
The result is the first commercial
We had real noise and real data
job using simultaneous sources in a
problems, but we knew the real answer,
marine survey. Conducted by WesternGeco
Beasley said.
for Apache and its partners offshore Australia, Beasley
The announcement might seem overshadowed by
characterizes the technique as a complete revolution in
WesternGecos other big announcement, the introducacquisition technology.
tion of IsoMetrix marine isometric seismic technology.
With every additional source you put out, you
The new marine acquisition system outputs isometriincrease the productivity of the seismic crew in a linear
cally sampled point-receiver data in both the crossline
fashion, he said. If you shoot two sources, you collect
and inline directions. But Monk said the two technolotwice as much data.
gies are complementary.
Dave Monk, global director of geophysics and distinI hold out a lot of hope for what theyve done,
guished advisor for Apache, said his company first
he said. There is absolutely no reason
started considering marine simultaneous sources in
why you shouldnt use IsoMetrix
2010 while doing tests at the Forties field in the North
technology with a simultaneous
Sea. Monk said Apache acquired a test to understand
source.
25
yll
' l
, f,
Mv
...yam,'
,-
4
4
^ ,. '/ ` f` :`- %
=
+ :t '
'
AI
N Y ..
. J
P
+
"
'
...
r.
.,
am
y
`
:
J
Gt s < :
lR
_
1+r.
af
.
`
:r
a.LY
y
''.
-
CLEANER. FASTER. SMARTER.

Successful in over 800 North American wells , the Evolution El , high-performance , water-based fluids
system is so clean , fast , and s m a r t , you 'll be done with your well and on to the next in no time.
Faster penetration rates, greater cost savings and compliance with environmental standards all enhance
the value we deliver to our customers. Helping you evolve in unexpected ways is what we do best.
Learn more at www.newparkdf .com/evolution.
EVOLuTION
THE HIGH-PERFORMANCE ,
WATER-BASED FLUIDS SYSTEM
. NEWPARK
DRILLING FLUIDS
-` y 4
'
.
well
CONSTRUCTION
What goes around comes around

Finding new hydrocarbons in old fields is not a thing of the past.
t place to
bes
fin
do
Th
he most unconventional concept in oil and gas

today may actually be quite conventional.
RICHARD MASON
In an era where service companies tout the latest
Chief Technical Director,
must-have technology and publicly held oil and gas
Upstream
firms promote headline-grabbing shale plays to hunrmason@hartenergy.com
gry investors on Wall Street, it surprises many that the
best opportunities for new liquids reside in legacy
EPmag.com
conventional fields.
No doubt youve heard this before: The best place
to find oil is where oil has already been found.
hanging fruit until larger targets in deeper waters or
But a lesson in that exercise is unfolding on the
overseas enticed them away and they sold out in the
Gulf shelf and in the state and inland waters along the
1990s. A second wave of transactions on the shelf and
Louisiana coast where both public and private compain coastal waters occurred over the last half-decade.
nies are picking up legacy properties; using reprocessed
Today, companies like Energy Partners Ltd., Energy
or advanced 3-D seismic to identify bypassed oil; and
XXI, SandRidge Energy, Swift Energy, and Saratoga
employing sidetracks from existing well bores, recomResources find that these older fields respond favorpletions, through-tubing plug backs, or just drilling new
ably to leading-edge technology as they apply
wells to tap production and book reserves previously
reprocessed 3-D seismic and new completion techoverlooked or hidden behind-pipe in multiple stacked
niques to reverse production declines.
reservoirs.
Saratoga Resources, for example, acquired a suite
Much of this bypassed pay is originating from fields
of properties that included the 70-year-old Grand
that were old enough to have qualified for Social SecuBay field discovered by Chevron predecessor Gulf Oil.
rity long ago.
That field had produced 258 MMboe. Saratoga resamThe concept is not new. After gas prices collapsed in
pled the first second of the seismic data, painstakingly
Canada in 2006, several junior oil and gas companies
relogged existing wells, and carefully mapped the
began adapting technology developed in
vagaries of 64 separate reservoirs in the
unconventional gas and applying it to
stacked vertical play.
conventional oil targets. That brought
Within a couple of years, producabout a renaissance in the Canation grew from 2,300 Boe/d to
dian industry at a time when
4,000 Boe/d and appears on
things looked quite bleak. Now
the way to exceed 5,000
that business model is finding
Boe/d by year-end.
a home in the Lower 48.
Granted, this isnt PrudAs a result, new opportunihoe Bay. For example,
ties are unfolding in old
Energy Partners Ltd. and
fields: Greater Bay MarcSaratoga are less than 13,000
hand, Grand Bay, Lake
Boe/d combined in just a couWashington, Main Pass,
ple of coastal water fields. Then
Breton Sound, and West Cote
again, payouts can come as
il
Blanche Bay, to name a few.
soon
as six months on projects
f
ha
n
Some of those fields were disthat
earn
premium Louisiana
e
s already be
covered by the majors from the late
Light Sweet crude pricing, proving
1930s through the 1950s. The majors colthe adage that what goes around also
lected hundreds of millions of barrels in lowcomes around.
ou
nd
.
il
ere
is wh
27
N . _ ? D.?iH
l
no
N_ c
"?y
r
I
F1 RC -CHEM
1
Stimulation Chemicals
Coil Tubing Chemicals
Guar Powder and Slurry
Frac Fluid Design & Optimization
Full Service Laboratory Support
Fra c Fluid Schools

"Green" Chemistry
yr J..,. i rfs? 6uAA
T17
r
.f}
Ir i ?
a
'
?+ r'I N r
j
TT C
w
r
?
?
?
r
j '--'- ."
"
r
' R
'
3 ?i k
1
J
yt!
t?'
F} r
Q?
D
P!
?
r
k
, ic
"r '
" /. l , Y
`f ? r
37. ??'[i'
? M`Mr
t
.'?fr
A`
. ? ' F
??
'?
?? ,Mr.
,
?
' !
r
`
#v
',
f6
,
.
+.
k'
:C,
?'
;fir
r.
?:rY
?
?x
"mr
,. r
.ee
^ni
1ti
-
' 4
I
? ?'t ,?.
, ,
+'
?? r?
.
04t?
so-
__
.r7.
?4
Q k y t
jR
Jr
?2
.t r
?X
- -
cHEM
j=
^r,
r,
a # 101
rn n i
-
www.fracchem.com
production
OPTIMIZATION
Light well intervention systems

perk up maintenance market
With older fields in areas like the North Sea requiring more field
maintenance, purpose-built light well intervention vessels are
designed to provide an alternative to using drilling rigs for workovers.
he North Sea has a lot of subsea wells on fields that

require maintenance and workover to maintain
flows. Staoil has about 500 operated subsea wells on
the Norwegian Continental Shelf (NCS) alone.
The company has been pursuing riserless well intervention in its subsea wells since 2000. The companys
newest light well intervention (LWI) system is a purpose-built vessel that has been chartered by Statoil for
eight years from Eide Well Intervention AS.
The Category A LWI vessel can perform logging,
perforation, workovers, and well plugging. During
intervention, the equipment downhole is remotely
operated via wireline from the surface.
The new light well intervention vessel will be the first of this
design, according to Eide Well Intervention. (Image courtesy
of Eide Marine Services)
The new vessel is a hybrid design that sails like a

vessel yet operates like a semisubmersible rig. The
design improves seaworthiness, allowing more uptime
compared to monohull LWI vessels.
The unit is 122-m (402.6-ft) long by 45-m (148-ft)
wide with accommodations for 120 people. The vessel
has 3,400 sq m (37,026 sq ft) of deck space.
Eide stated this will be the first purpose-built vessel
of this design. The motion characteristics of the vessel
allow mobilization and demobilization of crew and
equipment even in rough weather conditions.
Companies providing services for the vessel include
Halliburton, wireline and downhole services; Oceaneering, ROVs; Advantec, well control system; and
SCOTT WEEDEN
Senior Editor,
Production Technology
sweeden@hartenergy.com
EPmag.com
Subsea Technologies, stack solution.
Statoil estimates it will be able to reduce well intervention costs by 60% with these vessels, which is
important with mature fields.
Performing these types of conventional jobs on
subsea wells with low volumes of oil in place is expensive, explained Oystein Arvid Haland, Statoils head
of drilling and well servicing. The LWI vessels ensure
both cost-efficient and safe operations.
Having more and new vessels of this category also
helps increase recovery from fields onstream by opening new zones in the well and stopping water production downhole, he said.
Jon Arnt Jacobsen, Statoils chief procurement officer, added, We have great ambitions and a long-term
perspective on the NCS. Using purpose-built rigs and
vessels in our operations is an important part of Statoils rig strategy.
The high number of subsea wells will require maintenance, and we are securing capacity in order to
meet this need, he explained.
Another LWI system being introduced in the North
Sea is from the Expro Group. The AX-S system uses a
vessel of convenience for well maintenance.
The company recently completed its final commissioning test on a subsea well in a fjord in Norway. All
the subsea packages were fully deployed twice in a
complete stack-up. Thirty-four tool runs were performed including calipers, production
logging, casing collar logging, gamma
ray, deep-set plug, crown plugs, and
wireline tractor.
29
The best Supply Chain provider gives

you more links to global solutions.
Introducing NOV Wilson:
More high quality products at more global locations

than any other supply chain provider for the oil and
gas upstream , midstream and downstream markets.
National Oilwell Varco announces the joining
of two world class supply chain providers for
the oil, gas and industrial businesses: NOV'
and Wilson Distribution. The newly formed
NOV Wilson will combine the strengths of
both organizations to provide superior
customer service while also offering :
- Broader Product Scope
1 F F- 1 I 1-JFM4
11
1
7
- World Class Quality Management System

- Greater Geographical Breadth
Ei
1' . 7
7
iY
-_
Q-2
I,i 61I
E1
isb"
? 1
0
%poOK
A&
www.nov.com
www.iwi lson.com
U
l
on
`- Le
ff
offshore
ADVANCES
It aint over yet

The rig-building boom has seen a flood of new units arrive on the market.
But the evidence is that this is the very minimum required to meet the
worlds unending thirst for fuel.
lthough this boom is big, it is not the biggest there

has ever been. However, according to Tom Kellock of IHS-Petrodata, the current one is not over yet.
Listening to Kellock at the IADCs World Drilling
conference in Barcelona, Spain, it was clear that
although this boom is not the biggest in terms of the
number of units built and being built, it is certainly the
biggest in terms of dollar value. Its a lot more than in
the 70s boom, Kellock told delegates.
He continued, We are adding to the fleet, with the
new rigs fulfilling the additional demand. But even with
no more orders we have only seen around half of the
deliveries so far. I believe there are more orders to
come, both for floaters and jackups it aint over yet!
He also went on to highlight that for both jackups
and floaters (semisubmersibles and drillships), deliveries are being achieved on time, especially as the yards
(mostly in Asia) are building almost entirely from established rig designs. For drillships, for example, one has
to go back to 2005 for the last instance of a drillship not
being finished on time.
As far as floating rigs are concerned, ultra-deep water
is definitely the dominant specification. Kellock also
highlighted the fact that despite water depths of 3,048
m (10,000 ft) or more being the bespoke capacity for
most, the fact is that the average water depth for rigs
Demand for modern floaters is expected to exceed supply for

several years despite a long queue of newbuild drillships and
semisubs like Seadrills West Pegasus, delivered last year.
(Image courtesy of Seadrill)
MARK THOMAS
Senior Editor, Offshore
mthomas@hartenergy.com
EPmag.com
working today is 1,067 m (3,500 ft). So we do not need

ultra-deepwater rigs all the time, he observed.
However, the long-term picture remains one of an
offshore industry going deeper, with deep and ultradeep water a key weapon in the battle to meet growing
oil and gas demand alongside unconventional onshore
resources.
This means that more rigs capable of drilling in these
depths must be built a recent presentation by Sevan
Drilling highlighted that development drilling requirements alone will make up half the demand for deepwater rigs. When one bears in mind that most deepwater
discoveries that have been made so far have not yet been
developed, one gets an idea of what the future demands
will be, with the stage very much set for growth.
Here are some indicators:
142 Bboe of deepwater resources have been found
and developed around the world;
Only 50% have been produced;
A total of 174 Bboe have been found but not yet
developed;
Deepwater development backlog amounts to 55% of
the volume discovered so far;
Another 591 Bboe of resources are expected to be
discovered; and
This is 90% higher than those already discovered.
What that means, based purely on resource numbers, is that less than 15% of the global deepwater
drilling effort required to find, appraise, and produce
the above resources (both past and future) has so far
taken place.
That means that this latest rigbuilding boom has a long way yet
to run
31
COVER STORY:
GLOBAL SHALE OIL REPORT
COVER STORY:
Shales
ripple
effect
goes
global
Russia and China keen to learn

With this in mind, major powers such as Russia and China
have sent their state companies on missions to buy into
and learn as much as they can about the technology of
finding and producing shale oil and gas.
Almost all the strategic partnerships and agreements
signed in the past year or so (Rosneft with ExxonMobil,
Eni, and Statoil, for example) have specifically focused
on the two technology areas that the majority of these
national oil companies need to acquire more knowledge
about shale and deep water. Others, such as CNPC,
CNOOC, and Statoil, simply bought companies with the
required expertise so that they can learn the production
methods required for tight oil.
Since 2008, China, India, and other foreign investors
have sunk nearly US $25 billion into American shale oil
and gas development, according to the Energy Information Administration (a research arm of the US Department of Energy).
The shale revolution is now on the cusp of taking
off around the world, not only in Russia and China but
also in South America (especially in Argentina), Europe,
and Australia. Most industry observers believe that in
acreage where there is both gas-prone and liquid-prone
basins, shale oil exploration will naturally follow the lead
of the shale gas exploration programs.
Shale has been making

the biggest noise heard
in the oil and gas industry
for some time, with North
Americas pioneering
role to the fore. But a global
picture is starting to emerge.
Unconventionals changing
global energy landscape
The impact of shale and other unconventionals such as
oil sands internationally was recognized earlier this year
by Saudi Aramco.
CEO Khalid al-Falih said in a speech earlier this year
that the level of unconventional oil being produced had
removed much of the debate from several years ago about
acute resource scarcity and the Saudi role. He further
highlighted the industrys new emphasis on unconventional liquids and the fact that shale gas technologies also
are being applied to shale oil.
Unconventional oil developments are dominated by
the oil sands of the US and Canada, with 2011 global
production amounting to 2.3 MMb/d.
This was a major factor in persuading Aramco not to
increase its oil production capacity significantly in the
mid-term (it was thinking about raising it to around 15
MMb/d), especially with additional rising conventional
output from countries including Brazil (from its giant
presalt reserves) and Iraq.
OPEC expects global output of unconventional oil to
rise to 3.4 MMb/d by 2015, mostly dominated by oil
sands; to 5.8 MMb/d by 2025; and to 8.4 MMb/d by
Mark Thomas, Senior Editor, Offshore
he rest of the world has been watching with interest and envy
as the US and Canada have hit the ground running with their
efforts to access huge shale reserves in a remarkably quick and efficient fashion. Despite the public debates still swirling around the
use of hydraulic fracturing, the amount of gas and unconventional
oil being recovered from major shale formations such as the Barnett, Marcellus, Haynesville, Bakken, Eagle Ford, Utica, Mississippi
Lime, and other areas is astonishing, as is the level of drilling activity
required. US oil production from shale has grown to more than
500,000 b/d since 2009 and could reach 3 MMb/d by 2020.
This tremendous push by the upstream industry to unlock its
unconventional reserves, much of it focused on gas, also has revealed
and made accessible resources of shale oil that a couple of years ago
were considered almost irretrievable thanks to advances in drilling and
production technology.
These oil resources have real economic value, especially when the price of
oil is compared to natural gas, making the latter far less profitable.
32
2035, when tight oil is forecast to play a much bigger

contributing role.
By 2035 the US and Canada still are expected to dominate unconventional oil production with 6.6 MMb/d, but
China, for example, is predicted to be possibly producing
1.1 MMb/d of its own unconventional oil by then, in addition to doubling natural gas production from its shale gas
reserves, which it only recently began exploring.
In a recent report, OPEC estimated that global reserves
of tight oil could be as high as 300 Bbbl. To put that into
perspective, that is well above current estimates of Saudi
Arabias total conventional reserves of around 265 Bbbl.
This is largely subject to an increasing number of
exploration programs either under way or planned in
countries outside North America, including Australia,
Canada, Poland, and France. The Ukraine and Russia
also are planning campaigns to establish the size of their
shale reserves.
Most companies believe that the shale success experienced in the US will be duplicated elsewhere to a greater
or lesser extent. One of the biggest limiting factors will be
the small number of companies presently with enough
shale expertise, the constant battle to have enough trained
personnel, and the limits on access to areas that will be
imposed by some countries.
Kevin Carey, general manager, global deepwater and
complex wells at Chevron, gave an insight into the equipment and personnel demands at the World Drilling Conference in Barcelona organized by the International
Association of Drilling Contractors in June. The impact of
our unconventional portfolio on drilling and completions
is such that we currently have 68 rigs in action. By 2017
that figure will be 130 rigs. We also will require a doubling
in manpower between now and then, to around 800
drilling and completions staff by 2017, he said. That is a
scenario being replicated in oil and gas companies large
and small around the world.
Chinas strategic shale gale

In the global picture the two areas that most observers
in the industry believe have the greatest potential are
China and Russia, although both are at a very early stage
in the cycle.
China has two shale pilot projects currently exploring
for oil and gas. BP and Shell are already working with the
Chinese, and several other international companies are
seeking opportunities within the countrys shale resources.
It is mostly gas that China is initially looking for. With
technically recoverable shale gas reserves estimated by the
EIA at 1,275 Tcf more than the US this is hardly surprising. After appraising 1.5 million sq km (579,153 sq miles)
33
COVER STORY:
across the Chongqing, Hubei, Inner Mongolia, Shanxi,

Shaanxi, Sichuan, and Xinjiang provinces, Chinas Ministry of Land and Resources estimates that shale formations
there contain about 31 Tcm (1,094 Tcf) of natural gas.
Tight oil recoverable reserves, meanwhile, are estimated
by Chinas own government research arms at around 300
Bbbl, with much of it believed to lie in eastern China. Several of the countrys state-owned enterprises have been
stepping up their focus on shale since 2007, with their
attention focusing on the lacustrine rift basins.
With many thousands of wells drilled over a period of
more than 50 years, the companies have excellent data to
find shales, with eight favorable shale oil exploration plays
having been identified so far in the countrys eastern
provinces. These include the Bohai Bay basin, Biyang
depression, Songliao basin, Tarim basin, Jiyang sub-basin
(Shandong), and the Yangtze platform.
Shells China program

Of the western majors already there, Shell has been most
active in the countrys newly emerging shale frontier.
Through Shells production-sharing contract (PSC) with
CNPC, the companies have undertaken programs covering the shooting of seismic and drilling exploration wells
in the 3,500-sq-km (1,351-sq-mile) Fushun-Yongchuan
block in the Sichuan basin. This partnership was strengthened last year by an agreement to work jointly on an automated well drilling and completion system. Last year, Shell
sank $400 million on the drilling of 15 shale gas wells in
China and has plans to sink up to 25 more by the end of
this year, although results have been mixed.
CNPC expects output from this block to contribute significantly to its own stated goal of achieving 1 Bcm (35.3
Bcf) of annual shale gas production by 2015.
Strategically, Shell and CNPC also have deepened their
relationship, with the companies, along with Hess Corp.,
Shells activity in China includes tight gas drilling in Changbei.
expected to sign a deal soon to jointly develop a shale oil

block in Chinas Santanghu basin in the northwestern
Xinjiang Uygur autonomous region. Low oil reserve content and immature domestic technology have so far
curbed Chinas own attempts to increase output from the
basin, where PetroChina has drilled more than 30 exploration wells with only moderate success.
Earlier this year, Shell also signed to buy Ivanhoe
Energys stakes in a PSC in the Zitong block in the
Sichuan basin. In return, Shell sold PetroChina a 20%
stake in its Montney shale acreage in Canada.
Another western player, Eni, also stepped up its efforts
last year by signing a memorandum of understanding with
PetroChina to collaborate on evaluating unconventional
oil and gas plays in China. Hess is another that has signed
a joint study agreement with Sinopec covering the evaluation of shale gas and oil potential in the Shengli oil field
in east China, while Total signed a pre-agreement with
Sinopec to explore for shale gas there.
Although China remains at a very early stage in its shale
campaign, few doubt that it will not succeed. However, the
speed at which it achieves this is open to more debate,
with the lack of infrastructure, equipment, and expertise,
as well as a lack of water for hydraulic fracturing, likely to
dampen the initial pace of development.
Siberian shale
In Russia, meanwhile, there has been growing political as
well as industry awareness of the rise of shale oil and gas.
Watching the shale revolution from Moscow, President
Vladimir Putin is well aware of Russias own huge potential
shale plays. Western Siberia already is a mature conventional producing oil and gas province, but estimates have
put one tight oil play the Bazhenov as having the
potential to hold much more in terms of reserves than
North Dakotas Bakken, for example.
The Bazhenov play itself covers 2.3 million sq km
(888,030 sq miles), which is basically the size of Texas and
the Gulf of Mexico put together. With such a large potential play to explore, many see this as one of the strategic
reasons why western players such as ExxonMobil and Statoil made their technical agreements with Rosneft, which
currently estimates reserves of 18 Bbbl on its own
Bazhenov acreage.
With Russia already producing around 10 MMb/d, the
Bazhenov has the potential to add a further 1 MMb/d to
the total by 2020 if the country can prove the play and
bring in enough rigs. The beauty of the area is, of course,
that there is already a very established pipeline network
for the whole Siberian area.
(Image courtesy of Shell)
34
1 0 0
t1o
Is
1
4
ii1
ftJ @A .
?w j
j
,
1 1
nt,
C, 0
?.
L4 '
0.A
'
'
?
llll
i fW;ro
D
?'1fk
..
?Et
In one 30-month progra m, our
If.14.Y'.a
Vision monitoring services saved

an operator in southeast Texas
USD 2.4 million by preventing ESP
failures, eliminating workovers ,

and keep ing production online.
r?
Costs eliminated by
the Baker Hughes Vision monitoring service (USD)
1,500,000
1,200,000
900,000
Welcome to the Pay Zone.

Keep producing.
600,000
300,003
Replacement costs
for 12 ESP systems
Workover
costs
) St s '
71bakerhughes.comlpzm-ips
and install downhole ESP systems designed to a ;rn
your unique operational challenges. Our comprehensive

solutions include Electrospeed Advantage" variable-speed
drives and Vision " wel l-monitoring services to monitor
and control the downhole system,extending ESP system
run life and ensuring more efficient and profitable
field management.
I
N
'
'
COVER STORY:
Tax incentives
Incentives are needed, of course, and this is where Putin
revealed his long-term plan by announcing the tax incentives for tight oil earlier this year in Western Siberia.
The president mentioned a target figure of 2 MMb/d by
2020 from Western Siberia, and to achieve this Rosneft will
have to employ the multistage fracing and infill drilling
expertise of companies such as ExxonMobil and Statoil via
their cooperative partnerships.
As part of Rosnefts deal with ExxonMobil, its independent subsidiary, RN Cardium Oil, acquired 30%
of the majors stake in the Harmattan acreage in the
Cardium formation of the Western Canada basin in
Alberta, Canada. The Cardium formation is an active
unconventional oil play in which ExxonMobil has a significant acreage position, and this is likely to be a vital
source for the development of technologies for Russias
unconventional oil reservoirs. Crucially, ExxonMobils
deal specifically states that it enables the companies to
jointly develop tight oil production technologies in
Western Siberia and that it also will enable them to
later discuss undertaking joint projects to explore
and develop prospective areas with unconventional
oil potential in Russia, according to their official
statement.
From Rosnefts perspective, the associated program of
technical and management staff exchanges agreed to by
the companies and their affiliates includes positions in
geology, geoscience, field development, well drilling,
finance, logistics, and HSE.
Statoils cooperation agreement is similar, covering both
large offshore Arctic areas in the Barents Sea and the Sea
of Okhotsk but also onshore, including conducting joint
technical studies on two Russian land assets.
The joint studies will focus on the North-Komsomolskoye heavy oil field in Western Siberia and the shale oil
play in the Stavropol area in southwestern Russia, where
Statoil can bring its unconventional experience from the
US to the benefit of this proven but unappraised play.
The Stavropol area is run by Rosnefts unit Stavropolneftegaz, which is currently exploring and developing
around 40 licensed blocks. As the majority of its conventional fields are significantly depleted, the company extensively employs enhanced recovery techniques to ensure
stable production efficiency, according to Rosneft officials.
Offshore North Sea shale potential

Elsewhere in Europe (and outside of Poland, Romania,
and Hungary, where exploration and appraisal activities
are already under way), shale oil and gas is now being
taken seriously in established mature offshore provinces
like the North Sea.
36
The Bazhenov play in Western Siberia is said to be 80 times bigger

than the Bakken play in the US. (Image courtesy of USGS)
The UK alone could have offshore reserves of shale

gas exceeding 1,000 Tcf, five times the latest estimate of
onshore shale gas of 200 Tcf. Although these are early estimates, Nigel Smith, subsurface geologist and geophysicist
at the British Geological Survey (BGS), said earlier this
year, There will be a lot more offshore shale gas and oil
resources than onshore. Offshore geological information
was already available and was superior to onshore shale
reserves data, he said.
That would obviously help overcome the controversy
and concern that is still prevalent throughout Europe over
the use of fracing. It is banned in France, for example.
Smith told the British governments House of Commons
shale gas energy and climate change committee earlier this
year that Britain could become energy self-sufficient if it
went offshore with its unconventional oil and gas industry.
The parliamentary committee responded, We recommend that [the UK Ministrys] Department of Energy
and Climate Change encourage the development of the
offshore shale gas industry in the UK, working with
HM Treasury to explore the impacts of tax breaks to
the sector.
We have potentially huge volumes present in the subsurface the volumes are mind-blowingly big, said
Melvyn Giles, global head of unconventional gas and light
tight oil at Shell, commenting to Reuters on Europes
unconventional gas resources. The figures appear to sugJuly 2012 | EPmag.com
COVER STORY:
gest the shale resources are so large that the question is

not how much is out there but how much can be retrieved
how much can be economically accessed in an environmentally acceptable way, he added.
Scientists have known for years that shale and other
common forms of rock in Europe held hydrocarbons, but
until recently they were ignored as either insignificant or
uneconomic.
Schlumberger noted in one research report that there
are large shale oil and gas reserves in the North Sea
along the German, Dutch, and Danish coasts as well as
in the Baltic basin.
An offshore future would sidestep many of the legal and
regulatory challenges that the industry would otherwise
face in Europe, but the costs of producing shale oil offshore are as yet not defined and could be prohibitively
high until technology further matures.
Australia attracts attention

On the other side of the world, Australias shale oil and
gas is proving attractive to several of the western majors.
ConocoPhillips is interested in further shale investments

in Australia after a partnership with New Standard
Energy Ltd.
The companies are exploring in the Canning basin in
Western Australia, where they have high hopes, while the
Cooper basin in central Australia also is believed to have
potential.
Also active in Australia are BG Group, Mitsubishi, and
Hess. All have agreed to fund shale exploration campaigns
through various ventures.
Many are doing this in a bid to become first movers in
an area where they expect prices (like in the US) to start
rising for shale oil and gas properties. With shale assets in
Texas selling for around $25,000, the prices in Australia
look a whole lot better. According to data compiled by
Bloomberg and DNB Markets, shale properties owned by
Australian independent Beach Energy Ltd. can be bought
for $406/acre.
Tap Oil is exploring onshore in the Carnarvon basin for
shale gas reserves, while Buru Energy is close to extracting
oil in the Kimberley basin. Tap entered into an agreement
#- u iry. Pick Three.

4g
Metallic is your sin gle source for hi g h-quality pre-eng in eered metal
buildings. From Houston , Texas - the worl d's Energy Cap ital - Metallic
commands a network that manufactures and installs throug hout North
America. What 's more , your building is backed by a dedicated a ccount team
a t t u n e d to t h e oil and gas industry. Make your next pr e-eng ineer ed metal
bu i l d i n g fast , safe and affordable. E m ail oiland gasC? rrr eri llic .corn today.
Make it Metallic.
WETA L L I [
r
T,
37
COVER STORY:
with Rusa Resources earlier this year for shale gas exploration covering more than 38,000 sq km (14,670 sq miles)
near the Dampier and Bunbury natural gas pipelines, and
Tap experts indicate that Devonian shale oil also will be
targeted in the development.
Falcon Oil & Gas focuses on opportunities outside of
North America and recently highlighted the Beetaloo
basin in Australias Northern Territory, which is equivalent in size to the net acreage of the Bakken play in
North Dakota. Falcon has four licenses covering the
majority of the basin and drilled one well, Shenandoah1, with estimated recoverable reserves of 18 Bbbl of oil
and 64 Tcf of gas.
Falcon has a joint venture deal with Hess for the
majority of its acreage, with a seismic program currently
under way and an option to drill five wells in 2013.
Australian independent Exoma Energy Ltd., meanwhile, is pushing its central Queensland permits. It went
on record late last year saying that testing of core recovered from one well had confirmed the Toolebuc shale is
generating oil and associated gas in its permits. Exoma

drilled three core wells in the ATP 999 P permit last year
(Bessies-1, Euston-1, and Katherine-1) specifically targeting the Toolebuc shale.
The data from Exomas 2011 program provides the
first systematic technical confirmation that the Toolebuc
shale contains liquid hydrocarbons, bitumen, and associated gas, it added. Based on the laboratory analysis of
the Toolebuc shale core from Bessies-1, the oil-in-place
of the shale at that location appeared to be comparable
to that of the US Bakken shale in North Dakota. The
company is carrying out further appraisal of the commercial potential of the Toolebuc play throughout 2012.
Interestingly, Exoma already is partnered with
CNOOC subsidiary CNOOC Galilee Gas Co. Pty Ltd.
The Chinese player linked up with Exoma in late 2010
and is earning its participating 50% interest in five permits in the Galilee basin via a farm-in where it is paying
$50 million toward exploration and appraisal expenditures to August 2013.
?,
)
W
unconventional
SPE Annual Technical Conference and Exhibition r 8-10 October 201
Henr y B. Gonzalez Convention Center San Antonio ,Texas, USA
Ilk
I AO'
For 88 years, ATCE has been the leading technical conference covering all phases of
the E&P industry. ATCE 2012 continues the tradition of technical excellence offering
uml=
Largest exhibition in ATCE 's

history with 400+ com p ani es
1. 1
Student and young professional
activities
Register Now
www.spe. org/atce
38
Tt
1,
Mi
Socle of Petroleum En Ines
'QA
SPE ?
archerwell.com
Great White
pressure control
Tubular and
Rental services
Pressure pumping
servces
Directional
drilling
'1116
Engineering
Gray Wireline
AWC
frac valves
`, (>> J
Oil tools
Underba lanced
services
900
1
1
Platform
drilling
00
O
Multi service operations

Archer is a global oilfield service company specializing in
well delivery and well performance because we believe
that specialists do the j nh hest . We deliver better wells
;o help our c -istomers produce more oil and gas.
Weare Archer,the well company.
Call an Archer craftsman at 713 856 4222
Archer
The well company
Archer 2012
COVER STORY:
South America rising

Argentina and Colombia are hot on the shale trail.
Nancy Agin, Associate Managing Editor
ncremental changes in technology continue to be the

harbinger of new hydrocarbon resources as the industry forges ahead into new frontiers. A technique used
safely and reliably by the industry for decades, hydraulic
fracturing, has opened up the possibility of unconventional resource development in both new and proven
reservoirs across the globe. Such resources remain crucial to restocking future caches, and countries have
begun assessing domestic unconventional oil and gas
potential with an appraising eye on North Americas success in exploiting its prolific shale plays.
Adding to the Western Hemispheres emerging
prominence in the production of unconventional hydrocarbon resources, two South American countries have
joined the shale fracas and are focusing on exploiting
their own largely untapped unconventional resource
potential. Around the world, the main story has been
one of nascent shale gas exploration, but shale oil in
particular is being targeted by Argentina and Colombia
with the goal of increasing their oil production, and
both governments are actively engaged in their national
oil companies progress in prospects that exhibit characteristics on par with the Eagle Ford and Bakken liquidsrich plays in the US.
However, the political and economic turbulence present in many countries in the world could stand in the
way of the large-scale development of and immediate
access to such resources in these countries, while regulations continue to tighten and costs fluctuate along with
inflation. Lack of technical know-how and human
resources, flagging output, and relatively low prices also
contribute to the uncertainty surrounding unconventional resource viability in many regions worldwide.
Nevertheless, companies seeking to bolster reserves
are eying promising new source rocks in the quest to
discover more resources.
Colombia looks to compete

With the goal of bringing additional fields online and
improving recovery to 1.5 MMb/d by 2020, Colombias
national hydrocarbon agency has begun touting a new
crop of unconventional oil and gas blocks in the countrys 2012 licensing round roadshow, which was pre40
The Vaca Muerta shale play in Argentina shows evidence of light

oil and wet and dry gas, with a thickness greater than 250 m (820
ft). (Image courtesy of Repsol)
sented during CERAWeek 2012 in Houston in March.

The round is unique in that blocks prospective for
unconventional resources are being included for the
first time.
Out of the 109 blocks on offer, approximately 30% are
unconventional, Colombia Hydrocarbons Director Julio
Cesar Vera Diaz said in a public statement in March.
Speaking at CERAWeek, Mauricio Crdenas, Colombias Minister of Mines and Energy, explained that the
country is exploring new opportunities as its oil sector
undergoes what he described as a silent revolution to
avoid becoming a net oil importer due to waning production. In recent years, South Americas third-largest
oil producer has evolved from a pariah of investment
to one of the most competitive in the world, according
to the minister. The change is being marked by the
transformation of national oil company Ecopetrol,
which recently has gone through a series of financial
and management reforms. Technical capabilities in E&P
also have improved in Colombia, Crdenas said, and
ongoing upgrades to existing infrastructure and faciliJuly 2012 | EPmag.com
MEXICO'S OIL AND GAS INDUSTRY

AT YOUR FINGERTIPS
Mexico Oil & Gas Review contains everything you need to know about the Mexican oil and gas industry.
This annual publication , available in print . iPad . eBook and online editions , gets to the heart of the issues
surrounding the hydrocarbons sector in Mexico , examining in detail the role of Pemex , the government
and the private sector in shaping both targets and results in the oil and gas industry,and looking at the
biggest challenges currently facing the country in terms of regulation, technology and policy.
We are now introducing the Mexico Oil & Gas Review 2012 iPad edition.
Download your free copy at: www.mexicoo llandgasreview.com/iPad
o
11
1
1
1
1
1
1
1
i
,
www .mexicoollancigasreview.c om
Twitter
ar.@ollandgasmexiico
ollendgesmexleo a nd @petrokomexko
Blog: w ww.oilandgasmexko
_ .
mi
I
mi
MEXICO
Oil
A GA S RF V I FW
COVER STORY:
ties are making headway in expanding regional producWith Ecopetrol looking to produce more than 25,000
tion capacity.
b/d from its unconventional shale fairway by 2015, the
Conventional and unconventional areas on the table
Middle Magdalena basin could prove to be a boon for
in Round 2012 will be awarded to the successful bidders
global shale players.
in November, and contracts will be signed the following
Triple play in Neuqun basin
month. Meanwhile, Ecopetrol said it plans to spend
The substantial oil and gas potential of the Vaca Muerta
approximately US $8.5 billion in 2012, with $1.4 billion
shale play, said to be three times as thick as the Eagle
earmarked for new exploration.
Ford and relatively permeable, has created a buzz over
A month following news of Colombias bid round,
Argentine shale development. According to the
Calgary-based Canacol Energy Ltd. reported
US Energy Information Administration,
that subsidiary Carrao Energy Sucursal
Argentina has more than 774 Tcfe of
Colombia had entered into a farmcombined shale resources, the
out agreement with ExxonMobil
worlds third-largest of such
Exploration Colombia Ltd. to
reserves.
explore 126,000 net acres
The Neuqun basin is
with exposure to a potenone of four major Argentially large unconventine shale basins that
tional shale oil play.
bears particularly favorExxonMobil would
able properties for oil
earn 50% of Canacols
and gas production
40% interest in a nonand has historically
operated asset in
produced the largest
Colombias Middle
share of the countrys
Magdalena basin, with
conventional hydrocarExxonMobil expected
bons, according to Hart
to carry the cost of
Energy Research Groups
drilling and testing up to
Apache operates in the arid Patagonian plateau
Argentine shale: Assessthree wells targeting conin the Neuqun Basin of Argentina.
ment and outlook to 2030.
ventional and unconven(Photo courtesy of
The basin contains three
tional prospects in the La
Apache Corp.)
organic-rich shale formations:
Luna and Rosablanca formathe deeper Mid-Jurassic-age Los
tions. Both of these are proven oil
Molles formation, overlain by the Late
source rocks in the area, Canacol said
Jurassic/Early Cretaceous-age Vaca Muerta,
in a public statement. The first two wells will
and the Early Cretaceous-age Agrio formation.
be drilled vertically and the third as a horizontal multiJurassic and Cretaceous sedimentary sequences occur
stage fractured well. According to the companies, total
at depths ranging from less than 2,134 m (7,000 ft) near
potential investment on the block is approximately $50
the south basin to more than 4,572 m (15,000 ft) at the
million.
basin center and up to 1,000 m (3,000 ft) in thickness.
According to Canacol, the VMM 2 E&P contract in
According to the report, the organic shale of the Vaca
which ExxonMobil will participate is one of three adjaMuerta formation is considered to be the Neuqun
cent contracts that expose the company to a promising
basins primary hydrocarbon source rock. The shale is
shale oil fairway in the thick Cretaceous La Luna and
found at depths greater than 2,743 m (9,000 ft) in the
Rosablanca formations, which the company says is analobasin center, where it is more than 213 m (700 ft) thick,
gous to the South Texas Eagle Ford formation. Vertical
and while thinner than the Los Molles shale, it has
La Luna wells drilled in the Totumal and Butarama
higher total organic content and a wider areal extent,
fields in the Middle Magdalena basin have tested rates
the report notes. More significantly, the Vaca Muerta
up to 900 b/d of light oil, the press release notes.
has a productive area of approximately 60,088 sq km
The La Luna shale play also is considered the primary
(23,200 sq miles), over half of which is in the oil window
source rock found in Venezuelas Maracaibo basin,
around the shallower basin margins, according to Hart
which reportedly contains more than 250 Bbbl of
Energy Research.
recoverable oil.
42
COVER STORY:
In 2011, Spanish-Argentine operator Repsol YPF made

a massive oil-prone shale discovery in the Neuqun basin
that could potentially transform the country into becoming a major hydrocarbon exporter. The Vaca Muerta project, now being developed by Argentinas YPF following a
government takeover of Repsols share in April, is the first
major development of an oil-prone shale reservoir outside of North America. The play had produced 700,000
boe of shale oil by year-end 2011.
In its joint venture, Repsol YPF first drilled and
fractured five vertical wells in the Loma La Lata concession area, with initial recoverable oil estimated at 150
MMbbl. Preliminary results indicated 77% of YPFs
acreage contained oil, while the remainder comprised
both dry and wet gas. In early 2012, US consulting firm
Ryder Scott had estimated gross contingent reserves in
a 1,100-sq-km (425 sq-mile) area at 1.525 Bboe, consisting of approximately 1.115 Bbbl of oil contingent
resources and 410 Mboe of gas. In February, Repsol
had raised its hydrocarbons reserves and resources esti-
mate in the Vaca Muerta shale play to approximately

22.807 Bboe.
Other active shale players in the Neuqun basin
include Apache, Americas Petrogas, Total, and EOG
Resources. Apaches Argentine division had drilled four
exploratory wells by year-end 2011, including a horizontal well with multistage hydraulic fractures in the Los
Molles formation that began producing at an initial rate
of 4.5 MMcfe/d.
But while highly prospective for shale resources, it is
unlikely Argentina will replicate the North American
shale oil and gas story in the near term because of internal obstacles and risks associated with difficult logistics,
erratic government policies, high costs, low prices, and
inflation, according to Hart Energy Research. The
research groups outlook for planned Argentine shale
oil and condensate production based on a Vaca Muerta
development scenario for oil and wet gas zones and Los
Molles scenario for its wet gas zone is a conservative
90,500 b/d and 490 MMcf/d by 2020.
Silica is a problem. J&J has a solut i

J&J offers inte rated and retrofit equipment to control airborne silica onsite.
AS
now .
r1..,.
r-
imni(r,;?m?
unuuumnr
43
INTELLIGENT
OPERATIONS
Launching the next decade

of smart solutions
As digital oilfield programs continue to gain momentum, the question now is
what is next for one of the most innovative areas of the energy industry?
any of the companies at the forefront of the intelligent energy revolution have now reached a point
where they have, to a large extent, achieved what they
originally set out to do. But all readily admit there is still a
very long way to go.
BP has taken a lead role from the beginning with its
Field of the Future technology flagship, with the companys digital oilfield program having now run for more
than 10 years. The program now routinely supports more
than 80% of the operators top producing wells more
than 1 MMboe/d of net production.
BP outlines its activities so far into two distinct phases
and says the characteristics of these phases also apply
more generally within the industry.
Phase 1, covering years 2000-2005, dealt with demonstrating the validity and potential of the digital oilfield
concept. This phase dealt with engaging asset and major
project teams in understanding the potential value in new
ways of working by accessing real-time operational information. In an R&D sense, Phase 1 was about developing
and integrating a diverse set of tools to support technology trials and prove the concept.
According to Steve Roberts, vice president of the Field

of the Future program, Phase 2 (2005-2011) saw BP start
to implement at pace and scale. That deployment yielded
approximately 400 specific value stories as well as demonstrating numerous capex savings, efficiency improvements, and examples of safety assurance.
Value delivery
Giving a paper at the recent SPE Intelligent Energy event

in the Netherlands, Roberts said, For BP, the focus was on
delivery of discrete real-time remote monitoring solutions
and target-driven value realization for well monitoring,
surveillance by exception (i.e., event-driven rather than by
routine scheduling), equipment reliability, and production optimization. We have documented value delivery
of more than 70,000 boe/d net cumulative production
impacts, plus other benefits. The choice of specific technologies was less important than the drive for sustainable
implementation and solid business cases.
An example of BPs latest generation of digital oilfield
projects is the companys Valhall Redevelopment and
Skarv projects offshore Norway. BP Norway has been at
the leading edge of trialing digital oilfield concepts since
the beginning of Phase 1.
These two developments were built from the outset with
digital oilfield principles as a core feature of
BPs Valhall field redevelopment offshore Norway was built from the outset with
their design, and they represent what may be
digital oilfield principles as a core feature of its design. There is a built-in abilthe first second generation developments,
ity to shift some of the control functions for Valhall to an onshore control room
building on all of the previous experience and
a virtual extension of the offshore control room in the new field center platform
pushing the concept further on. This is exemin the foreground. (Images courtesy of BP)
plified by the built-in ability to shift some of the
control functions for Valhall to an onshore
control room a virtual extension of the offshore control room. Similarly, the operational
model for Skarv is dependent on collaboration
between three key locations (one offshore and
two onshore). All will be equipped with a full
suite of Field of the Future capabilities.
Roberts added that BP observed similar
progress being made in other companies. If
we take a moment to look back on the industry achievements of the past 10 years, it is clear
44
INTELLIGENT
OPERATIONS
that we have made a huge step forward in the way we can operate our assets. We
therefore conclude that we are at or close to the end of Phase 2 and a complete
impact model cycle and need to consider if and how an equivalent step change
might be achieved over the next 10 years, he said.
The range of industry experience raises an interesting question about options
for the next phase of activity, however. These, he said, range from a focus on
embedding the success to date as business as usual to targeting the next class of
difficult problems or operational risk reduction. Using the skills and experience
from Phase 2 could unlock even greater value and further transform the work of
energy companies.
tII ,
I? ri r<<
. ?
I
Performance breakthroughs
Behind all this is the fact that the resource base of the industry, although large, is
finite. BP expects resources to increasingly come from fields that are challenging
to produce, both technically and geographically.
Within its own resource base, the expected mix will comprise increasing
amounts of unconventional oil and gas in future years. Taken together, these factors lead to a demand for continuously improving efficiency in what is essentially a
commodity business, requiring appropriate technology to enable performance
breakthroughs. The digital oil field has become a key element of the toolkit across
the industry for meeting these challenges, according to BP.
But while the concept of digital oil fields is held in common across multiple
upstream operators and their suppliers, there has been difficulty in producing an
agreed industry definition of what constitutes a digital oil field or associated corporate program, Roberts said.
Reasons for this include the fact that different companies:
have asset portfolios that drive different priorities and focus areas for development and application;
set out with different relative strengths and weaknesses in their operating and
technology competencies;
might have often created their initiatives by bundling largely preexisting programs; and
typically have an individual business context and organizational design that
impacts the ability (positively or negatively) to progress a visionary and multidisciplinary technology concept through to sustained adoption and application.
He also pointed out that the digital oil field is a broad, cross-functional concept
with potential to fundamentally alter the way the industry operates oil and gas fields.
Its implementation is complex, and business cases can be very varied, he said.
The underlying technology stack has numerous components from sensors
through communication buses to complex analytical algorithms to digitally automated actuator valves. This means the technical permutations for creating value
coupled with the workflow improvement opportunities are numerous.
Decomposing the concept into tractable pieces in order to make progress presents any company with a potentially bewildering array of choices from the total
potential technical and workflow scope. These choices have been made by each
operator such that, to the best of their knowledge and ability to predict, they will
maximize the likelihood of achieving a successful, sustained value-adding outcome.
$5 billion value of smart technologies

Another early leader in digital oilfield technologies has been Shell, which in the
first decade of its own Smart Fields initiative focused on new technologies, makEPmag.com | July 2012
Conventional
isdom says
at multiple-zone
frac systems
are only for
open holes.
At NSC-Tripoint,
we do things
a little
unconventionally.
INTELLIGENT
OPERATIONS
BP is aiming for 100,000 boe/d from intelligent energy solutions

by 2017, and the company is ahead of target, already having
achieved an estimated 73,000 boe/d by year-end 2011.
ing business cases and implementing the technologies as

widely as possible.
The program started in the early 2000s in areas such as
installing monitoring and control devices in wells and was
then expanded to overall field management, with the concept proving robust and still serving as a guiding principle
in the approach to implement smart technologies in the
global asset base.
The uptake of smart technologies and sustained benefits was achieved across the global portfolio of assets in
Shell, leading to broad experience of deployment and sustainability, covering nearly all operating environments in
terms of desert to arctic, field development/depletion
types, and various organizational models.
Overall this has led to major contributions to the bot-
INTELLIGENT
OPERATIONS
tom line, according to a paper presented at this years

Intelligent Energy event by Shells Frans Van Den Berg
and Leo de Best. The value of Smart Fields for Shell and
its partners was assessed at US $5 billion as a result of the
smart technologies. Learning from successes and failures
in implementations in the value assessment has given, and
continues to give, deep insights in optimizing of the
approach for technology deployment, they stated.
Looking ahead, they went on to highlight that as Shell
enters the second decade, the focus of the Smart Fields
program is on accelerating the implementation of new
technologies across assets in a way that value generation is
sustained. The key success is achieved once the edge
technology has become commodity, the authors said.
Shells Edwin Verdonk, vice president of subsurface
expertise and technology deployment, was one of the cochairs for the Intelligent Energy event. We see that the
speed and implementation of new technology is faster
than ever before, and thats very important. When you
look at the changing world and the complexity of the challenges facing us, technology is going to get us to a different place, a new level, he said.
Verdonk went on to stress the importance of industry
collaboration and targeted partnering to help get companies the technology they need faster. In the old days we
would do it all ourselves. Now, through methods such as
targeted partnering, we can get there faster. We see a
much more open environment than ever before, and this
greatly improves the speed of the implementation of the
technology, he said.
Managing data mountains

Verdonk also warned about the need for the industry to
NSC-Tripoint has taken multip le-zone fracturing to another level ,

where cement is just another isolation option. Our revolutionary completion
systems are designed to run in open hole or cemented casing app lications.
This saves trip time and completion costs , while extending the reach of the
fractured zone and providing an effective stimulation of the entire wellbore .
Unconventional? Not for NSC-Tripoint.
PACV SWSHOT SIk

SPMMAN-
continue getting smarter about managing the huge

amounts of data and knowledge now being produced
and what is done with it.
This also was highlighted by Roberts, who pointed out
that individuals having so many screens of data in front of
them is a problem. The aerospace and car industries have
overcome this problem. An aircraft has real-time information flooding in all the time, but the pilot sees it all in a
very integrated way. Its the same with a car, where there is
monitoring going on all the time throughout the vehicle in
the tires, engine, brakes, and so on. But the driver is only
alerted when there is a potential problem. We have to engineer and filter our information in the same way, he said.
Overall, Roberts highlighted three basic choices facing
the upstream industry as it moves forward as well as the
digital oilfield practitioners operating within it.
The first two are:
New Business As Usual consolidate the current state,
declare success, and move on to something else.
New Innovation Phase continue to develop the current state tactically as new technologies capable of
extending or closing gaps in the current scope appear
or are conceived.
But it is the third that he says BP has opted for: Next Generation Deep Capability seek to define a prize for the next
10 years equivalent to that delivered in the last decade and
develop the strategic approaches necessary to deliver it.
Next generation scenario

This next generation scenario requires a visionary view
that there is an additional prize to be secured over what
has been considered to date, Roberts said. This is likely to
involve some fundamental shifts in how the company could
Completion Tools
Gas Lift Systems
Service Tools
TCP/DST Tools
For more information on our unconventional and

conventional products and servic es, call us today :
331.330.8180
standardize on and introduce a new generation of working

practices. These would be enabled by highly integrated
systems incorporating currently emerging technologies
focused on key business issues, and the company would
build that on digital oilfield learnings from phases 1 and 2.
Current toolkits and approaches will need to be maintained until such systems can be delivered. However, it is
likely that the data and system integration needs of this
next generation of solutions may require re-architecting
and re-implementing earlier systems that form the basis of
todays digital oil fields, effectively making them obsolete
and requiring new investment. A full life cycle view will be
required in order to make the necessary long-term commitment to deliver such systems, he said.
He also suggested that an element of the next-generation deep capability scenario is a set of system interfaces
designed to meet the needs and aspirations of the nextgeneration engineers and geoscientists for integrated
data and information-rich, collaborative, and mobile work
environments.
Roberts summarized the key characteristics of its solutions as:
being empowered by real-time information;
having a large business process footprint that enables
and supports corporate standards;
providing early warning of performance issues/risks;
suggesting remedial actions to mitigate problems and
reoptimize performance; and
relying on futuristic, highly collaborative, mobile, and
device-independent interfaces.
We see this as a vision as engaging and challenging as
that we had when we first developed our Field of the
Future concept 10 years ago, Roberts said.
www .NSCTripoint.com
NSC-Tripoint TM
The way completions should be
COST AND RISK

MANAGEMENT
M&A transaction risks

can hamper growth
Inorganic growth is an important goal for many companies.
But like growth through the drill bit, transaction risks need to be managed.
Brandon Cradeur, Grant Thornton LLP
to examine key transaction considerations that are unique

to their companies and have the potential to negatively
impact capital deployment and/or cash flows if not properly measured and factored in. Grant Thorntons Energy
Transaction Advisory Services group helps companies
assess E&P transaction risks. Executives should consider
a number of essential items within these categories when
conducting due diligence.
t might surprise some that Houston ranked second

only to New York City for M&A deal value during the
first nine months of 2011, according to the Houston
Chronicle. To be sure, this was a notable achievement
considering that US metropolitan areas such as Chicago
and Boston have a significantly
higher presence of venture capitalSince reserves have a finite
ists, private equity firms, and hedge
value, E&P companies must
funds whose business models
acquire and exploit reserves.
essentially consist of buying and
(Images courtesy of
selling companies.
Grant Thornton)
But to those in E&P, Houstons
emergence as a hotbed for M&A
activity was far from unexpected.
Since their primary assets (i.e.,
reserves) are a dwindling resource
with a finite value, E&P companies
are under constant pressure to
acquire and exploit reserves or buy
other E&P companies when they
cannot replace reserves organically.
Fortunately, their historically strong
balance sheets and cash positions
allowed them to make deals last year,
even as many other industries and
locales were forced to retrench.
Understanding key transaction
risks and negotiating and structuring the transaction to mitigate them
Transaction risk assessment
are critical to a successful deal. After all, a single M&A
There are five overarching categories for assessing transtransaction can alter a companys future significantly.
action risk.
The challenge is that most companies are operationally
Reserve and production characteristics. Concerns here
focused and typically do not have sufficient M&A experiinclude:
ence at the executive level or the infrastructure needed
The impact of historical versus projected production
to acquire and integrate companies effectively. With so
volumes and volatility on cash flows;
many E&P company earnings and reserve restatements
Concentration and diversification among geologic
stemming from acquisitions in recent years, it is clear that
basins (e.g., percentage of oil versus gas, onshore
the industry is not immune to this challenge.
versus offshore, and number of wells);
With that in mind, it is a good idea for E&P executives
48
74 ? ?T =
IN
,
P . A C n ?r ;?
?
Nk.
7;r
r
3 /J
alga.,:
M:
j
APr
ubsea Safety Systems
va
-L
6iM
WELL FLOW MANAGEMENT--
management.We provide a
complete package of specialised
services and products to assist
our customers In achieving their
goals across the lifecycle of a well.
eople are committed to
ring operational excellence
I
www.exprog roup.com
COST AND RISK

MANAGEMENT
The duration that proved undeveloped reserves

(PUDs) have been on the books, the related
drilling program to develop these PUDs, and
whether there were significant changes to the
drilling program;
The reserve report, which is a critical report relied
upon during E&P transactions and presents many
risks and estimates that are important to consider,

including risks related to whether the report was
prepared internally or externally, projection sensitivities based on production and forecasted capital
expenditures capex, and estimates generated by
comparing the current NYMEX strip with the price
deck used; and
Enterprise risk management Risk in the spotlight

By Alan Millis, Grant Thornton LLP
ow more than ever oil and gas companies should be

focusing on managing risk. Finding and producing oil
and gas has always been an inherently risky business, but
today there is far less margin for error than there was just
a decade ago. The explosion of social media has sparked
a new wave of social activism and increased pressure on
politicians and regulators to thoroughly scrutinize the business practices of E&P companies.
As a result, leading E&P companies are implementing
or enhancing an enterprise risk management (ERM) program to more confidently manage major risks that naturally occur in the E&P business. Optimally designed, an
ERM program produces a standardized and comprehensive risk inventory that arms board members, company
executives, and department managers with the information they need to identify the risks that are most important
to the companys strategy.
Many E&P companies find that they are placing more
emphasis than before on addressing operational risks,
specifically:
Environmental. The inherent potential for release of
pollutants or spills that cause ground, air, or water
contamination; companies are focused on honing
their ability to quickly and effectively respond to
such a crisis;
Regulatory. Greater challenges in complying with
evolving regulatory requirements and inconsistent
enforcement of rules in jurisdictions, particularly in
emerging resource plays where regulators have limited experience with oil and gas operations;
Public relations. The proliferation of social media,
which is significantly increasing the velocity with
which company news is disseminated to the public,
prompting companies to devise new strategies for
shaping news coverage and opinions;
Contractors. An insufficient supply of adequately
trained wellsite contractors in the newer resource
plays;
50
Water management. State and local restrictions or

lack of proximity to an adequate water supply in certain geographic areas, making it more difficult to
obtain sufficient water for fracturing wells; and
Security. Increasingly sophisticated cyber-terrorists that are an emerging threat to production control (measurement/flow) systems.
Of course, it is one thing to identify risks and quite
another to manage them in a cost-effective way. That is
why a risk inventory is just the first step in implementing
an ERM program. Once a company has accomplished
this, it should evaluate each risk in terms of potential
financial impact to the business, likelihood or probability
of occurrence, and the speed at which risk events can
have an impact on the business.
ERM is much more than a process for tracking risks.
According to a recent study by the American Productivity and Quality Center, organizations with mature ERM
programs in place reach beyond process design and
mechanics and aim to influence culture, people, and
mental models. In this regard, a mature ERM function
engenders a high degree of change management, necessitating the active involvement of senior leaders. A topdown approach is recommended where executives
engage each functional leader in the organization, particularly in operational areas, to continuously build
knowledge and expertise throughout the organization
about key business risks and related risk mitigation
strategies.
Given the increasing complexity of risks facing E&P
companies and the speed with which missteps are disseminated, oil and gas business executives may be
tempted to err on the side of caution and shoot down new
opportunities that could put them in a position to expand
the business. A well-managed ERM program positions
business leaders to resist this temptation and pursue
each new potential venture with the confidence that they
are prepared for whatever might come.
-NFALCON"
TECHNOLOGIES
?
..M. ?
..
?
' J
.<
1.
v
l'?i
? t '
?
?.
i
?T
? "
t
?A.*l. !
? i z? L
?
A ' .?.
.
t
e ??
.
+
?k
?i
[
protect.
engineered t
'?'
_.
our investment
he environment
yourreputation
pi t
?! ; r
.I
4 ?`.
,? ?
le .
?
`
Advanced engineering applied to spill prevention,cost containment and risk reduction.

Our patented Falcon Liner ' provides spray-
Falcon Liner applications:
on polymer protection that's impervious
Secondary containment
to corrosion or damage due to chemicals

or weather,virtually eliminating the risk
Tank liners
of leaks. And with a useful life of 20+ years ,
Tank bases
it dramatically reduces maintenance and

replacement costs.
See how Falcon Technologies'can help

you protect the things that matter.
X2012 Falcon Technologies and Services , Inc .
A CARBO Company
Watch our video to learn more.

Scan the code below to see our
video on your smart phone,or
go online: falcontsi.com/eandp
Location liners
Water impoundment
I
r
* T
Questions? Call +1-281-921-6690
.' e
COST AND RISK

MANAGEMENT
Historical asset impairment testing and related

different risk profiles, such as an out-of-the- money
analyses.
trading book from aggressive marketing/trading activity
Reinvestment. Concerns here include:
or environmental liabilities from refineries and chemi The reserve life index calculated by dividing proved
cal plants.
developed producing reserves by annual production
In addition to looking at these items while conducting
that indicates the potential pressure of capital
their due diligence, E&P companies should consider
deployment;
factors that fall outside these broader categories. Follow Comparison of the annual reserve replacement
ing are some of the questions clients should answer:
index, which indicates a companys ability to replace
Does the asset base, as currently leveraged, generate
its annual production with indexes calculated by
adequate return on capital invested? If not, what are the
companies of similar sizes;
scenarios to optimize investment? What are the strategic
Evaluating a companys ability to economically
synergies that can be created by the transaction under
replace reserves, which involves looking at historical
consideration, and how are they expected to impact the
finding and development (F&D) costs based on doloverall value chain? Are hedging programs in place to
lar/boe;
protect against commodity price exposures? Are there
Calculating an undeveloped lease expiration waterany joint venture or royalty issues, counterparty risks, or
fall, which identifies potential acreage and reserves
off-balance sheet financing contingencies?
at risk of being lost;
The challenge, of course, is finding the best way to
Drilling and capex assumptions used in developing
perform financial and operational due diligence in
PUD projections;
todays environment of limited or stretched corporate
The reserve acquisition price/boe versus historical
development budgets. Companies can build out their
F&D costs; and
corporate development departments, engage experi The existence of commitments related to seismic
enced transaction advisory professionals to leverage
acquisition, capex, drilling, or long-term take-or-pay
their internal team, or elect to do both. Whatever
contracts with commodity price caps or floors.
approach a company takes with respect to due diligence,
Operating and capital efficiency.
the rewards for conducting it will be clear: The company
Concerns here include:
will not only make more informed decisions but also
Operating efficiency as measured by the full-cycle
perform its fiduciary duties for its investors and lenders
cost and expressed as dollar/boe. The full-cycle cost
in an optimal way.
is the average cash cost to produce each
boe and the capital necessary to replace it
A single M&A transaction
in other words, the sum of lease operatcan alter a companys
ing expenses plus general and administrafuture significantly.
tive burden plus F&D costs; and
Managements ability to maintain a strong
liquidity position as measured by the ratio
of capital spending to cash flows.
Tax exposures. Concerns here include:
Federal, state, and local income tax
exposures;
Sales and use tax, property tax, employment tax, escheat, or other applicable tax
exposures; and
Deferred tax assets/liabilities, net operating loss carry-forwards, the depletion
deduction allowance, like-kind exchanges,
and tax basis verification.
Non-E&P operations. The major concern
here is the potential for significant liabilities
related to other businesses (e.g., midstream,
distribution, or refining/marketing) with
52
E ?
r
From The Industry Experts in

Unconventional Resources...
IVI
Publishers of the Unconventional Playbooks and 2011

North American Unconventional Yearbook
DUG
DE
SRJ
Organizers of the DUG conferences
And developers of the uGcenter com dedicated

online resource on every major unconventional play
I
A RTi
"
... comes the most

comprehensive global
shale oil study on
the market.
Hart Energy Research Group's latest report
"Global Shale Oil Study"
provides a 250 page thorough analysis of global trends:

A review and assessment of 85 shale oil plays for all regions of
k
the world, highlighting key geological aspects of each potential reservoi
Current activities in each region/play and key market drivers and
challenges to commercial development
Data requirement and how to evaluate a shale-oil reservoir

Shale oil development considerations -Well decline patterns,cost
control techniques and shale oil economics under varying oil prices,
development costs and fiscal terms
To order your copy today,contact us at
mwarren@hartenergy.com
HARTENERGY
COST AND RISK

MANAGEMENT
Pore pressure monitoring

optimizes deepwater wells
Real-time monitoring calibrated the predrill model and enabled the drilling of a difficult well.
Graziono Capone and Giovanni Bucari,
Eni Indonesia; and Somesh Bahuguna
and Ngurah Beni Setiawan, Schlumberger
xploration drilling in deep water exposes operators to

high risks and significant drilling challenges, especially
when they encounter narrow mud weight windows. Pressurerelated events can cause serious safety hazards and costly
nonproductive time (NPT) due to kicks, overpulls, losses,
stuckpipe, or blowouts. The formation fracture gradient fixes
the upper limit of the safe mud weight window, while pore
pressure establishes the lower limit. In greater water depths,
fracture gradients tend to be lower. When pore pressures
also are higher, there is little margin for error.
Success in such high-risk wells depends both on thorough
predrill planning and real-time pore pressure monitoring
and intervention while drilling. Recently, Eni Indonesia
achieved all of its targets without suffering any pressurerelated NPT in four critical deepwater exploration wells,
one of which had an operational window so narrow that it
might have been undrillable without real-time monitoring.
Predrill pore pressure study

Eni Indonesia planned to drill four exploration wells in relatively unexplored blocks in the Kutei and Tarakan basins
offshore East Kalimantan in water depths from 427 m to 825
m (1,400 ft to 2,700 ft). All four wells targeted new, deeper
gas-charged reservoirs, not all of which had been encoun-
tered in previous drilling. Offset well information was limited, which increased potential risks and uncertainties.
Eni teamed up with Schlumberger Data & Consulting
Services (DCS) to conduct a detailed predrill pore pressure study. It was important not only to predict the presence of overpressure but also to better understand its
cause. Following a thorough audit of all available well and
seismic information, specialists generated pore pressure
models for each offset well using two independent methods to increase confidence. One method, described by
Eaton (1975), uses a normal compaction trend line. The
other, described by Bowers (1995), involves establishing
seismic velocity and effective stress.
Base shale pressures were estimated using seismic velocities and offset well data. Models were calibrated against
direct measurements of formation pressure, leak-off tests,
and pore pressure-related drilling events observed in
drilling reports and logs. Then predrill pore pressure models were constructed for each of the four planned well locations using different methods for shales and permeable
formations and taking into account the buoyancy effect of
gas. Finally, Eni and Schlumberger engineers and geoscientists agreed on predrill fracture gradients and pore pressure
estimates to guide casing design, mud weight programs,
and contingency plans.
The T2 exploration well in the Tarakan basin proved the
most challenging well in the campaign. According to seismic interpretation, target reservoirs in the T2 were laterally continuous with gas-charged sands in an offset well.
The offset well had a safe mud weight window up to 2
lb/gal. While measured formation pressure was elevated in
the offset well, the predrill study predicted additional overpressure of nearly 1.5 lb/gal in the planned T2 well due to
gas buoyancy. Since this well was drilled at a water depth of
825 m, low fracture gradients were estimated, which further constrained the mud weight window.
Real-time pore pressure monitoring

In deeper water, fracture gradients are lower. When pore pressures
are higher, the safe mud weight window can be extremely narrow.
Avoiding NPT requires thorough predrill planning and real-time
pore pressure monitoring. (Images courtesy of Schlumberger)
54
While drilling the critical reservoir zones, real-time pore

pressure estimates were calculated to update the predrill
model and predict pressures several hundred meters
ahead of the bit. Unexpected changes in pore pressure
would have to be addressed quickly to optimize safe
There is more
to the story
READ MORE ONLINE
EPmag.com
were due to under-compaction

rather than fluid expansion or tectonic stresses and would increase
updip due to the buoyancy effect of
gas. The LWD data and real-time pore
pressure-while-drilling data enabled
even more reliable estimates. Finally,
post-drilling reviews were conducted
Target sand in the planned T2 well (left) was 5 km (3 miles) away and 458 m (1,500 ft)
on each well, during which additional
updip from an overpressure zone in the offset well. Due to the buoyancy effect of gas,
hard data were acquired through wirepore pressure in the T2 was expected (and found) to be even higher.
line services. Real-time pore pressure
models were calibrated accordingly and updated by intedrilling practices without incurring pressure-related NPT.
grating these wireline data, thereby enhancing Enis knowlBecause the predrill model indicated that the first target
edge base for future drilling operations in the area.
sand in the T2 exploration well would be overpressured,
drillers were prepared to increase mud weight as necessary.
Real-time pore pressure computations based on streaming
Acknowledgement
LWD data showed a gradual rise, as predicted, which
The authors thank Eni Indonesia and Schlumberger management
increased the teams confidence in the validity of the
for permission to publish this work. This article is based on a paper
predrill model. About 50 m (150 ft) above the first overpublished in the 35th Indonesian Petroleum Association Annual
pressured target sand, a sudden increase in gas readings
Convention & Exhibition, IPA11-E-210, and at SPE APOGCE,
also was observed. The 16-in. casing was set, and mud
Jakarta (SPE-147914).
weight was increased accordingly. While drilling the 1434-in.
section through the first sand, a high-pressure increase
closely matching the predrill model was observed. This
proved the sand was in pressure communication with the
offset well and suggested that drillers could expect higher
pressures in deeper gas-charged target sands yet to be
drilled. Because the pressure in the first reservoir was very
close to the current limit of the operational window, mud
i
weight could not be increased safely without first casing the
1
V
3
hole. Hence, 13 8-in. casing was set earlier than originally
12 Series pressure
TX200 Series
One Series electronic
3
planned, and mud weight was increased. Because the 13 8switches are dual
pressure
switches combine
in. casing had been short-landed, 1134-in. casing, which had
seal approved and
transmitters provide
the reliability of a
provide fast acting
precise pressure
transmitter , with
been held in contingency, was added to the program.
alarm & shutdown
monitoring through
local indication and
Below the 1134-in. casing shoe, real-time estimates of pore
functions for critical
analog or digital
switching.
pressures in the shales were somewhat higher than preoilfield applications .
HART 7" output.
dicted, which provided advance warning that pressures in
the sands might be higher as well. As a result, ROP was
reduced, and pore pressure engineers carefully monitored
events for any signs that pressures were increasing. HowPressure and temperature monitoring, alarm , and
ever, no further high gas readings or pressure gains were
shutdown instrumentation solutions for the oilfield .
observed. Although the operational window remained
extremely narrow, real-time pore pressure monitoring and
Learn more at
continuous model updates enabled drillers to successfully
www.ueonline.com/oil
_ gas.htm
maintain mud weights slightly above predrill estimates
while drilling through the remaining target sands.
Post-drill review
Enis drilling campaign began with rather limited information on pore pressures and fracture gradients. The predrill
study had established that overpressures in target reservoirs
UNITED ELECTRIC
UE CONTROLS
55
COST AND RISK

MANAGEMENT
Mitigating risk a competitive

advantage, potential life-saver
Security is often seen as a necessary but unwanted cost center and an obstruction
to business overseas. But risk mitigation, a broader term, can save organizations
a considerable amount of money, not to mention lives.
John Drake, AKE Group
nlike the term security, which many automatically

associate with guns, bullets, and barriers, risk mitigation incorporates numerous principles ranging from training and staff preparation to cultural awareness and even
corporate social responsibility.
When a society is properly engaged by a company, even
the most hostile environments can be rendered much
safer for employees.
The energy sector has long operated in violent and
unstable hotspots around the world and is no stranger to
During the Libyan crisis, companies found that having an established security framework in place along with appropriate training gave employees options to choose from during the crisis and
helped ease their concerns. (Photos courtesy of AKE)
many hazards, be it unrest, pipeline bombings, abductions, or rising crime. In response to these ongoing problems, the energy sector has continued to lead the way in
developing safe working practices for its staff, building on
the strong culture of HSE practices first implemented for
employees in the North Sea.
What is important to note is that risk mitigation does
not simply help prevent accidents or harm. It also can save
or help earn money. For instance, staff who have undergone risk mitigation training are more confident at work56
ing in emerging markets, thus allowing a company to

expand its operations in lucrative but potentially hazardous environments rather than pulling out and missing
the opportunities.
Framework to overcome fear

A company with an office in Nigeria, for example, reported
a high level of fear among its expatriate staff in 2011. The
main source of concern was the rising risk of terrorist attack
by Boko Haram, a radical group responsible for a string of
bombings and shootings over recent months. The company
in question had received specific threats from the group,
and paranoia was building among employees.
However, on inspection it was realized that the company
had no evacuation plans in place at the facility. With a relatively short amount of training and preparation, the company was provided with options to choose from in the
event of a future crisis. Key escape routes and possible
nearby safe havens were identified, and staff members ran
a series of practice drills to ensure that all employees
would be able to deal with the situation in the event that
conditions deteriorated.
Simply having this framework in place considerably
boosted confidence at the facility. Workers had far less
trepidation about returning from leave, and the company
head office no longer struggled to obtain appropriate staff
for the tasks at hand. No crisis has yet affected the companys operations in Nigeria, but the plans had an immediate impact on morale and the working environment at
the office, improving productivity and allowing the company to increase its presence in what remains a highly
lucrative market. At a time when the companys competitors were actively reducing their activity in the country,
risk mitigation allowed it to expand and even exceed its
initial business objectives.
Reducing reliance on firearms

In some of the most hazardous environments, proper risk
mitigation techniques also can help reduce a companys
reliance on firearms for protection.
COST AND RISK

MANAGEMENT
simple and cost-effective measures that companies can

implement, with recent cases demonstrating just how
effective they can be.
Libyan crisis
A destroyed tank in Libya is a stark reminder of the security
dangers that oil and gas industry personnel face in areas of
domestic upheaval.
At this time, it is being widely cited in the media that no

vessel carrying armed guards has been hijacked by Somali
pirates. However, the less reported statistic is that no vessel
with properly trained crew and nonlethal risk mitigation
measures has been taken either. Alert crew members are
far more likely to spot approaching pirates and enact
appropriate evasive procedures than untrained crew.
Nonlethal measures also are significantly cheaper per
voyage. It is far more globally effective and considered a
less hazardous or legally murky means of dealing with
piracy than simply placing armed guards on deck.
As well as planning and training, there are numerous
The energy sector was caught up in a fast-paced and

highly dangerous crisis when Libyan airspace was closed
in early 2011. Amid rapidly deteriorating conditions in
the country, the first priority for most companies was to
ensure the safety of personnel and protection of assets.
However, what quickly became apparent was how costly
this was going to be for the organizations caught off
guard. When the situation began to destabilize, some
companies began to remove nonessential expatriate
staff. Those that failed to do so had to pay the full cost of
extracting almost all of them when the country descended
into conflict. With a dire shortage of flights, prices quickly
mounted, not least because a number of the few available
planes were block-booked by the highest bidders.
By this stage, any armed security or high fences mattered little to the expatriates caught up in the situation,
Innovative Oil and Gas Technology

f
IJ
New
Tech
Beyonr
RESIN COATED PROPPANTS
SILICONE
rrizatlon
Foam Control and Demulefficatlon Hydrogen Sulfide Scene
Create a Bonded Proppant

Pack for Optimum Fractur
Flow Capacity
Visit Us at SPE ATCE
8-10 October
- Boost Organic Demulsifiers

at a Lower Temperature
SAG' Silicone Ant'rfoams:
- Highly Effective in Either
Water or Oil-Based Systems
FF160/FF170 Fluorosilicones:
- Foarn Control for Gas/Oil
Separators
San Antonio,
'Strom a SAG.. vadc,s1a of trbmmOw Pefama, M1 , I , bI,C.

M-.-SM-1 , rIYJ11Ydl9 v c . OH-T Hvloo,G,,
1% USA. 1 281 646 2800
'G2012 Mmnerc 5{aa9H a>orrYZ t r . mn v.f>u ya t r v i r r w kuwrsla
a
l
1I t
f f ie S, flyGc
r. :
Effect ive H2 S Scavenger Or

Crude Oil, Natural Gas, LPG
and Environmental Waste
Global Footprint for Easy
mpmentive.com/oiifield
fracline com
MOMENTI E"
57
COST AND RISK

MANAGEMENT
particularly those stuck in compounds in the middle of

the Sahara. In fact, companies that relied on security
measures and an evacuation provider were often much
worse off than those that took alternative, more creative
approaches to protecting their interests. Expatriate staff
who had undergone training on how to survive in hostile
regions were often more resourceful and calm under the
immense pressure of the situation.
Companies that employed Libyan nationals from the
local area also did relatively well. Firstly, these individuals
did not have to be evacuated. Secondly, the provision of
local employment meant that the community surrounding
a companys business activities was far more likely to
defend it from bandits and opportunistic looters. Some
local communities protected company assets until hostilities were largely over. The fact that these businesses provided local employment meant that residents from the
local community had far greater intent to ensure the
safety of the business because they had a mutual interest
in keeping it running.
For many, the notion of security conjures up images of
F1
LJ
2012 Official Congress Stakeholders *:
NYNAS
<- PDVSA
Saskatch ewan
Governme nt
of Alberta
'- ptrc
Canada
Nautical Petroleum
Organ ized by:
58
Statoil
dmg :: events
armed guards, vehicle convoys, and tall fences. However,

the Libya case demonstrated that such defenses can sometimes be entirely superfluous. In many cases, such measures can even be regarded as reactionary, aggressive, and
inflammatory.
Armed motorcades
In 2003, as the dust settled in post-invasion Iraq, a plethora
of security companies sprang into action, recruiting ex-military personnel and amassing droves of armored vehicles
to escort clients around in convoys.
Many of these armed and high-profile motorcades were
characterized as driving aggressively and were perceived as
taking a shoot first, ask questions later approach. The
subsequent congestion, car accidents, and horrific civilian
casualties that came about as a result of their actions
stoked massive resentment from the Iraqi public.
This in turn resulted in a rise in militant attacks against
both the security contactors and their clients. More than
300 civilian contractors were killed in Iraq between 2003
and 2011. Evidently, if a company responds to a risk by
SEPTEMBER
WORLD
HEAVYOIL
10-13, 2012
ABERDEEN , UK
conference I exhibition I networking
- - L L LL A _ J I G
D' , d LGF, L
'J L L I F i L
courses I technical tours
A GLOBAL FORUM FOR BUSINESS LEADERSF

AND TECHNOLOGY ADVANCEME
THE COMPREHENSIVE EVENT FOR HEAVY OIL.
The North Sea's 'A tlantic Frontier " has a multitude of possibilities for
extraction and exploitation of heavy oil. Join international experts
in Aberdeen and share knowledge, best practices in operations, and
innovation for sustainability in heavy oil around the globe.
exhibit I sponsor I register
world heavyoilcongress.com
REGISTER TO ATTEND Enter reference code EPMAG
COST AND RISK

MANAGEMENT
deploying armed guards and putting up physical barriers

automatically, it not only reduces its profit margin but in
some cases can actually increase the level of risk.
As was the case in Libya, the employment of local nationals has reaped numerous benefits for companies working
in Iraq. First of all, Iraqi staff blend in far more than foreigners. This instantly makes them less likely to be targeted
by opportunist criminals or militants. Their local knowledge and cultural awareness also make them far more efficient at operating on the ground. They are much better
informed and can quickly assess fluid and often dangerous
situations and help company decision-makers plan activities with sensitivity and invaluable practical guidelines.
Local nationals also are not subjected to the same
visa difficulties constraining the many foreign workers
looking to get into the country at present. Domestic
staff turnover also tends to be lower than that with
expatriate workers. This can significantly reduce the cost
of employee training and means that companies can
develop a highly efficient domestic staff base in a country.
Companies that employ local nationals also will face fewer
Rupture Pin Technology
AT LAST!
Risk mitigation a competitive advantage

If applied correctly, risk mitigation techniques can help
protect employees, improve morale, safeguard investments, and maintain an organizations reputation and
integrity. While this is an obvious goal for risk and HSEQ
managers, the implementation of protective techniques
can sometimes conflict with the demands set by chief
financial officers. However, the benefits of protecting
employees from harm cannot be argued with. Neither can
it be argued that accidents or harm to a companys personnel, property, or reputation are in any way cheap or
worth the cost. Litigation, compensation, and business
interruption are all expensive.
Risk mitigation should therefore not be seen as a cost
center but as a competitive advantage, one that can be
applied to markets and areas of potential lucrative opportunities the world over.
CHECKERS"
i
INDUSTRIAL SAFETY PRODUCTS 111111110
25 YEARS OF KNOW-HOW PASSED ON TO YOU
Relief Valve
Dome ismedefrom W
smhlWd poycerbons
andaval ableln either
425 or 829'hefghtfer
lndeeeedsIsNby
No fluid impingement on the

seat, piston or seal.
Over 1,200 in service.
IN THE
USA
,nmiw"`
i 11111
nuiq!III!I!I ip,, ',,9 1n
Cermnlcf lash tube

base reduces heat
mdendhgdm Ito of
1114 fbeh IV
Change the pin or pin set point

in less than a minute.
A pressure range from
500 psig to 15,000 psig .
i
MADE
Introducing Checkers
Strobe Beacon Lights
MUD&FRAC
Opens at a precise set point ,
retracting the piston to its
shelter in milliseconds.
difficulties when anticipated local content laws, similar to

those in place in Saudi Arabia, come into action further
down the line.
dectnalics are
potted m epoxyw hich
pome a
Anulorre M
and
water, thelesdlng
cause of shorts
Ilgh officlency powe r
supplymbifzese
*ee
. ..
ande
..
.lnoire
Meets SAE J845 class 1.11 and III requirements
MountsINPTPi peMountor Mag netic Mountw hh10ft.powercardandli ghterplug

Internal and external ptogrannmable fun ctions
Uhra-bdght Double, Ouad . PentaFlaeh or HexaFheh modes
Reverse polarity t*Gdtboard protection
Operatingtempanahre-40 F to 140 F
r t ; r a = 405.789.1884
FAx 405. ;
8230 SW. 8TH ST.
Oklahoma City, OK / 3 8
To view our full line of safety lights, visit
www.checkersindustrial.com or call 1-800-438-9336

59
LAND
SEISMIC
Low-impact seismic acquisition

illuminates oil shale
A man-portable weight-drop system proved useful in daunting topography.
Michael Costello, A.J. Cozzens, Konstantin Kudin,

Jeff Mestayer, and Katia Pronina, Shell Oil
he geophysical community is adjusting to new conditions in onshore geophysical operations inlcuding a

larger share of unconventional resource targets, higher
resolution requirements, more environmental sensitivity
in operations, continued improvement in health and
safety, and ever-increasing cost challenges. Shell Oils
seismic acquisition method for Piceance basin oil shale
targets was developed with these challenges in mind.
The Piceance basin, which sits in a rugged, mountainous area of northwestern Colorado, has the richest oil
shale deposits in the world, with more than 2 Bbbl in
place per square mile in the central basin area. In the
central portion of the basin, the oil shale beds contain
nahcolite, a form of evaporite. This deposit is important
to characterize because it can impact fluid flow and
energy efficiency. Shell scientists felt seismic could offer
a tool for nahcolite delineation.
The study area in the Piceance basin sits in an area
of limited 2-D seismic coverage. The team opted to
shoot a limited high-resolution 2-D pilot survey to
ascertain seismic feasibility. Results demonstrated
significant upgrade in data quality and clear ability
to pick nahcolite boundaries.
With the value of high-resolution seismic proven, the
team initiated an effort to create a practical means of
acquiring high-resolution cross-country 3-D seismic since
high-resolution deep-hole acquisition was prohibitively
expensive. Data obtained in the pilot acquisition indicated
potential utility for a lower energy source.
pipe has a pulley through which a rope pulls a 25-lb weight.

The operator pulls the weight to the top and lets it fall to a
baseplate at the bottom.
The system, operated by a three- or four-man crew, is
completely portable. Each end of the device is carried by a
crew member while the baseplate is carried by a third crew
member.
Key elements of the device are that the weight falls from
the same height every time (regardless of operator) and
that the use of a pulley allows the operator to stand upright
and comfortably raise the weight with minimal back stress.
The weight is not exposed at any time except for a couple
of inches at the bottom of the PVC pipe, so it is very safe,
especially when compared to operating dynamite drillholes delivered by helicopter. Also, outside of the imprint
of the baseplate, there is no environmental impact it is
readily permitted.
This is a difficult task when considering conventional
cabled systems. However, cableless devices provide a
means to lower the weight per receiver enough to render
walk-in delivery possible. Calculations and initial tests indicated the combination of man-portable weight-drop/
Weight-drop system
After studying numerous low-impact sources, the team
landed on the idea of a man-portable weight-drop system.
While weight drops are an old concept, it is actually a challenge to design light-weight, portable, and safe weight-drop
devices. After many iterations, a significant number of
improvements were incorporated into designs. In the latest
designs, the device is a 3-m to 3.6-m (10-ft to 12-ft) PVC
pipe mounted on a standing frame. The top of the PVC
60
The full weight-drop device weighs 70 lb. (Images courtesy of

Shell Oil)
PRECISION GEOPHYSICAL, INC.
All ,
!to
'71
I
4
C.
--
I
II
t
,
31
ounces the purchase of
ve Hemi-44 model vibrators
for your cross country or roa
Designed for high quality geop hysica l prospecting,
these vibrators offer broad band output and a high
signal to noise ratio for the deepest surveys.

l-_J
3
CDQ0
1
1
.1.
.
T1r
_Jr
State of the Art Phase and Force Control.
Linear, Non-Linear and Custom Sweep capabilities.
Post Sweep Report - Quality Control report at the end

of the sweep. Includes Phase Error, Force Output, GPS
00
ti
and other QC information.
PRECISION GEOPHYSICAL INC 2695 SR 83 SOUTH MILLERSBURG ,OH 44654
PHONE 330 -674 - 2198 SMCCROSSINCaAOL.COM
LAND
SEISMIC
The weight-drop test line is compared to nearby

vibe high-resolution lines.
cableless recording was not only feasible but

also inexpensive enough to enable high-resolution 3-D acquisition. The team decided to
conduct another field test.
Mobilization showed the many advantages
of the weight-drop/cableless combination. No
instrument truck, helicopter, or jug trucks
were required. The weight-drop devices were
constructed locally. The cableless boxes
arrived via two pallets delivered by UPS. The crew was
small, only 33 men (which included a full complement
of HSE oversight), and all transportation of boxes and
manpower was in vans or small trucks.
The entire operation took six days including mobilization/de-mobilization, HSE training, geophone deployment, and recording. Deployment of the geophones and
boxes was smooth since the equipment was light enough
to carry in via backpack despite treks up and down steep
inclines. Antennae relays for communication of GPS timing signals to the boxes were reliable across the entire line.
No change of batteries for receiver boxes was required
during the operation.
The weight drop operation was initially slow, but production steadily increased with a maximum of more than
700 source points in one day. This figure was obtained by
using four simultaneous weight-drop acquisition teams.
HSE evaluation indicated this operation was safer than
similar operations of standard crews. The combination of
cross-country hiking and weight-drop operation at high
elevations did not over-exert the crew. There were no
recordable injuries. The test provided encouragement that
low-impact acquisition could be performed at low cost and
at low HSE exposure relative to traditional methods.
For processing,
the very high spatial sampling provided superior results for refraction statics, linear noise removal, and migration. Data obtained via
this type of acquisition at oil shale depths are nearly as
high-quality as those obtained via stronger sources.
Given results from the initial tests, a follow-up experiment at Shells Freezewall pilot was undertaken. This was a
tomographic experiment to evaluate properties in the
vicinity of the freezewall. The weight-drop source was
deployed at a very fine scale at the surface and recorded
into several downhole geophone deployments. The experiment was a success in measuring tomographic arrival
times and obtained observable changes in rock velocity
under the process of freezing. This experiment could not
have been performed with dynamite or vibroseis in the
very tight confines of the operational environment.
Finished processing exhibits oil shale data quality comparable with viobroseis acquisition. However, it must be
stressed that the weight-drop system is a weak source.
Under no circumstances will the data quality data exceed
that of stronger sources with identical acquisition geometries. For now, a decision to use a weight-drop/cableless
system should be based on trade-offs in data quality for
lowered cost, lowered safety risk, and lower permit restrictions. This trade-off is compelling for shallow objectives
such as oil shale.
Acknowledgements
Key support and contributions were made by Shell geophysicists Jorge
Lopez and Patsy Jorgensen. The authors wish to thank primary contractor RII under direction of Harold Merry and Jim Roy for continued assistance in development of the man-portable source. Other
suppliers also were instrumental to results, including Ascend-Geo
and Oyo-Geospace. This paper is based on a presentation given at
the 2011 Society of Exploration Geophysicists annual meeting and
has been reprinted with permission from the authors.
The ultradense freezewall tomography test was able to observe
changes in rock velocity during freezing.
62
r '
4%
,
-"
+,
a.'
fr
A `t
iw
.
1
' _y
1
6
00
ION is driven to solve the toughest problems in unconventional reservoirs. For one operator
t.
looking to optimize well locations in the Niobrara, ION conducted a new wide azimuth
seismic survey combining ION's expert survey design and planning, data acquisition , and
advanced data processing from GX Technology. As a result, the client was able to quickly
and efficiently locate and complete three new horizontal wells, achieving a 5-10x increase
AREAS OF EXPERTISE
- Unconventional Reservoirs
Challenging Environments
Complex Geologies
in productivity relative to previous wells in the area. Look to ION for unique innovations
Basin Exploration
that help you maximize ROI on your unconventional reservoir investments.
Reservoir Exploitation
,
.
( n
CHARGED TO INNOVATE. DRIVEN TO SOLVE.'"
LAND
SEISMIC
Land technology
surpasses expectations
New acquisition system handles harsh environments.
Binu Joy and Tim Hladik, INOVA
eophysical service providers rely heavily on equipment manufacturers for integrated solutions that can
support the smallest 2-D projects to the largest, most complex 3-D high-productivity Vibroseis (HPVS) operations.
BGP, a subsidiary of China National Petroleum Co. (CNPC)
and the worlds largest land seismic contractor, continually
seeks cutting-edge seismic technology to maintain its competitive edge for providing high-quality data acquisition
services. BGPs numerous seismic crews operate across the
globe in all types of challenging terrains and extreme
weather conditions and require a stable, easy-to-use recording system that can perform in tough seismic programs.
Nearly two years ago INOVA Geophysical was launched
as a new entrant in the land seismic equipment market.
A strong working relationship between BGP and INOVA
has combined operational excellence with technological
innovations to develop advanced products to meet the
growing demands of the seismic industry. In addition,
BGP evaluates INOVAs new equipment and conducts
extensive field tests to make sure the products meet its
standards of excellence before making an investment in
new seismic systems.
In 2011, BGP Domestic agreed to test INOVAs new
G3i cable-based acquisition system in the Turpan-Hami
(Tuha) basin in the eastern part of the Xinjiang Uygur
Autonomous Region in China. The Tuha basin is the
G3i components are crafted from stainless steel, aircraftgrade aluminum, and high-strength polycarbonates.
(Image courtesy of INOVA)
combination of the Turpan Depression and the Hami

Depression and covers an area of more than 53,000 sq km
(20,460 sq miles), with estimated natural gas volumes of
266 Bcm and oil volumes of 2.5 billion tons. BGP has
been surveying the Tuha Oilfield for several years as one
of CNPCs key exploration programs. Because field operations were already in process in the region and due to the
BGP crews familiarity with the arid desert environment,
the contractor thought the oil field was an ideal location
to extensively test the system.
The system
With its ruggedized ground electronics manufactured
from high-strength polycarbonates, aircraft-grade aluminum, and stainless steel, the G3i system easily can
operate in harsh environments. Power-down-the-line technology eliminates the need for large quantities of batteries
and provides seismic crews a significant reduction in the
amount of ground equipment required. Using fiber-optic
baselines, the system delivers more than 100,000 channels
in real time.
The G3i systems architecture consists of a single software platform supported on multiple central recording
system options for optimal operational flexibility. Its
box-cable-box architecture also allows operators to easily
locate and resolve field faults. In the event of a remote
acquisition module, fiber tap unit, or power supply unit
failure, trained crew technicians with proper equipment
can repair the unit. Furthermore, the integration of
INOVAs Vib Pro source controllers and Connex Vib
navigation system with G3i provides greater efficiency
during HPVS operations. Advanced Vibroseis techniques have been widely accepted by energy companies
for achieving densely sampled, high-quality data acquisition more cost-effectively.
Results
BGP planned to deploy approximately 5,000 channels
to administer two separate tests, the first beginning in
November 2011 and the second in February 2012. With
a stringent test plan in place and new G3i equipment,
INOVA was well positioned to start the joint field test program. Since the BGP crew was unfamiliar with the G3i
64
IvT
'Th
Ii
DEVELOPING UNCONVENTIONAL GA
ovember 1
avid L. Lawre
J5
Conve m.=';,; jI
www.dugeast.com
:i
LAND
SEISMIC
quickly mobilized the crew to begin field trials in the

Tuha Oilfield. By mid-November 2011, the system was
fully deployed in the field. A complete set of monthly
tests were run on all channels and geophones, and communication was established between the G3i system and
BGPs vibrators. With 501 stations on a 2-D line, the crew
acquired more than 1,100 records using
both dynamite and Vibroseis sources.
After the 2-D recording was finished,
the crew moved onto 3-D testing. More
:
!
r
E C
than 3,600 shots were recorded using
the 3-D spread, which consisted of 20
lines of 195 active stations. During this
phase of the testing, the crew also conducted tests on real-time receiver line
channel capacities using several different sample rates.
After successful completion of these
y
_
"w
Kam.
- - ` `W
OO
tests, BGP picked up all line equipment, demobilized its personnel,
processed the recorded data, and made
recommendations for G3i system
enhancements, which are currently
being implemented by INOVA.
In February 2012, INOVA released a
G3i software update to support HPVS
techniques and many of BGPs sug- 77.
gested enhancements. BGP crews
returned to the Tuha Oilfield to conduct the next field test, focusing on
HPVS methods. The tests included slipsweep, two-cluster and three-cluster distance separated simultaneous sweeping
Results match core analysis for Spraberry Woffcamp play
(DSSS), and DSSS with slip-sweep
(DSSSS) using the 5,000-channel G3i
system, Vib Pro source controller, and
Connex Vib navigation system. Five sepUnderstand complex mineralogy in shale reservoirs, and better determine
arate slip-sweep tests were undertaken,
zones prone to fracture stimulation Easy to learn and use , PowerLog rapidly
ranging from 6-second to 28-second
loads massive volumes of data while delivering game-changing levels of
sweep times with 5-second to 6-second
listen times and 5-second to 10-second
collaboration: multi-well, multi-user and multi-interpreter. Engineers,
slip times. Two-cluster and three-cluster
geologists , and petrophysicists work together for better drilling decisions.
DSSS and DSSSS operations of 12-second sweep time, 5-second listen time,
and 10-second to 12-second slip time
were tested using cluster distances from
D o w n l o a d the c a s e stud y w w w . f u g r o -jason . c o m / s p r a b e r r y
10 km to 25 km (6 miles to 15 miles)
with dynamic fleet grouping capabili-I
ii
www.fugro - joson .com
FUGRD
ties. Active patches within the superinfo@fugro - joson .com
JASON V
patch were separated and successfully
correlated during slip-sweep tests.
system, INOVA field service engineers provided onsite
technical training to their field support technicians,
observers, and field crews to properly execute the tests.
Upon receiving the G3i system, BGP engineers completed floor commissioning of the equipment without
issues in just a few days at their Zhuozhou facility and
;
f , PI
66
LAND
SEISMIC
Collaboration
pays benefits
This joint collaboration and successful
testing of the G3i system benefited both
companies. BGP engineers were pleased
with the results of the
field tests and acknowlG3i has been rigorously tested around the world in regions such as Canada and China to assure high-quality edged the performance of INOVAs G3i
data acquisition. (Image courtesy of INOVA and BGP)
system. After completing the tests, the company formally accepted G3i and
While performing aggressive slip-sweep with 28-second
purchased 10,000 additional channels for its upcoming
sweep time, 5-second listen time, and 5-second slip time,
seismic projects in Western China later this year. Having
the G3i central system handled multiple overlapping
INOVAs high-performance G3i acquisition system as
shots without computing delays. In all, BGP executed
part of its equipment portfolio offers BGP an advantage
more than 22,000 vibrator points and achieved 100% effiin winning project bids from global oil and gas explociency levels during the HPVS tests since there were no
ration companies.
delays in vibrator starts or file output between vibe starts.
Discovery Acquisition Services
mwaaw mgwj
t
wMMk4-W - zm
Seime Pemt ing
1
0
.... ..r
discoveryacquisition.com
4141 Katy Hockley Road. Katy, TX 77493, USA. Phone: +1.281.371 .2700 - Fax: +1.281 .371.2744
67
MWD/LWD
New sonic tool matches

wireline data quality
A LWD program using sonic tools provides a South American operator
with high-quality data with real-time access.
Mohamed Diab, Weatherford
s the industry moves into more complex reservoirs,

real-time access to downhole data becomes even
more critical to successful well placement for maximum
recovery. Increasingly, operators rely on data from LWD
tools in general and specifically on sonic tools to identify
sweet spots, optimize wellbore placement, and plan the
fracing and stimulation programs.
Lately, scientific advances and improved processing
techniques help provide higher data quality than before.
The challenges get tougher as the reservoirs grow more
complex.
Acoustic measurements, typically obtained from LWD
sonic tools, can provide seismic/time-depth correlation,
pore pressure prediction, formation porosity, and determination of formation mechanical properties. Compressional velocity and shear velocity of the formation are the
two basic measurements from which the rock mechanical
properties are computed. However, there are two factors
that limit the quality of these measurements.
First, propagation of sound waves from the transmitter
directly through the tool body (such as the drill collar) to
the receiver can cause significant distortion to the acoustic
signal. Since the speed of sound is typically faster in steel
than in the earths formation, it is critical to isolate and
remove these distortions from a downhole computed
sonic signal.
Compared to wireline tools, LWD tools have rigid collars
that help them survive the harsh drilling environment
(shocks, vibrations, and weight on bit). Wireline tools do
not have the same problem since these are run after
drilling and are made with slotted, rubber-filled housings
that isolate the tool body noise.
Second, acoustic interference from the drilling environment such as downhole drilling noise during LWD operations adds to the signal distortion.
Designing for improved quality data

Uncovering the secrets of the rocks while drilling is a
major challenge. More and more tools are being devel68
oped to unlock the rock properties, turning the reservoir

inside out.
Signal-to-noise ratio is the key to acquiring continuous
and clean acoustic signals back to the receivers and overcoming the noisy drilling environment.
Weatherfords transmitter design was built to maximize
the acoustic wave power as well as focus the wave into the
formation (Figure 1). It has very high output power that
reaches up to 6 kilopascals while firing.
FIGURE 1. With the ShockWave Sonic Tool, the transmitter is at the

bottom of the tool and generates the acoustic waves (black). These
waves then generate head waves (yellow) in the mud column,
which are detected by the receivers (yellow buttons at the top of
the tool). (Images courtesy of Weatherford International Ltd.)
On the receiver side, the array was designed to be

very sensitive to acoustic waves coming from the formation and insensitive to acoustic energy traveling through
the collar.
Along with a highly efficient attenuator section that
isolates the receivers from as much drilling and collar
noise as possible, these factors helped in getting a clean
semblance projection as well as a strong first arrival.
MTI
SOONER ENERGY SERVICES
FLOTEK
RO ALVE
,.
CAVO
CESI CHEMICAL
(_
FLOTEK
FL
TELEDRIFT
WANNA KNOW
I
WHERE YOUR WELL
IS T O N I G H T ?
SPID.E TUR6 ECO
GALLEONTURSECO
TELEDRIFT
PROSAT
Teledrift 's remote monitoring and
certification website for unmanned MWD

IU Sal sy stu ' l i l p l u 1 do s i n d V l du a Situ
jr -
Log on to Reg io n
autonomy , data integrity and added safety

and convenience for our customers
Mobile A pp Available
on Smart Phones
Active Jobs
Job Detail
True Vertical Depth Reports
PROSERIES
Survey Certification
- MWD T O O L S
PROSHOT (Azimuth & Inclination)

ff
Inc Inat ic, n Ira n
Az` mu ` h o7
ulr- lte t--,l
cJ ., , ,.-.
/- 0. 1
deylees
1 de c'e e
PRODRIFT (Inclination Onl y)

lndiriu ti c ri IcrJ oe G 2 1 :5 ce ,t ees
PROVIEW SURFACE SYSTEM

Surveys telemetered sent in 3-4 minutes and
automaticall y decoded by the surface recorder
Survey data is digitall y disp layed , the driller
simp ly enters the bit depth to store the survey
Built in system checks means no
false survey d a t a
For more information contact : teledrift _sales @flotekind .com or call 713-360-DRIL (3745) www.flotekind.com
MWD/LWD
Processing the data
These rock properties give a clear vision of the behavThe tool processes the different waveforms from the varior of the formations in the reservoir, allowing the geolious receivers downhole while drilling and saves them to
ogist and the geophysicist to complete their modeled
the tool memory, which is later retrieved with the drill
picture on the behavior of the rocks to outside and
string and delivered to the operator. This gives a comlocalized stresses. These data also help in quantifying
plete picture of the waves and how coherent these are to
the production plan for the entire cluster to start with
each other, which is called semblance.
and the whole field at the end.
As shown in Figure 2, the far right
track (coherence track) is the semblance variable density log (VDL). The
coherent arrivals are then processed by
the engineer generating the compressional slowness curve (DTC) and the
shear slowness curve (DTS), which are
plotted in white on top of the coherence image.
The VDL is a 3-D chart of slowness in
microseconds per foot versus depth,
which, together with the color intensity,
shows the coherence percentage.
On the other hand, the tool firmware
compresses the semblance image for
efficient real-time transmission to the
surface even with the limited bandwidth
of the LWD mud-pulse telemetry. The
surface software then decompresses the
dataset and enhances the contrast in the FIGURE 2. A generic example showing the semblance VDL (dark blue column on the far
right) together with the DTC and DTS slowness curves traced in white (DTC left on black
image, providing an output of a realtime semblance VDL log that is reliable and red and DTS right on black and red).
and continuous.
The operator used the Youngs modulus values to calcuThe field engineers use the high-quality VDL data
late the load-versus-strain relationship, the overburden
along with the software interactive tools to generate the
pressure, and the force the rocks exert under specific
coherence arrivals and compressional and shear slowstrain in that particular reservoir. Knowing the localized
ness curves. Important formation properties such as
stresses of the sweet spot facilitates the modeling of the
porosity, pore pressure, and rock mechanical properties
frac jobs and thus optimizes the production planning for
can then be computed from the measured DTC and
the entire field. And the operator used Poissons ratio and
DTS values.
shear modulus as stiffness measurements to determine the
South American well measurements
horsepower needed to frac the reservoir rock.
An operating company in South America was drilling in
All these rock characteristics provide a clearer picture to
a new area and needed to improve its reservoir knowlthe reservoir engineers and the geologists on how the
edge and geomechanical field information. The comrock will behave under different conditions, and many
pany decided to use the Weatherford ShockWave sonic
results can be obtained from them. These data aid in
tool to obtain this information for every first well in
proper reservoir analysis and modeling as well as future
each cluster of wells.
planning of new wells.
The properties of the formation required in this particThe South American operators results included
ular case included Youngs modulus (E), Poissons ratio
improved production planning for the new field and
(), bulk modulus (K), and shear modulus (G). These
also optimization of its reservoir model. The company
would provide a better production evaluation picture and
was able to cut the number of wireline trips by using
also help evaluate the formation mechanical strength to
the sonic LWD tool and get rock mechanical data
guide the production planning of the entire field.
while drilling.
70
350+ EXHIBITORS AT THE 201 1 EVENT
ITITIWA I0I I 1l ii i __A 011

DEVELOPING U N C O N V E N T I O N A L S
October 14 - 16, 2012
Henry B. Gonzales Convention Center

San Antonio, TX
C-A4L5 FDR T
Expanding
David E. Roberts, Jr.
the AGLE FORE
EVP and COO
Marathon Oil Corp
The Eag le Ford shale is rapidl y moving into the top tier of U.S. shale
plays, propelled by excellent well results across its dry gas, rich gas
and oil-prone areas. Now, the Pearsall shale play is growing in south
Texas which expands the region 's activities. The Eag le Ford also is
spreading out to the Olmos and Escondido , primarily fractured
through sandstone and the Austin Chalk .
Timothy L. Dove
President and COO

Pioneer Natural Resources
do 141
l
rq
Bruce H. Vincent
President
1
1i
Swift Energy
The 2012 DUG'" Eagle Ford Conference & Exhibition will focus on
the expanding Pearsall shale play and delve into both the sandstone
and chalk developments.
Whether you are looking to make new business connections , or learn

what operators are doing to protect and develop their investments ,
DUG Eagle Ford is THE conference you cannot afford to miss .
"'I
John D. Cla yton

SVP, Asset Development
Rosetta Resources Inc
Plan to attend, exhibit and sponsor this year ' s event !
For more information go to
PREMIER
i
PREMIUM
HALLIBURTON
RAOON
A icro c_: SInIC
A drilling
P4NALCO
Mme.
SEALS 1
i .. iI
So
i . .:..6
g ;usI'ntj is
ChesaoeT
ike
CT R I
INTER NAT IONAL
1
PE K C :H L R U N
/ / SELECT
FLEXSTEEL
A*
A1
RS
TARGET LOGISTICS
PRESENTED BY:
HA R T E N E RGY
HOSTED BY:
EEP
IV
Or,
Schlumberier " 41'

ERRAN UniversalPeoasus
-'
FuQFHSTLR&LO " 'e.a y
9"" '*;aNuTb&
SILVER
O EXPRO
BRONZE
4l
GOLD
NSAfl s
- PLATINUM
F, As
BAKER
HUGHES
ENCAi INVES 1MEN7S L.P.
SUPERIOR = Terlaris
'
j jl
MOLT
NEWARK
Y DRILLINGFLUIDS
SPONSOR S
I
, Stallion
TEAM
Statoil
NATIONAL
OILWELL Y
VARCO VALERUS
CBT
E31GL Frr
FTS
FI FlC- CMEM
Vm
Champ{
U s steel
Tuhiar Products
7 OIL&GASCENT R
InVeStOr LU
Weatherlord
MIDSTREAM
.RcM
MWD/LWD
Logging the Martian oil well

If a system can be automated to work in outer space,
it can certainly save time and money on this planet.
Steve Krase, Navigate Energy Services
robotics. It also was assumed that most of the drilling

industry would agree that this is a feasible concept.
Therefore, it was hard to understand why there was so
much consternation and gnashing of teeth when it was
suggested that a well be drilled three hours outside of
Houston without an MWD operator, directional driller,
or drilling crew on location. By examining this challenge it became obvious that there truly were no technical barriers, only emotional and cultural barriers to
overcome to achieve the goal of remote directional
drilling and eventual complete drilling automation.
his article is not about drilling an oil well on the

planet Mars. It is the description of a process by
which an MWD system that enables remote directional
drilling and helps achieve drilling automation starting
with the elimination of the MWD operators was successfully designed and commercialized. Engineers felt that if
they could design a system for interplanetary exploration, it would translate well to implementing the
remote directional drilling and drilling automation
The impossible can become a requirement
efforts on Earth.
What was required of an MWD system in 1982 is quite
Using the example of a Martian drilling project,
different than what is required in 2012. In 1982, the
an MWD system that eliminates the need for an
industry was drilling vertical wells and simple direcMWD operator was successfully designed. The system
tional wells with long tangent sections targeting clastic
enables remote directional drilling and interfaces to
or carbonate reservoirs using rotary assemblies. In
control systems required for full drilling automation.
1982, replacing wireline logs with LWD logs was considThese engineers felt that MWD operators add zero
value to the drilling process, especially when the
drilling process is being controlled remotely or
automatically.
This idea required a few assumptions. First, it had
to be assumed that the equipment could be transported to Mars and that the engineers had the technology and know-how to drill the well. The next
question was how
would this drilling
operation be staffed?
Would there be a day
and night company
man, tool pusher,
directional drillers,
mud loggers, MWD
operators, drillers,
and roughnecks? The
answer to this question is obviously no.
It would be likely and
entirely possible that
everything would be
done remotely and
The NES unmanned MWD system is shown in an automated drilling environment. (Image courtesy of Naviautomatically using
gate Energy)
control systems and
72
FROI ][If
CROUP. IN
ELLJ ft I
gqy[
Committed to t
kken
J4
7
Wellheads Frac Tree Rentals Hot Oil

Slickline /Wireline Hydro-testing
'1
I
Frontier We llhead , founded
in Wat-
ford City, ND, has earned a reputation
for providing reliable oilfield services in

the Williston Basin. Since 1986, skilled
crews have helped many exploration &
production companies unlock the full
potential of their oil & gas wells. Call
Frontier 's local experienced team to
help you get the most out of your well.
(701) 842-4248
Williston , ND (3)
Watford City, ND
Dickinson , ND
Wray, CO
www.feg.ne
Sidney, MT
Grand Junction , CO
Sterling , CO (3)
Vernal , UT
Greeley, CO
Whitewater, CO
MWD/LWD
ered ridiculous and was met with the same skepticism

unmanned operations are met with today. However,
triple-combo LWD systems went from being impossible
in 1982 to being an absolute requirement by 1989. Fastforward to 2012, and the industry now is drilling
R3 O
ENVIRONMEN TAL
SOLU T ION S
mostly horizontal wells with build rates greater than

12/100 ft that target shales and other poor excuses
for reservoir rock with steerable motors or rotary
steerable systems (RSS). The data and subsequently
the MWD systems required to drill wells in 2012 are
much different than what was
required in 1989, and arguably
the primary requirement of an
MWD system has shifted away
from formation evaluation toward
improved drilling efficiency, accurate wellbore placement, and
drilling automation. This has been
a rapid change, and subsequently
most of todays MWD systems have
not kept up. It is time to step back
and have a look at the new reality
and what it means to MWD system
requirements.
NES unmanned MWD system
y.r
r
s
'T'
More locations. More services. More peace of mind .

Nobody delivers All Around Reliability '" to the
f i e l d like R360 Environmental Solutions.
+ Total Water Recycling

+ Closed Loop Systems
+ Land Treatment Process
+ Land Waste Disposal
+ Oil Reclamation
+ R3 RoadBase
+ Washouts
As the nation 's leading provider of oilfield waste management

solutions , R360 offers superior access to strategica ll y located
facilities across the country. Because when it comes to
environmental solutions , yo u need a provider you can count on .
Learn mo re at r 36 0 e n v i r o n m e n t a t s o l u t i o n s .com .
74
tYk
",.
There are two main components to

any MWD system: the downhole tool
and the surface system. The NES system comprises a pre-assembled battery-powered MWD tool. The MWD
tool has approximately six weeks of
battery life. The tool is currently
capable of providing gamma and
directional measurements and is
being expanded to provide additional measurements.
The surface system consists of one
certified computer that also doubles
as the drillers display if required.
To support remote operations and
automation, the MWD system must
provide the data in the appropriate
format.
MWD tool. What happens when
there are problems? The answer is
that there is nothing anyone can do
with a failed MWD tool that is still in
the ground. The challenge is determining if the tool has really failed or
if there are rig conditions that are
causing the issue. The troubleshooting process can be handled remotely
by experts who have access to the
same data that they would normally
have at the well site.
MWD/LWD
Surface systems. An MWD surface system has two basic

requirements; data decoding and data display/transmission. Most MWD surface systems to date have been
designed assuming there will be at least one MWD
operator on location at all times. The prime directive
for the NES surface system was that there were no people and there is only one computer.
Data decoding. Accurate and reliable decoding of the
data transmitted from the MWD tool is an absolute
requirement. Although different conditions can require
different filters/settings, this is solved with an automated, intelligent decoding system programmed to handle different situations. As long as all data required for
troubleshooting are available, there is no need to have
anyone at the rig, especially if remote control of the top
drive and pumps is available.
Data display and transmission. The MWD data must be
made available to the other systems and people that
need it in a format that is usable. The NES surface system receives drilling data from the electronic drilling
recorder and, serving as an aggregator, makes the data

available wirelessly via local area network and also via
the Internet using Cloud storage. The aggregated data
can then be used for controlling the top drive, managed-pressure drilling, and RSS automatically or via
human-machine interface at the remote operations center. For simple remote viewing, users have access to the
data anywhere with Internet access.
Surface system hardware requirements. Most existing
MWD systems have been designed assuming there will
be an MWD operator to rig up and test the system; this
makes it easy for designers to add hardware and complexity. The assumption that there are no personnel
available forces a simplified hardware design.
By using the concept of drilling on Mars, an MWD system was successfully designed that adds to the vision of
complete automation. There have been many recent
advances in drilling automation, particularly with regard
to top drive and RSS, and an MWD system must be
designed with these advances in mind.
Structural Steel
9MT= MI
c-v
t1
9G1
/j ib
f
'.
O i=
_,
Since 1945 TruoNorlh Steel has been a trusted steel provider across the U.S. With a
team of engineers, delailers and project managers on staff, we provide complete,
turnkey solutions for each project - from concept to completed contract.
Tru a rlor t h St eel

1-866-982-9511 I TrueNorlhSteel.co m
75
PRODUCTION
LOGGING
System provides
flow profiling on demand
New DAS, DTS measurements provide better reservoir illumination.
Sudhendu Kashikar; Silixa
along the entire length of the well. The acquired data can
be used for production optimization with detail that
would be not possible using conventional point sensors.
s energy demands increase rapidly, the goal of energy

Fiber-optic distributed sensors
companies is to maximize ultimate recovery in an
The operating principle for distributed sensors is illuseconomically sound manner. One critical capability is the
trated in Figure 1. A pulse of light travels down an optical
accurate measurement and monitoring of production
fiber. A small amount of the light is naturally scattered in
from individual layers/perforated intervals in a multizone
the fiber and returns to the sensor unit. An optoelectroncompletion. These data allow operators to optimize zonal
ics architecture measures the modulation of the backscatproduction, improve recovery, increase production per
tered light. An acoustic field around the fiber exerts tiny
well, and reduce overall lifting costs.
pressure/strain changes onto the fiber. The sensor measBut in spite of its importance, downhole flow metering
ures these pressure changes at a rate of up to several KHz
is not widely used, particularly in highly deviated and horiand can be used to measure the acoustic field.
zontal wells. This stems from the high intervention costs
The system digitally records both the amplitude and
of workover and coiled-tubing operations as well as practiphase of the acoustic fields,listening to every point along
cal technology limitations, including difficulty in logging
the fiber. The system can offer 1-m (3-ft) spatial resolution
highly deviated wells and uncertainties with conventional
with a dynamic range of more than 90 decibels and with
production logging tools.
no cross-talk.
Distributed fiber-optic sensing technology offers a soluTo enable the use of the system, a number of fast signal
tion for downhole production monitoring and reservoir
processing techniques using coherent phase array processmonitoring by overcoming the cost and technology chaling have been developed that allow analysis of the acoustic
lenges encountered with traditional point sensors. Silixas
signal along the entire length of fiber and identify flow
Intelligent Distributed Acoustic Sensor (iDAS) and
ULTIMA Distributed Temperature Sensor
(DTS) facilitate an opportunity for operating
companies to obtain permanent, continuous
downhole flow metering. By comprehensively
understanding the technical and business
implications of implementing permanent monitoring using these sensors, operators can thoroughly evaluate the value added by introducing
this new technology to their completions.
For single-point sensors such as downhole
pressure/temperature gauges and flow meters,
it is necessary to predetermine where in the
well the sensors are to be installed. One of the
advantages of distributed sensing is the ability
to take measurements at any point along the
fiber, thereby negating the need for irreversible precompletion sensor placement. The
emergence of DAS, and the principle of the
FIGURE 1. The iDAS provides digital acoustic measurements along the entire
fiber being the sensor, opens a new potential:
length of single-mode fiber. (Images courtesy of Silixa)
the ability to capture well and reservoir data
76
characteristics along the well bore. In addition, the propagation of the acoustic energy along the well bore can be
analyzed in space-frequency domain to determine the
speed of sound and measure the fluid composition and
velocity.
Field testing
To test the system, field surveys were conducted on several
wells offshore Norway. These multizone completions featured existing fiber installations for downhole permanent
FIGURE 2. The data array processing shows the ridge corresponpressure and temperature gauges. Acoustic measurements
ding to the acoustic waves propagating through the fluid.
were made along the preexisiting surface and downhole
fiber infrastructure. During this trial, the existing downhole sensors were disconnected from their topside instrupling. The determined flow speed varies with depth in the
mentation. Neither a dedicated installation of fiber nor
well, corresponding to the change in hydrostatic pressure
any optimization of the cable construction or connectors
for a section of tubing with a uniform inner dimension
was performed. The surveys in this study all were perand a gradually sloped well trajectory. The instantaneous
formed on single-mode fibers.
and locally determined flow is roughly within +/- 0.3
The system measured the phase of the acoustic signal
m/sec (1 ft/sec) [that for this well is 10%] of the actual
coherently along the fiber-optic cable. Therefore, it was
flow speed.
possible to use a variety of methods to identify the presFuture diagnostics
ence of propagating acoustic waves. Digital signal processAs demonstrated, the iDAS can detect the acoustic field
ing helped transform the time and space data into a
in the variety of oil wells surveyed and use its ability to
diagram showing frequency and wavenumber in the spacecapture the true acoustic field to enable detailed analysis
frequency domain. Frequency-independent propagation
of the acoustic signal. There is a sufficient signal to allow
caused a line in that domain.
further processing of the recorded acoustic field. The
Figure 2 shows the time and space signal and the corredemonstration of clear dispersion diagrams demonstrates
sponding space-frequency domain space. Using the lower
both the quality of the recorded signal and the presence
figure, the speed of sound can be calculated. The freof propagating acoustic signals that can be used to quanquency band over which the speed of sound can be detertify distributed composition and flow velocity along the
mined is more than sufficient for compositional and flow
well bore. The signal quality also holds potential for develcharacterization. With the system, the speed of sound can
oping other diagnostics techniques in the future.
be evaluated over a large section of the well and, therefore,
can measure the distributed variations of the flow
composition and characteristics along the well.
The technique is particularly powerful for
determining the fluid composition of the flow.
For example, gas has a speed of sound of around
600 m/sec (1,987 ft/sec), whereas water has a
speed of sound around 1,500 m/sec (4,920
ft/sec). This analysis is facilitated by the systems
ability to determine the full acoustic signal
(amplitude, frequency, and phase).
The two lines in the first and third quadrants
correspond to the speed of sound traveling up
and down the well. These two lines can be analyzed to reveal the Doppler-shifted sound speeds
for upward and downward propagating sound
within the fluid of interest. Figure 3 shows the disFIGURE 3. The Doppler shift between the upgoing and downgoing speed of
tributed flow determined in a gas injector based
sound provides fluid velocity measurements.
on Doppler shift measurements for a 30-sec samEPmag.com | July 2012
77
PRODUCTION
LOGGING
HP/HT logging
challenges equipment
E&P activity increasingly involves operations in HP/HT downhole conditions. Engineers are
developing advanced designs and are using new materials to address these challenges.
Joseph Edone, Scientific Drilling International
he number of HP/HT wells is increasing in many

areas of the world, including the North Sea, the
Gulf of Mexico, and Southeast Asia. Several factors are
responsible for driving the search for hydrocarbons in
these hostile environments. Existing fields are becoming
depleted, and easier targets are scarce. The high pressure means that relatively more hydrocarbon is contained in these fields compared with normally pressured
fields. Moreover, as long as the fields are large enough,
they make commercially attractive targets even with the
technical difficulties.
Tool improvements
Application of hybrid circuitry (hc) in tools has
expanded temperature limits. The circuits use ceramic
substrate instead of typical polyimide materials. Each
company using this technology has created proprietary
methods of attachment for individual components.
Hybrid circuits are used in the quartz-based pressure
transducer for very high accuracy and reliability.
Typically, companies put conventional logging tool electronics in Dewar flasks. This helped meet the early challenges of HP/HT environments. As logging expands into
more extreme environments that push beyond the safe
operating envelope achieved with flasks, new technology
is needed to meet the ever increasing demands.
New developments in elastomer technology have
allowed operations up to 321C (610F). Parfluor Ultra
material (PTFE) is used exclusively for these temperatures. The use of metal seal technology has expanded
this upper limit to more than 427C (800F) for limited
times downhole.
Qualification
Special qualification is needed on all components and
modules used in the production logging string. Heat qualification is needed for all tools prior to running in the
well. Clear operations plans are needed to limit the time
in the well at elevated temperatures. It is very important to
78
Tubing that was exposed to H2S failed at HP/HT. (Images courtesy of Scientific Drilling International)
work together and make sure all limitations are understood. The detrimental effects of temperature can be seen
when the electronics of a new tool are compared with a
previously used circuit board. Rigorous job preparation is
critical to success in HP/HT logging.
Intensive post-job maintenance is needed for all HP/HT
equipment. Many sensitive components, though in working order, are routinely replaced to ensure optimum performance on subsequent logging jobs since temperature
cycling often results in failure. High temperatures are particularly wearing on O-rings and seals, so all are replaced
before the tools are reassembled and tested.
Logging HP/HT wells

Electronic components such as integrated circuits are
frequently the weakest link in a logging tool. Commercial-grade components require careful testing and qualification if they are expected to go to 175C (347F).
Temperature increase inside the tool depends on two
factors: the heat flow from the outside environment and
the heat dissipated by the power consumption of the
internal components. The use of low-power components
and efficient circuit design helps reduce the internal
temperature increase, and the use of a heat-sink to
increase the thermal mass inside the Dewar flask slows
the rate of temperature increase.
Dewar flasks are double-walled, vacuum-jacketed tubular
vessels. They are installed into separate pressure housings,
protecting the instruments from temperature and pressure. Materials with poor thermal conductivity in the
opening of the flask help to slow the rate of external heat
PRODUCTION
LOGGING
A recent steam injection logging campaign in Russia involved

the use of nuclear fluid density tools to measure the density of
saturated steam. Maximum temperature was around 282C
(540F), which classified these wells as HPHT-hc.
entering the flask and increasing internal temperature.

The use of memory-based tools instead of the standard
surface read-out helps in simplifying wireline operations.
No high-temperature conductor line is needed, only slickline. Slickline is a nonconductive solid wire that has a
much smaller diameter than even the smallest conductor
lines. The smaller diameter allows the use of less weight in
the toolstring to overcome the effect of high surface pressures on the line at the surface seal. Less weight equals
shorter lengths of pressure control equipment.
No complex pressure control gear is needed to maintain well control when using slickline. Internal tool temperature limit is controlled by the maximum temperature
rating of the battery that is used to power the downhole
tools. Most battery manufacturers use lithium thionyl chloride chemistry to achieve high power density as well as
very high temperature ratings.
HT applications
Operations in the geothermal environment are considered to be in the ultra-HP/HT or even HPHT-hc classifiEPmag.com | July 2012
cation. Pressures typically are not very much over

normal pressure gradient, but temperatures can typically be above 315C (600F). An example logged in
northern Japan was a hot dry granite well being prepared for steam production. The bottomhole pressure
was only 2,700 psi, but the temperature was 345C
(653F). A special flask using a metal O-ring as the primary seal was run in this well. Time downhole was just
over 5.5 hours.
Steam injection is another HT application. Steam
injection is used as a method of lowering viscosity of oil
in the formation. It allows oil movement in the formation and finally the production to the surface.
Production logs are used for determining zonal contribution, measure steam quality, and compute enthalpy.
This is true for both injection and production wells.
Density can be computed using nuclear density tools.
A recent steam injection logging campaign in Russia
involved the use of nuclear fluid density tools to measure
the density of saturated steam. In conjunction with pressure and temperature data, density information was used
to infer steam quality and enthalpy of the injected steam.
Maximum temperature (at surface, in the case of steam
injection) was around 282C (540F), which classified
these wells as HPHT-hc.
HP/HT operations can be completed successfully if
proper job planning, tool preparation, and maintenance
are completed. When operating in these very hostile
environments it is essential that everything is
considered.
HP/HT tools can be organized into three categories, selected according to commonly encountered technology thresholds. Classification system
boundaries represent stability limits of common
well-service tool components, elastomer seals, and
electronic devices.
Standard tools are rated up to 150C (300F)

bottomhole temperature and 10,000 psi bottomhole pressure.
HP/HT tools are rated for 150C to 204C
(400F) bottomhole temperature and 10,000 to
20,000 psi bottomhole pressure.
Ultra-HP/HT tools are rated for 204C to 260C
HP/HT-hc tools are rated for 260C to 315C
79
UNCONVENTIONALS:
NIOBRARA
School is out, but Niobrara operators

are still learning
Although it is early days for the Niobrara, this liquids-rich Rocky Mountain
play has operators and analysts abuzz.
Hart Energy staff
A Noble endeavor
The companies that are willing to follow this checklist
are encountering considerable success. One company
that seems to do no wrong these days witness its success in the Mediterranean Sea is Noble Energy.
Ted Brown, a senior vice president at Noble, provided
the opening address at DUO. He talked about the companys current position in the play and its plans to ramp
up production.
The company has plans to drill more than 150 wells
this year in the Niobrara. It is testing longer laterals,
expanding the play to the northeast, and studying
well spacing.
ot surprisingly, many of the speakers at Hart

Energys recent Developing Unconventional Oil
(DUO) conference in Denver spoke enthusiastically
about the Niobrara shale. After all, this enticing new
prospect is just a few miles to the east of the city, though
it also extends north into Wyoming and Nebraska.
What makes the play confounding is its variability.
Jessica Chipman, associate, E&P Research at Tudor,
Pickering, and Holt (TPH), reviewed the results of a
2011 publication that looked into the play in detail in
a talk titled The Niobrara: A look into the
weird science of tight, light oil plays. After
EOGs Jake discovery in 2010, she said, a land
A Noble rig drills ahead at a Niobrara
rush ensued as companies snapped up acreage
well site in Weld County, Colorado.
and touted the play as the next Bakken.
The company expects the play
Some of those companies ended up with very
to have about 1.4 Bbbl of net
disappointing well results.
oil resource potential. (Photo
Chipmans team looked at every single well
courtesy of Noble Energy Inc.)
that had been drilled to date and learned two
things: one, its early days for the Niobrara yet,
particularly outside of the Wattenberg field;
and two, the reservoir is quite variable, so well
location is very important.
In examining the dusters, almost every
early disappointment was drilled without
seismic. Wells that were drilled out of zone
also encountered problems with proppants
swelling in the surrounding marl formations.
Another discovery was that resistivity and
thermal maturity vary throughout the basin,
leading to large changes in water saturation
and areas where there has not been enough
heat and pressure to establish a hydrocarbon
system.
What matters, the report concluded, was a
checklist that includes seismic, resistivity studies, thermal maturity, pressured reservoirs, natural gas in situ, proper well orientation, and
the presence of natural fractures.
80
UNCONVENTIONALS:
NIOBRARA
In Nobles view, the Niobraras Denver-Julesburg (D-J)

basin has joined a select list of productive plays.
Brown said that Noble is expecting a 50% compound
annual growth rate in the Niobrara during the next five
years, which would essentially double this years production. In addition, Noble expects the play to have about
1.4 Bbbl of net oil resource potential.
Production in the D-J basin is about 55% liquids, and
the company thinks that number can be bumped up to
about 66% in the next five years. That will be driven by
an aggressive horizontal drilling program. When you
examine the basin and couple that with executing in a
responsible and prudent manner, we think it will be a
recipe for success, Brown said.
Brown talked about Nobles satisfaction in burrowing
into the Niobrara as he emphasized that recent results
in Northern Colorado are exceeding expectations.
As we examine our 640,000-acre horizontal position,
which includes Wattenberg and Northern Colorado, we
are averaging 45% to 50% rates of return, he said.
Noble has reported successful results with extendedreach laterals in the play, and Brown said the company
hopes the positive results can be repeated. Twelve to 15
extended-reach laterals will be drilled later this year, he
said. Weve also developed a concept in which a number of wells flow into a central production facility. It
minimizes the footprint and delivers significant savings.
Its also about limiting water and water-hauling, and
it results in some dramatic savings. We estimate about
22 million truck miles will be eliminated, which yields
about a 9% reduction in emissions. So its a win-win situation for Noble, landowners, the communities we operate in, and the entire state of Colorado, Brown said.
In Colorado, Brown said that Noble has made a commitment to incorporate the use of natural gas into all
phases of its operation. And why not? he said. There
are so many benefits here when you talk about air quality, fuel savings, and reducing your footprint.
In summing up the Niobrara, Brown said, Weve just
not hit any disappointments in the Wattenberg or in
Northeast Colorado.
A Marathon position
With about 1 million net acres across four unconventional plays in North America, Marathon Oil Corp. has a
resource base that should provide more than 1 Bbbl of
incremental reserve bookings over the years, said James
Bowzer, vice president, North American production
operation, Marathon.
The company entered the Niobrara about 18 months
ago. We picked up about 200,000 acres in this play,
Bowzer told DUO participants. We have about 144,000
acres net to Marathon, although we operate the acreage

on a gross basis.
Weve been fortunate enough to bring in a good
friend of ours Marubeni into the play with us in a
70/30 joint venture, he said.
Marathons Niobrara resource base is relatively small
compared to other plays, primarily because the company is in the exploration phase with the play.
What makes the play confounding is the reservoirs variability, so

well location is very important, said Jessica Chipman, E&P
Research associate at TPH. (Photo courtesy of Tom Fox)
Weve got two rigs running right now. We are focusing largely in Weld County at this point in time. Were
looking at additional spacing tests during 2012.
For us, we have consistently said that school is still out
on the Niobrara. There is no doubt there are going to
be sweet spots. The Wyoming portion of the play in the
northern portion of the basin doesnt look as good. There
are portions of the Colorado play that look really good.
As you go further into the Wattenburg field, it gets
pretty gassy, he explained. Given where gas and NGL
prices are in the Rockies, thats not our target.
The real issue is going to be how to find the sweet
spots, he said. We havent eliminated or defined anything. I think it took us over a year in the Bakken to get
that kicked off.
There are quite a few targets to test here. Clearly, there
is not as much oil in place as in the Bakken. But you dont
need a Bakken to make a good play. So we dont let that
fool us when making our decisions, he added.
PDC likes Wattenberg predictability

Some companies might be hesitant to put all of their
eggs into the unconventional basket. PDC is not one of
those companies.
81
UNCONVENTIONALS:
NIOBRARA
With all of its assets in either tight gas (the Piceance

basin), shale gas (Marcellus shale), or shale oil (Niobrara
and Utica shales), the company controls a total of 370,000
acres with 4,000 drilling locations. With a goal to have
50% of its portfolio in liquid plays, the company is focusing on the Niobrara and Utica for most of its activity.
In the Niobrara, PDC recently acquired an additional
35,000 acres for US $330 million. Scott Reasoner, vice
president of western operations for PDC, told the DUO
crowd that the company has been working in the Wattenberg field for a long time. But things are changing
dramatically with the horizontal focus, he said. PDC will
have a second rig running in the field in 3Q 2012 and
plans to bring in a third rig in 2013.
The latest acquisition has had an immediate impact,
he said, providing a 10% increase in total production
and a 22% increase in liquid production, up to almost
11,000 bo/d.
While the D-J basin as a whole has proven to be rather
unpredictable, Reasoner said the Wattenberg field is
highly predictable. The company currently has 27 wells
in the field, many of which offset some of the best wells
in the play. Currently it is testing its wells to measure
frac rate; flowback rates; fluid design; casing design; and
drilling optimization, including pad drilling. Plans for
2012 include targeting the A and C members of the Niobrara as well as the B member, testing other D-J basin
zones, and examining reduced spacing and pad drilling
options. The company also plans to test horizontal
Codell potential, with its first well to be hydraulically
fractured and tested in June.
Overall, he said, PDCs acreage in the Wattenberg
field is characterized by predictable productivity, production performance that is not affected by drilling
orientation, microseismic data that show fracture
orientation and distribution, and refinements in
artificial lift.
Whitings expansion
The first time Denver-based Whiting Petroleum Corp. presented at one of Hart Energys conferences, its market cap
was about $500 million. By May 2012, the company had
grown to about $6 billion.
With solid success in the Bakken, Whiting has
expanded its operations in the Niobrara, where it
brought in a couple of wells at 400 boe/d.
There are a great many opportunities facing us,
Chairman and CEO Jim Volker told DUO attendees.
We have about 6,000 potential locations to be drilled
horizontally for unconventional oil in the US. We are
really going to get after it in the next couple of years.
Today, Whiting is producing about 80,700 boe/d, a
82
Going forward, Whiting Petroleum plans to spend about 47% of its

budget in the Rockies, where 67% of its net daily production is
derived. We have about 6,000 potential locations to be drilled
horizontally for unconventional oil in the US, Chairman and CEO
Jim Volker told DUO attendees. (Photo courtesy of Tom Fox)
14% increase, quarter-over-quarter from 4Q 2011 to 1Q

2012 from its 700,000 net acres acquired at a weightedaverage cost of US $479 per acre. About 86% of its
reserves are oil, and 67% of its net daily production is
from the Rocky Mountains.
Currently it has 421 3P drilling locations in the Central Rockies and 1,416 total drilling locations in the
region. It plans to spend $85 million in the region in
development in 2012.
Its Redtail prospect in Weld County covers 97,267 gross
(74,808 net) acres. Recently, the company completed the
Wildhorse 16-42H well with a 24-hour initial production
(IP) of 430 boe/d. It also brought in the Wolf 35-2623H
with a 24-hour IP of 426 boe/d. Because of these results,
Bowzer said, the company is planning to increase its 2012
drilling program from eight wells to 17 wells.
Going forward, Whiting plans to spend about 47% of
its budget in the Rockies, with another 6% going into
the Permian basin. We are really putting our money
where our mouth is with respect to unconventional oil
plays, Volker said. This year, we plan to drill more than
250 wells, and almost all of them will be directed toward
one sort of unconventional oil play or another.
Overall, unconventional oil has done something for
Whiting that I think is very difficult to do in this business, and that is to have great high margins. In our first
quarter of this year, we set a new record with $74.17 per
boe net margin, which was 66% of our net boe price.
While the Niobrara still lags behind the Bakken in
production and overall optimism, continued enthusiasm
about the play promises to rocket it into the brackets of
one of North Americas best shale oil plays.
Completer
Energy Services
A SUPERIOR ENERGY SERVICES COMPANY
- FLUID MANAGEMENT DIVISION -
oan!
Lr
`
Can handle all your Fluid
Water
Management needs in the Niobrara

Frac tanks and storage tanks up to 40,000 barrels
Hot oilers and superheaters Water recycling
Saltwater disposals Wei ghted drilling mud
Low volume pressure pumping trucks to 10,000 psi
Chemical treatment trucks Fresh water
Liquid and sacked KCI
Packer fluid
Surfactant Clay stabilizer Corrosion inhibitors

Biocide and other chemicals , including acid
HAMM & PHILL IPS
SHALE
11
Complete Energy Services also provides fluid

services in the following basins:
Bakken Eag le Ford Permian Basin Barnett Shale
Arkoma/Anadarko/Texoma Woodford Mississi pp i Lime
Granite Wash Tonkawa Cleveland Piceance
Fluid Management Division Office - 800-366-6024
CONSTRUCTION
& INSTALLATION
Heavy-lift vessels tip the scales

Newbuild offshore structures are increasing in number and size, creating a virgin market for
giant heavy-lift vessels that can transport facilities or carry out offshore dry-docking on location.
he impending completion of Dutch marine contractor Dockwises innovative semisubmersible Dockwise

Vanguard by the end of this year will see this vessel arrive
on the market with the capability to be a true gamechanger.
With three transportation contracts already signed, the
Vanguard has been welcomed by oil companies looking to
speed up the process of transporting their facilities, often
halfway around the world. The sums are simple enough
the self-propelled vessel will be able to sail at 12.5 knots to
14 knots from the Far East shipyards to the Gulf of Mexico (GoM), for example, in around 50 days. That is a distance that normally takes around 120 days in a wet tow.
Such a crucial cut in sailing time has benefits in terms of
bringing fields onstream to begin earning revenue much
earlier than currently possible.
According to Robb Erickson, Dockwise vice president,
sales for heavy marine transport, the vessel also enables
the dry transportation of complete FPSOs and other
floating production systems without the need to carry out
further work at the other end of the journey. For FPSOs
we can bring the whole thing over from the Far East,
topsides and all, rather than do the hull there and the
topsides in the West, he said. This further adds to the
time-saving and earlier revenue-generating advantages
of using this vessel for such jobs.
He added that a future option might be for FPSOs
which are just a big box to be built without engines
instead being transported by the Vanguard to its location
for mooring.
The offshore industrys requirement to deploy increasingly large and heavy floating production units (FPUs),
not only FPSOs but tension-leg platforms, semisubmersible platforms, and spars, is what drove Dockwise
to brainstorm and eventually go ahead with its Type 0
Super Vessel. With many such facilities weighing more
than 50,000 metric tons, the vessels are well beyond the
capabilities of the existing fleet of self-propelled semisubmersible transport carriers.
Until now this has led to these FPUs being shipped in
segments and then integrated at their destination. For
spars, for example, their own size has been limited by the
size of our vessels, said Erickson.
Being able to transport larger integrated structures has
the benefit not only of saving time in terms of hookup
and commissioning, but it also reduces risks and insurance costs as well as bringing forward first oil or gas.
A grand scale
The sheer scale of the Vanguard is impressive, with a carrying capacity of 117,000 metric tons, a length of 275 m (902
ft), and a beam of 70 m (230 ft). This vessel is the largest
semisubmersible ever built and can easily carry ships that
are giants in themselves. Erickson pointed out that Dockwise also is in negotiations with the US Navy over possible
applications, including the transportation of aircraft carriers. It also has a 50% larger lifting capacity and 70%
greater deck area than the currently largest active heavy
lift ship, the Blue Marlin, another Dockwise vessel.
The Dockwise Vanguards movable casings mean it is able to
carry fully integrated structures with overhang available on all
sides. The vessels first contracted job at year-end 2012 will be to
transport the Jack/St. Malo semisubmersible platform for Chevron
from South Korea to the GoM. (Images courtesy of Dockwise)
84
I
"Wo
Offshore installation... our core business!

Global availability
Module installation on FPSO offshore
Spar & TLP installation
Deepwater capabilities / DP3
is Experienced, safe and reliable

t
Rr f
-qW C
-
.t
"fir
1 1
Seaway Heavy Lifting
Seawa y Heavy Lilting Contracting Lid.
Lophihs Business Centre II , 237, 28th October Street , 3035 Limassol , Cyprus
Phone : +35 725 029 090 - www shl .com .cy
Seaway Heavy Lit hrg Engineering BV

Albert Einsternlaa n 50. 2719 ER Zoetermeer , The Netherlands
Phone: +31 79 363 77 0 0 - www.sh l .com.cy
CONSTRUCTION
& INSTALLATION
To put the scale of the vessel into perspective, the Vanguards first job scheduled for December this year after its
handover from South Koreas Hyundai Heavy Industries
is to transport Chevrons large Jack/St. Malo semisubmersible platform hull from South Korea to the Kiewit
yard in the US. Erickson said the platform was well
within the capabilities of the vessel.
The second contract currently in 2013 is to transport
Enis circular Sevan 1000-design Goliat floating production platform (with fully integrated topsides) from South
Korea to Norway, while its third at present will be to transport Statoils Aasta Hansteen spar platform in the first
half of 2015 to Norway. The latter spar buoy, with an
approximate length of 200 m (656 ft), diameter of 50 m
(164 ft), and weight of 45,000 tonnes, is close to the
maximum capacity of the Vanguard, Erickson said.
Other market opportunities

Aside from the transportation options, however, the scale
of the vessel also allows Dockwise to pursue other markets
previously not possible. The most interesting of these is
offshore dry-docking, which the company noted earlier
this year at the Offshore Technology Conference in
Houston was a major business opportunity.
According to Dockwise, the ship was designed specifically with this in mind, as the ability to be able to dry-dock
an FPSO (or drillship) while the unit remains on location
is attractive to operators. The FPSO will be able to carry
on producing oil and gas while in dry-dock on location,
rather than the normal procedure of taking it offline for
up to three months while it heads to shore for inspection,
maintenance, and repairs, with all the loss in revenues
that entails. We believe dry-docking offshore could be a
very big market, said Erickson.
The American Bureau of Shipping in March this year
issued an approval in principle to Dockwise for the off-
Tech Spec: Dockwise Vanguard

Length
275 m
Breadth
Depth
Draft submerged
Water depth
above main deck
Deadweight
Max. Speed
Propulsion
70 m
15.5 m
31.5 m
Total power
86
16 m
117,000 metric tons
14.5 knots
Two diesel-electric main
propulsion trains and two
retractable azimuth thrusters
27 MW
The ability to drydock a vessel such as an FPSO or drillship on

location will enable operators to avoid any nonoperational
downtime, as FPSOs will be able to continue producing while
inspection, maintenance, and repairs are carried out. The Van-
guard and FPSO will be able to weathervane around the production systems turret.
shore dry-docking concept. A unique feature of the drydocking option is that both the anchor lines and the flow
risers will remain connected to the FPSOs internal or
external turret mooring system, enabling the combined
vessels to freely weathervane around the FPSO turret
mooring system.
Regarding the revolutionary design of the Vanguard,
there is no bow that is more striking, allowing an FPSO
for example to overhang beyond both the bow and stern.
Its navigation bridge, accommodation area, and lifeboats
are situated on the starboard edge of the ship (although
the captain also is able to steer from a portable module
on the port side if necessary).
The whole design was done with the aim of maximizing
cargo space and also features repositionable casings that
give it greater flexibility in terms of its cargo-carrying
options. Specialist shipbuilding engineering agency
DeltaMarin of Finland designed the vessel in detail.
Overall, it allows for large amounts of water to flow
along the entire deck of the vessel without there being
any chance of water entering the confines of the Vanguard
itself. With the ability to sink itself in the water to allow up
to 16 m (52 ft) of water above its deck, this first-of-its-kind
vessel has a maximum submerged draft that is 3 m (10 ft)
more than the existing largest vessel, the Blue Marlin,
allowing even larger structures to simply float on before
the vessel is raised again.
As the offshore industry continues its journey into
deeper waters and remote regions with little nearby
infrastructure, other mega-carriers are likely to emerge.
Dockwise itself may well opt for a second similar vessel in
due course. The cost is not inconsiderable the Vanguard
will cost the company a total of US $240 million. But the
rewards, with around $100 million in contracts already
received for the vessel and more in the pipeline, are likely
to be substantially more.
Name your challenge .
Well Cons ruc i
,
r -
-_ : .:
,may-. `
,`
'sa ' -
& Completion Tools
a:. , t
..
_..s
..
:.:
74
Aft
Forum brings together well-known, trusted brands with an extensive range of mission critical products and
services for the subsea , drilling and production sectors. Our experienced people and proven technolog ies ar
read to meet an challen e.
II
To find the products to meet your challenges visit www.f-a-t.com
-a .
CONSTRUCTION
& INSTALLATION
Speed, strength, and flexibility are

key for offshore construction players
The constant demand by operators for increased heavy lifting capacity along
with the requirement for operations in greater water depths and remote locations
is seeing the offshore construction vessel sector innovate like never before.
he range of concepts and designs on the drawing

boards of marine construction contractors has always
been vast, but the number of multifaceted vessels that have
recently entered or are due on the market soon reflects the
increasingly flexible approach they are adopting.
One is based on a concept that first came to light back
in 1987 but is only now starting to come to fruition the
Allseas Groups giant newbuild vessel Pieter Schelte, currently
under construction at Daewoo Shipbuilding and Marine
Engineering in South Korea. The vessel is designed for carrying out single-lift installation and removal of large oil
and gas platforms and the installation of subsea pipelines.
Another is Subsea 7s newbuild Seven Borealis, the companys flagship pipelay and heavy lift vessel, with its
unique 5,000-tonne mast crane. Yet another is Seaway
Heavy Liftings Oleg Strashnov crane vessel, with its own
5,000-tonne lift capacity.
Although very different and innovative designs, the
rationale behind each of them is essentially the same: to
offer offshore oil and gas operators (and offshore wind
farm operators) increasing single-lift capabilities; faster
vessel transit speeds between jobs; and a wider range of
services, including major pipelay contracts.
A recent presentation about Allseas Pieter Schelte given
at the 2012 Offshore Technology Conference (OTC) in
Houston in May gave the audience an update on the
progress of this giant vessel for the Swiss-based contractor.
The vessel is named after offshore heavy lifting industry
legend Pieter Schelte Heerema.
The dynamically positioned platform installation,

decommissioning, and pipelay vessel has an estimated
total building cost of more than US $1.6 billion. With a
length of 382 m (1,253 ft) and a width of 117 m (384 ft),
this giant vessel will have a topsides lift capacity of 48,000
metric tonnes and a jacket lift capacity of 25,000 metric
tonnes. The pipelay tension capacity will be 2,000 tonnes,
doubling the capacity of the companys Solitaire vessel to
become the worlds largest pipelay vessel.
With a wide slot 122-m long by 52-m wide (400-ft by 171ft) at its bow to fit around platform substructures, it will be
equipped with a hydraulically operated topsides lifting system. For the installation or removal of jackets, the vessel
will have a system to two tilting lift beams at the stern.
The ability to carry out very large single lifts will substantially reduce offshore hookup costs in topsides installations, while in topsides decommissioning laborious
module removal will be unnecessary. This has significant
benefits in terms of shifting more work onshore where it
is safer and more cost-effective.
Acknowledging that such a vessel will not always be
able to find sufficient heavy lifting work, it will also be a
pipelayer with an S-lay capacity of up to 2,000 metric
Pieter Schelte on course

According to the paper authored by his son, Edward
Heerema (the owner and president of Allseas), the vessel
is on course for delivery and commissioning by year-end
2013 from Daewoo, complete with the topsides lift system
and the pipelay system, and will be ready for offshore
operations in early 2014. By the end of 2014, the jacket
lift system will be fitted.
88
For the installation or removal of jackets, the vessel will have a

system of two tilting lifting beams at the stern. (Images courtesy
of Allseas)
There is more
to the story
READ MORE ONLINE
EPmag.com
tonnes for installing heavy pipelines in both deep and

shallow waters.
The Pieter Schelte will be have eight main diesel generators, with a total installed power of 95 MW, powering 12
azimuth thrusters. With a maximum speed of 14 knots,
the vessel will be able to accommodate up to 571 people.
Borealis lights up market

A different kind of vessel is Subsea 7s Seven Borealis,
which was delivered to the company earlier this year and
which by the end of this year is scheduled to start work
for Total on the operators deepwater CLOV development offshore Angola, laying pipe-in-pipe production
flowlines in J-lay mode. It also will lay water injection and
gas export lines in J-lay and S-lay mode and install a gas
export single hybrid riser and manifolds.
The vessel possesses a 5,000-metric-tonne lift capacity
crane installed by Huisman, and with the top of the mast
reaching 150 m (492 ft) above the main deck, it is the
worlds largest offshore mast crane and the first of its kind
to be able to lift this amount of weight. With the cranes
full heave-compensated deepwater lowering system, it is
able to install heavy loads required for deepwater subsea
production systems.
In a technical paper presented by Subsea 7 and Huisman Equipment at OTC, the companies state that other
than the dedicated heavy lift vessels in the market, most
of the subsea, umbilicals, risers, and flowlines (SURF)
construction vessels have limited crane capacities while
specializing in installation of SURF products in deep
water only. The mast crane onboard Seven Borealis has a
capacity normally only found on dedicated heavy lift vessels and combines that with the capability of installing
SURF products (rigid pipe, flexibles, and umbilicals) in
deep water. As a result, the mast crane onboard Seven
Borealis bridges the gap between SURF installation capabilities and heavy lift, the authors said.
The DP vessel, which also can be moored via an eightpoint mooring system, is based on Ulsteins SOC 5000
design and has a wide range of operational capabilities,
including platform and deck installations, mooring and
subsea installations, and platform removals. It also has a
dual main hoist that can tilt jackets.
Having cost an estimated $460 million to build, the
ship became part of Subsea 7s fleet when the company
merged with Acergy in 2010. With an overall length of 181
m (594 ft), a beam of 46 m (151 ft), and a moulded depth
of 16 m (52 ft), the vessel has a transit speed of 14 knots.
Power is provided via two 5.5 megawatt (MW) main
thrusters and four retractable thrusters, each giving an
extra 3.2 MW power during transit. A bow thruster, meanwhile, provides 2.7 MW of thrust.
The giant newbuild construction vessel Pieter Schelte has been

on the drawing boards since 1987 but will become a reality
before the end of 2013 when it is due to leave Hyundais yard. It
will have a topsides lift capacity of 48,000 metric tonnes.
Oleg Strashnov in action

Already in action has been Seaway Heavy Liftings own
state-of-the-art crane vessel, the Oleg Strashnov, which
began operations last year.
With its innovative hull shape, the vessel has a transit
speed of 14 knots, a 5,000 metric-tonne fully revolving
crane (hinged on an A-frame that allows it to be lowered
for bridges when passing through the Bosphorus Strait
or Suez Canal), and an 800 metric-tonne auxiliary hook,
enabling it to carry out a wide range of tasks from dual
hook upending of large jackets to heavy deck installations
as well as the installation of large subsea structures.
The DP vessel earlier this year carried out successful
lifts offshore India, including hoisting a 4,000-tonne living quarters module for Indias state oil company ONGC
on its Mumbai High North field after carrying out several
jobs offshore Europe in 2011.
The recurring theme among these vessels is that of
flexibility and speed. Heavy lifting capacity itself is not a
new thing Heerema Marine Contractors Thialff and
Saipems S7000 semisubmersible dual-crane vessels have
both been around since the mid-1980s and in recent
years have both lifted topsides on or around the 12,000metric-tonne mark.
What separates this new generation of vessels is their
ability to multitask in order to gain year-round employment and high sailing speeds that enable them to satisfy
demand across the globe in a timely manner that until
now has been impossible to achieve.
Editors Note: Excerpts have been included in this article from
OTC 2012 papers 23169 and 23462.
89
MERITORIOUS AWARDS
FOR ENGINEERING INNOVATION
Schlumbergers MI SWACO received an award for its Envirotherm NT technology in
Schlumberger received an award for its LIVE digital
the Drilling Fluids category. From left to right are Lee Conn, Steve Orr, Rhonda
slickline services in the Remediation category. From
Duey, and Jim Bruton.
left to right are Rhonda Duey and Stuart Murchie.
WesternGeco received an award for its dual
Offshore Solutions BV received an
Halliburton also received an honorable mention
coil shooting multivessel full-azimuth acquisi-
award for its Offshore Access System
in the HSE category for its Offshore Slop Unit
tion technology in Exploration Technology.
in the Facilities category. From left to
technology. From left to right are Bob Palmer,
From left to right are Nick Moldoveanu,
right are Lindsay Davis and Mark
Thomas Larsen, Rhonda Duey, and Chip Miller.
Rhonda Duey, and Steven Fealy.
Thomas.
Halliburton received an
honorable mention in
the Drilling Fluids
category for its Tuned
Spacer V spacer fluid.
From left to right are
Dr. Sam Lewis, Rhonda
Duey, and Paul Boddy.
TESCO Corp. received an award for its XCD3 Casing Drill Bit in the Drill Bits
category. From left to right are Bryan Dudman, Robert Utter, Julio Quintana,
Tayvis Dunnahoe, Dietmar Neidhardt, and Paul Lonsdale.
Halliburton received an award for its EquiFlow

autonomous inflow control device in Completions.
From left to right, top, are Luke Holderman, Jason
90
Baker Hughes received an award for its Vision Web-Based Monitoring System in the Intelli-
Dykstra, Rhonda Duey, Jerry Wauters, and Randy
gent Systems & Components category. From left to right are Tommy Denney, Luis Mon-
Simonds. From left to right, bottom, are Michael
cada, Michael Gagner, Scott Weeden, Rustom Mody, Carl Osborn, and Darrin Willauer.
Fripp, Jean Marc Lopez, and Stephen Greci.
MERITORIOUS AWARDS
FOR ENGINEERING INNOVATION
Halliburton received an award for its RockStrong coring sys-
Halliburton received an award for its CleanStream service in the HSE cate-
tem in the Formation Evaluation category. From left to right
gory. From left to right are Greg Neal, Wesley Warren, Rhonda Duey, Jorunn
are Marc Davidson, Rhonda Duey, and Laura Schwinn.
Saetre, and Ron Hyden
Weatherford International received an award for its MotarySteerable
GasFrac Energy Services received an award for its Waterless LPG Gel in
system in the Drilling Tools category. From left to right are Nick Gee,
the Stimulation category. From left to right are Kyle Ward, Doug McMil-
Steve Farley, Tayvis Dunnahoe, Paul Timmins, and Chris Maranuk.
lan, Larry Burleson, Scott Weeden, Steve Batchelor, and Daniel Purvis.
Halliburton also received an honorable mention in the Completions
Baker Hughes received an award for its Ultra-Temperature SAG-D
category for its Liner-Conveyed Gravel Pack System. From left to right
ESP System in the Production Technology category. From left to
are Gary Geoffroy, Colby Ross, Chris Steadman, Rhonda Duey, Jerry
right are Luis Moncada, Scott Weeden, Rustom Mody, Michael
Wauters, and Tommy Grigsby.
Rumbaugh, and Jackson Reynolds.
Halliburton also received an honorable mention in the

Remediation category for its Rigless E-Line Recompletion
ION Geophysical received an award for its under-ice seismic data acquisi-
Solution. From left to right are Daniel Dorffer, Jim Hill,
tion technology in the Arctic/Deepwater category. From left to right are Curt
Rhonda Duey, and Ahmed Kenawi.
Schneider, Shawn Rice, Rhonda Duey, Joe Gagliardi, and Tim Dudley.
91
tech
WATCH
Gas hydrates mapped

using marine CSEM methods
Marine CSEM surveys could offer a solution to the problem of quantitatively
mapping gas hydrate.
Steven Constable, Scripps Institution of Oceanography;
and Karen Weitemeyer, University of Southampton
ethane hydrate is an ice/gas mixture stable at low

temperatures and high pressures. Such conditions
are found worldwide on continental shelves in water
depths greater than approximately 300 m (1,000 ft), and
wherever there is a source of methane, either from microbial activity or from leakage of deeper hydrocarbon reservoirs, hydrate is likely to form. Hydrate is stable in seafloor
sediment until the geothermal gradient makes temperatures too high, at which point a potent seismic reflector
called the bottom-simulating reflector (BSR) is often
observed, associated with the small amount of free gas that
can accumulate at the bottom of the hydrate stability zone.
Hydrate is hugely important: it represents a large part
of the global carbon inventory and probably contains
more methane than conventional gas reserves. As such, it
is considered by some to represent a commercial source of
energy, and tests have been carried out to produce gas by
depressurization. It can be a hazard to drilling and infrastructure if warm production fluids or exothermic cementation reactions destabilize hydrate in the sediment, and it
could be responsible for submarine landslides during periods of sea level change or global warming. Rapid release
of methane, a potent greenhouse gas, also could have
played a role in past climate change.
Yet scientists know little about the global volume and
distribution of hydrate, and, in particular, commercially
viable deposits have proved elusive. One reason for this is
that simple seismic reflection methods tend to respond to
the edges of structure and are poor at identifying hydrate
in the section through bulk properties. The BSR, once
thought to be a good indicator of hydrate occurrence,
This illustration shows the gas hydrate stability zone and seismic
BSR. (Images courtesy of Steven Constable)
has proved otherwise because it is simply evidence of

trace gas at the edge of the stability field.
Hydrate resistivity
Gas hydrate has long been known to be electrically resistive, determined both from well logs and from qualitative
laboratory measurements. Recently, laboratory work was
extended to quantify the electrical resistivity of pure
methane hydrate and showed it to be 20,000 ohm at 0C
(32F) and about 40% less resistive at 10C (50F). The
addition of sediment and pore fluid makes resistivity relationships much more complicated, and a great deal of
laboratory work remains to be done.
In spite of the complications, gas hydrate will present
a viable target to electrical prospecting methods, and
researchers are using marine controlled-source electro-
Results from Mississippi Canyon 118 in the GoM

are presented as apparent resistivity pseudosections.
On the left are data from OBEM instruments using
source-receiver offset as a proxy for depth. On the
right are results from a receiver towed at a fixed offset
of 400 m (1,300 ft), using frequency-dependent skin
depth as a depth proxy. In this figure, the blue regions are
resistive and probably represent hydrate in the seafloor section.
92
Oilfield Improvements
ULTRA-FLOW"
FIELD-INSTALLED
CENTRALIZERS/
PARAFFIN SCRAPERS
Full-circle Wiping
of Tubing 1.D.
More Gripping
Force on Sucker Rods
In a marine CSEM hydrate survey, deployed OBEM receivers are augmented by receivers
towed at fixed offset behind an EM transmitter.
More Fluid Flow-by
magnetic (CSEM) surveys in the search for submarine hydrate.

Over the last decade, marine CSEM methods have been adopted by the oil
and gas industry as a deepwater exploration tool. Ocean-bottom electromagnetic (OBEM) recorders are deployed on the seafloor, and a powerful electromagnetic (EM) transmitter is towed through this array in close proximity (50 m
to 100 m or 165 ft to 330 ft) to the seabed. In this way, data are collected to
transmitter-receiver offsets of many kilometers, providing data sensitive to
depths of several kilometers into the crust.
One of the principle applications of this relatively new technology is discriminating between seismic targets that are caused by a small amount of gas in the
pore volume (fizz gas) and viable hydrocarbon reservoirs, which are more
resistive. This traditional CSEM method has successfully been used to study
hydrate, notably offshore Oregon at a location called Hydrate Ridge, but a
sparse array of seafloor receivers is not ideal for studying structure in the upper
few hundred meters of sediment. To address this problem, a three-axis electric
field receiver was developed that can be towed at a fixed offset of 300 m to
1,000 m (985 ft to 3,300 ft) from the transmitter (Vulcan). Unlike similar systems that are dragged in contact with the seafloor, by flying the receivers at a
similar height to the transmitter, the system can operate in areas with installed
infrastructure such as wellheads, pipelines, etc. This complicates the problem
of locating the positions of the instruments, but the towed receivers record
depth, pitch, roll, and heading as well as electric field amplitude and phase.
For traditional CSEM surveys with deployed OBEM receivers, the various
transmitter-receiver offsets provide depth sensitivity in the data. Although an
array of four Vulcans at offsets between 400 m and 1,000 m (1,300 ft and 3,000
ft) was successfully deployed, transmitter waveforms with broad frequency content can be used to provide sensitivity at different depths. High-frequency EM
energy gets absorbed more rapidly in conductive seafloor sediments, while lowfrequency energy can propagate more deeply, and the characteristic penetration distance, or skin depth, can be used as a depth discriminator.
In results collected over Mississippi Canyon Block 118 in the Gulf of Mexico
(GoM), hydrate and active methane vents have been observed on the seabed,
but it is not known if hydrate occurs buried in the sediment. Both a conventional
array of OBEM recorders and towed receivers at 400-m offset were deployed
behind the transmitter. Both the OBEM data and towed receiver data show a
region of increased electrical resistivity in the vicinity of the methane vents. However, the towed receiver data exhibited higher resolution and better ties between
crossing lines. Also, about half the survey time was taken deploying, navigating,
and recovering the seafloor receivers, and so the ability to collect data without
the use of OBEM instruments significantly reduces the cost of such shallow surveys (of course, larger offset, deep-target surveys will still rely on OBEM instruments, which have a significantly lower noise floor at lower frequencies).
It is hoped that in the future a broad application of CSEM technology will
increase the industrys understanding of the amount and distribution of submarine gas hydrate and will provide the offshore exploration industry with a useful
geophysical tool for hazard mitigation.
Volume
Longer Useful Llfe

from Longer Vanes
& Bearing Surfaces
Positive Wear
Indicators
ICU I
Amodel with Glass Fill

CALL 1-800-LES WEAR
(800-537-9327) OR YOUR
Oilfield Supply Store
www.rodguides.com
[ 0 ) 1 Oilfield Improvements,
Inc.
VISA
1902 N. Yellowood Ave.

Broken Arrow , Oklahoma 74012 U.S.A .
RHO 918-250-5584
FAX 918-250-4666
Oilfield Improvements
WHEELED ROD GUIDE TM
COUPLINGS
For Deviated,
Directional and
Horizontal Wells
Used Successfully for
Over 27 Years by Over
90% of Major Oil &

Gas Companies in
Over 40 Countries Onshore and Offshore

Wheels are
Field-replaceable
Call
800-537-9327
or Your Oilfield
Supply Store
www.rodguides.com
Oilfield Improvements,
Inc.
1902 N. Yellowood Ave

Broken Arrow, Oklahoma 74012 U.S.A.
PHO 918-250-5584 FAX 918-250-4666
93
tech
TRENDS
Marine seismic technology

surges ahead; new fixed cutter
bits set record penetration rates
Broadband solutions
improve marine seismic images
The Wiband seismic data processing technology developed by ION Geophysical Corp.s GX Technology group
provides structural and stratigraphic high-resolution
images through the use of conventional towed streamers. Additionally, ION has launched the Calypso nextgeneration redeployable seabed acquisition system,
which the company said is designed to operate at twice
the depth while delivering twice the operational efficiency of its predecessor system.
According to ION, the new Wiband broadband solution is not deterred by source or receiver notches (or
ghosts) in the frequency spectrum that typically limit
image resolution in marine exploration. The technology
does not introduce phase distortion and instead improves
images by reprocessing legacy or new acquisition data.
The Calypso system leverages tilt-insensitive multicomponent VectorSeis digital sensors that provide
enhanced broadband seismic data, and it also features
buoy-based recording; a rugged design capable of operating in 5 m to 2,000 m (16 ft to 6,562 ft) water depth;
and an unlimited number of cables with twice the
length (12 km to 24 km or 7 miles to 15 miles), which
shortens cycle time and increases production.
IONs WiBand system has been used in 20 2-D and
3-D projects in 15 different basins worldwide. The
companys seabed acquisition systems also have been
deployed across the globe in the Gulf of Mexico, North
Sea, Caspian Sea, Middle East, and offshore Brazil and
West Africa. iongeo.com/wiband.
New category of seismic

captures 3-D wavefield
WesternGeco has unveiled the IsoMetrix marine isometric seismic technology and IsoMetrix family of marine
seismic products, which output isometrically sampled
point-receiver data in crossline and inline directions,
capturing the returning wavefield in 3-D.
According to the company, the new acquisition technology was developed through a 10-year research and
94
Conventional (above) versus IsoMetrix (below) data are exhibited in a North Sea time slice. (Image courtesy of WesternGeco)
engineering program to provide the most accurate

images of the subsurface ever recorded. The IsoMetrix
system uses calibrated, multisensory micro-electromechanical sensor technology with sensors measuring
both acoustic pressure and vertical and crossline acceleration throughout the frequency range. It also facilitates
high-resolution near-surface characterization, well
integrity planning, and 4-D repeatability, and measurements are provided as customer deliverables.
In 2011, the company field-tested this new category
of seismic, achieving a 12:1 crossline reconstruction
ratio and producing a 6.25-m (20.5-ft) data grid from
streamers 75 m (246 ft) apart. slb.com/isometrix.
Next-generation streamer reduces cable

drag, increases storage capacity
Sercel has expanded its line of marine survey acquisition
streamers to include the Sentinel RD next generation
of solid streamer. By reducing the models weight by
15%, cable drag is abated. The diameter of the streamer
also has been decreased, thereby augmenting storage
capacity aboard marine seismic vessels. The updated
solid streamer delivers high-quality data at low frequency,
and according to the company, the technology provides
a more accurate interpretation of marine geology, with
enhanced imaging of deep targets below complex overburdens. In addition to offering improved signal-to-noise
tech
TRENDS
ratio, the streamer also is deployable in a wider range of

layout options than its previous versions. cggveritas.com.
BOP actuation tool

tested offshore West Africa
The Forum Energy Technologies subsea BOP actuation
tool (BOP-AT) has been successfully tested on a live well
offshore West Africa in more than 1,000 m (3,000 ft)
water depth. The tool closes the BOP remotely via a workclass ROV when the BOP cannot be operated by conventional means. It can be fitted to an ROV skid assembly or
directly to the BOP and is reportedly able to actuate most
BOPs in less than 45 seconds to seal the affected well
bore, delivering more than 300 liters/min of fluid at pressures up to 7,500 psi. Forums BOP-AT achieves this by
using fluids such as seawater, mineral oils, or glycol fluids
through the BOP actuation port. f-e-t.com.
Forums BOP-AT provides sufficient pressure to activate the BOP

ram, allowing the BOP to shear and seal the drillpipe. (Image
courtesy of Forum Energy Technologies Inc.)
Software advances
seismic interpretation workflow
ffAs flagship product, GeoTeric, has been certified on
the NVIDIA Maximus technology platform. The company said its new generation of seismic interpretation
software can remove weeks from the interpretation
workflow by providing simultaneous visualizations on
one system.
According to ffA, the GeoTeric seismic interpretation
software directly translates geophysical data into geologiEPmag.com | July 2012
cal information while accelerating tasks such as interpretation and extracting from large 3-D seismic datasets.
Its high performance is driven by the NVIDIA Maximus
technology, which combines the visualization and interactive design capability of Quadro and Tesla GPUs in a
single workstation maximizing engineering simulation
computation and seismic visualization. Large model visualization can be conducted and GPU-based computations
made simultaneously on the interpreters desktop without
the need for multiple systems or performing tasks at different times, the company said. ffa-geosciences.com.
New drilling tools improve

unconventional development
Halliburton has introduced a new tool used in hydraulic
fracturing that increases injection pressures in the casing
by providing consistent entry hole perforations, improving flow efficiencies by 20%. The companys new drill bit
line also provides higher rates of penetration and longer
drilling intervals for deeper and longer well bores in
unconventional formations.
During hydraulic fracturing, the MaxForce-FRAC
charge provides a tight variance of entrance hole diameters in the casing. Large variances in entry hole diameters
increase the effects of near-wellbore tortuosity and creates
holes that do not contribute to stimulation, which can
increase injection pressures and cause suboptimal fluid
distribution. By providing consistent diameters in entry
hole perforations, pressure distribution and stimulation
efficiency is improved and early screen-outs also could
potentially be avoided, according to the company. The
charge can be used regardless of the guns azimuthal
orientation and clearance and is available for 318-in. and
338-in. gun assemblies that are commonly used in 4-in.
and 5-in. casings.
The MegaForce tool is an addition to Halliburtons
line of advanced fixed cutter drill bits. According to
the company, the drilling technology enables higher
rates of penetration and longer drilling intervals when
drilling unconventional wells. Further, its improved
cutting structure and matrix material, multilevel force
balancing, hydraulics, and shank length recently have
set new field records, delivering more than 20%
improvement in drilling penetration rates and drilling
between 18% and 31% more footage in several field
trials. halliburton.com.
Nancy Agin, Associate Managing Editor;
Cody zcan, Assistant Editor
95
IIth Annual Conference
A9
ON
illiliwii
Ar '
STRATEGIES AND
OPPORTUNITIES
Apo
September 5-6, 2012

Ritz-Carlton Hotel
l,
Dallas, Texas
l
Agenda Highlights I September 6, 2012

U.S. A&D Activity-Who's in the Data Rooms,
Who's at the Closing & Why?
adstrategiesconference.com
PV10s , PUDs & Acres: What Are They Worth

Today,and Do Traditional Metrics Work?
A Few of the Featured Speakers include:
I> U.S. A&D Market in Flux
An unprecedented dichotomy in oil and gas prices

has locked up would-be gas sellers and created an
Oil, Gas Or NGLs? The Changing Dynamics o

Commodities Influencing Asset Movement
_ 4
w
f1
urgent demand for sparse oil assets-and NGL

prices remain a wildcard. This turbulent pricing
New-Look Buyers and the Arena for Assets

The 800-Pound Gorillas-What Will the MLPs
Pay and How Can They Do It?
environment has oil and gas asset transactions caught

in a cross-current.
Sam Oh
Senior Partner
Apollo Management LP
Join us for deal discussion and hear from the players,

advisors and analysts on strategic deal-making in
this evolving marketplace.
rt.
IOU'!'
im
4%
i
s
The Masters-Their Favorite Deals. The Ones

that Got Away. And the Ones They're Glad
Got Away.
Chris Simon
Ward Polzin
Managing Director ,
Manag ing Director
Head of Asset
Tudor, Pickering, Holt & Co.
Acquisitions & Divestitures

Raymond lames
FU
Workshop I September 5, 2012

This consistently great workshop focuses on upstream business
THE WORKSHOP
development for newcomers, veterans and financial partners - and
Sponsored by
The Oil ' Gas Assct
CLEARINGHOUSE
buyers and sellers to negotiate on competitive deals in a simulated
it includes the famous "Let 's Make a Deal" Lab. Form teams of
data room. May the best team win!
Presented by
Sponsored by
ENC.P INV1 I
lE,F S L.Y.
Chesa cake
.:f a
HOIIOr,d
CF H V i ( ' F C
For more information and to register online, please go to adstrategiesconference.com
TUDORPICKERING
HOLT&CO
..
NOBLE R O Y A L T I E S , INC.
PORTER
H El D G E s 1, 1 v
fj .bCOt1Q DDnk
energy
;
'
EN E n T I A
SCF F IW ARE
U, IL
I.,
MERGHER
0E
t M 1 1 G Y S . I C i.U F
.OV1101tIM<
Ad)WATCH
Investo
r
HART E N E R G Y
For more information and to register online,please go to adstrategiesconference.com
REGIONAL REPORT:
MEDITERRANEAN
Mediterranean hot with

Eastern promise
The Mediterranean Sea has been dramatically transformed from a region containing mostly
incremental oil and gas reserves to one that is now recognized as a world-class gas basin.
he turnaround in the Mediterranean regions fortunes is almost entirely due to the massive surge of
interest in the Mediterranean Seas eastern margins,
thanks to giant discoveries made in the previously sleepy
backwaters offshore Israel and Cyprus.
The proximity to neighboring Egypts productive offshore and onshore sectors, where western operators
such as BG Group, Eni, BP, and others have had substantial success in finding and producing onshore, shal-
low-water, and deepwater gas reserves, has long led

explorationists to believe the trend extended further
east. Little or no offshore activity was carried out, however, until virtually the turn of the century due to a lack
of interest and in some cases political pressure.
How things have changed. Out of the top 10 deepwater gas discoveries made globally between 2001 and
2010, the largest two were both offshore Israel. Noble
Energy and its domestic partners Delek Drilling and
Avner Oil & Gas have almost single-handedly delivered
energy self-sufficiency to the country after the discoveries of the elephant-sized Leviathan and Tamar gas
fields (around 17 Tcf and 9 Tcf gross recoverable reserves, respectively) in the Levant basin
around 100 km (62 miles) offshore. Tamar and
the nearby Dalit discovery are estimated to hold
reserves sufficient to meet Israels gas needs for
the next two decades.
Six out of six
Noble Energy has drilled six out of six consecutive discoveries offshore
Israel and Cyprus, three of which are world-class in terms of size. (Map
courtesy of Noble Energy)
98
Noble has gone six out of six since 2008 in

terms of drilling successful consecutive subsalt
discoveries so far, three of which are worldclass in resource size and total more than 35
Tcf (5.8 Bboe) of gross gas reserves (12 Tcf
net to Noble). The company also has what it
describes as an extensive inventory of natural
gas prospects in the area as well as 3.7 Bboe
of gross unrisked resources in a deep oil play.
Nobles most recent addition was an estimated 7 Tcf discovery (the Cyprus A-1 well)
offshore neighboring Cyprus in Block 12, informally named Aphrodite, which has sparked
massive interest in that countrys second and
currently ongoing offshore licensing round
offering 12 frontier blocks off its southern
coast. Successful bidders will be confirmed by
November, with 29 companies (10 consortia
and five independently) having bid for various
blocks including Total, Petronas, KOGAS,
Delek Group Ltd., ATP Oil & Gas, and others.
With spending of around US $750 million
REGIONAL REPORT:
MEDITERRANEAN
planned for this year in the eastern Mediterranean,

Noble is leading the way in terms of investing in the
region, with its focus at present on the development of
the Tamar and nearby Alen gas fields with first production on schedule for 2013.
Earlier this year, the company also confirmed its sixth
consecutive find in the region on its deepwater Tanin
prospect in the Alon A license offshore Israel, hitting
approximately 40 m (130 ft) of gross natural gas pay in
high-quality lower Miocene sands. Tanin holds an estimated 1.2 Tcf of gas and lies approximately 21 km (13
miles) northwest of Tamar in 1,550 m (5,100 ft) water
depth. It is expected to be tied into the latters infrastructure at a later date.
est in the shallow-water Mari-B field, the countrys first

offshore gas production facility, which it discovered in
1999 along with the Noa field. The field has had almost
100% reliability since its start-up in 2004. But the operator is closely managing its production levels at present
to conserve deliverability while it brings production
onstream this summer from its nearby Noa and Pinnacles discoveries, which should increase production by
around 150 MMcf/d of gas during the latter half of this
year to a total field output of more than 300 MMcf/d.
Nobles first phase of its Tamar field the largest
deepwater gas field discovered globally in 2009 will
eventually deliver around 700 MMcf/d by mid-2013.
The project is on schedule, development drilling has
been completed, and final well completions will con-
Balancing domestic and export options

The development of all these assets will be something
of a balancing act for the various participants, with the
majority of the larger field projects being developed to
initially supply growing domestic demand in Israel and
Cyprus but also incorporating combined plans for LNG
export developments.
Noble is not exactly inexperienced offshore Israel,
however; the company has been operating there with its
local partners since 1998 and has a 47% operated inter-
LEFT: The Noble Homer Ferring-
ton is in the Mediterranean Sea

drilling a wildcat well for
GeoGlobal Resources offshore
Israel.
ABOVE: The Noble Paul Romano
also is drilling in the eastern
Mediterranean for Gujarat
State Petroleum Corp. offshore
Egypt. (Images courtesy of
Noble Drilling)
99
REGIONAL REPORT:
MEDITERRANEAN
clude in 1Q 2013. Subsea pipeline installation also is

complete, and expansion of the Ashdod onshore receiving terminal is under way. Commissioning is planned
before year-end 2012, and first gas sales are pencilled in
for April 2013, just four years after its discovery. With
contracts signed with seven customers for 4.9 Tcf of the
fields reserves, the total gross revenue from the field
will total up to $33 billion.
CEO Charles Davidson said in the companys most
recent quarterly results briefing in April that Tamar was
on schedule, that a pre-FEED study for FLNG options
was nearing completion, and that it could transition to
a FEED study later this year, most likely in 3Q 2012.
Worlds largest offshore gas find

At a slightly earlier stage in the development process is
the companys giant Leviathan find, the worlds largest
offshore gas discovery in 2010 and Nobles own biggest
exploration success.
An appraisal well (Leviathan-3) earlier this year, more
than 5 km (3 miles) east of the discovery well, encoun-
tered approximately 88 m (290 ft) of natural gas pay in

multiple intervals. The probe confirmed better reservoir characteristics and gas/water contact, and the company already has project and commercial teams in place
and various field development concepts being
screened.
These include a possible FPSO for an early phase
development of the field located in the Rachel and
Amit licenses, with a number of floating production
contractors expecting the start of a prequalification
process this summer that could see a potential contract
award by mid-2013. If the FPSO project does go ahead,
the unit is expected to be a converted crude carrier
rather than a newbuild vessel that would have to handle
up to an expected 1 Bcf/d to 1.2 Bcf/d of dry gas.
There would, however, be no requirement for storage
because of the dry nature of Leviathans gas, which
would be piped directly to shore after the removal of
condensates and liquids. Leviathan sits in 1,670 m
(5,480 ft) water depth and is expected to be onstream
by year-end 2016.
Mediterranean momentum
he impressive discovery rates achieved so far by
companies exploring in the eastern Mediterranean
have spurred others into action.
Another US explorer becoming increasingly active is
ATP Oil & Gas, which was due to spud its first well in
the region in June targeting a prospect in the Shimshon
license immediately south of Noble Energys Leviathan
and Tamar fields.
ATP will operate the well with a 40% working interest
through its ATP East Med B.V. subsidiary, with its domestic partner being Isramco Negev. With preliminary
results expected in 3Q 2012, the US independent is hoping to confirm an independent reservoir engineering
evaluation from Lockwood & Associates that estimates
gross potential natural gas resources at Shimshon could
be as high as 3.4 Tcf, with a best estimate of 2.3 Tcf.
Using the Ensco 5006 rig, the well will be drilled in
1,100 m (3,600 ft) water depth, with a planned target
depth of 4,500 m (14,764 ft).
T. Paul Bulmahn, ATP chairman and CEO, recently
said in a company press release that of ATPs 26 invention and system patents and pending applications, 16
deal with deepwater natural gas development methods
and facilities, giving ATP an advantage if it secures an
exploration success with this well.
100
The company is the operator of all three deepwater

licenses it holds in Israel (Shimshon, Daniel West,
and Daniel East) and has stressed that its cost is relatively small compared to the massive potential of the
blocks, giving it the opportunity to enter a premium
area during the early stages of its exploration and
development.
Another recent arrival offshore Israel is Canadianbased independent GeoGlobal Resources Inc., which
is due to spud its first deepwater wildcat imminently
as operator. The Noble Homer Ferrington semisubmersible rig was expected to begin drilling in June in
the Sara (Block 348) license in approximately 1,350 m
(4,430 ft) water depth, with the unit to then immediately
mobilize to the Myra prospect (Block 347) to spud
another wildcat well there in approximately 1,450 m
(4,760 ft) water depth.
Due to a delay in the arrival of the rig, the Israel
Petroleum Commissioners Office granted an extension
for the start of drilling of the first well until June.
Both wells are expected to be drilled and completed
before year-end 2012, which meets the required commitments under the license terms. GeoGlobal also has
an interest in the Samuel license (Block 388) in shallower waters.
REGIONAL REPORT:
MEDITERRANEAN
The fields in the eastern Mediterranean are

ideally positioned to form the basis of a
world-class LNG hub to supply both the
European and Asian markets. Noble Energy
is evaluating both onshore and floating
LNG options for its giant discoveries,
including Leviathan (17 Tcf), Tamar
(9 Tcf), and Aphrodite (7 Tcf). (Map
courtesy of Noble Energy)
nificant LNG expertise, financial

strength, and global gas marketing
expertise.
With Israel now leading the way,
Cyprus fast emerging, and Egypts offshore sector expected to slowly build
upstream activity following the Arab
Spring, the eastern Mediterranean is
expected to establish itself as a prominent LNG hub well before the end of
this decade.
But the sheer scale of what has
been found in the eastern Mediterranean is naturally driving additional
LNG export plans, with the regions
prime location favoring access to both
the European and Asian markets.
Pre-FEED studies on various LNG
export options are under way, with
multiple pipeline-to-shore sites being
evaluated in the Mediterranean and
the Gulf of Aqaba and with a heads of
agreement also signed with the Daewoo/Hough consortium for floating
LNG options, initially on Tamar.
Recognizing the challenge of this
scale of LNG project and the importance of previous experience on similar schemes and access to markets,
Noble has begun the process of selecting a strategic farm-in partner to participate in both the upstream and
downstream aspects of the project.
Commented Davidson in the same
quarterly briefing, Domestic Israel
gas demand continues to grow, and
were evaluating options to meet that
demand. With respect to Leviathan,
were continuing our partnering
efforts. Our preferred partners are
expected to bring value through sigEPmag.com | July 2012
a;2
A
4
1
THE HEAT IS ON! illlmand \kxi-Hcat t a n l cs th

most brut al cold with up to 1,010,000 b tu, 'h of clean , dry- ,
brcathatblc , indircct -f ircd hot air. A[ 'hcthcr it 's kccping
wcllhcads fl ow i ng, curing concre t e, or sim ply creating a
11'ari'ncr ,
sa c r work,cn0rolInIC111...
I, and has the cure for the uncommon cold.

r y r.
=ff
Scan this code

with your smartphone and see why
Allmand Maxi-Heat .x
In the warmer safer- :3'
BR:
Ilm ird[
"llT
c. w t
62-1373. '4
101
international
HIGHLIGHTS
For additional
information on
these projects
and other global
developments:
READ MORE ONLINE
EPmag.com
AFRICA
Chariot lines up next Namibian wildcat

Chariot Oil & Gas Ltd. has confirmed that its wholly owned
subsidiary Enigma Oil & Gas (Pty) Ltd. has reached an
agreement with Ocean Rig UDW Inc. to use the drillers
Ocean Rig Poseidon drillship to drill a wildcat well offshore
Namibia. The Kabeljou (2714/6-1) well will target the Nimrod prospect once the drillship arrives on location in July.
The prospect is in the Orange basin in Southern Block
2714A, where Chariot has a 25% equity interest.
The Kabeljou well is expected to take approximately
two months to drill. It will be drilled 77 km (48 miles)
offshore Namibia in 360 m (1,181 ft) water depth with
an estimated total depth (TD) of 3,100 m (10,171 ft) true
vertical depth subsea.
BGs Tanzania trophy
BG Group has had more success with its latest deepwater
well 45 km (28 miles) offshore southern Tanzania, which is
23 km (14 miles) from the 4.6 Tcf Jodari-1 discovery. The
company has confirmed a fifth consecutive gas discovery
with its Mzia-1 well in Block 1 that has the potential to act
as a future production hub. The well, which was drilled in
1,639 m (5,378 ft) water depth, is BGs first discovery
within the deeper Cretaceous section.
According to the company, Mzia-1 opens an extensive
new play fairway within the groups offshore acreage in
Blocks 1, 3, and 4, to complement the now proven Tertiary
fairway. Partner Ophir Energy has placed mean in place
resources at an estimated 3.5 Tcf with significant potential
upside. Preliminary evaluation of the results indicates 55 m
(180 ft) of natural gas pay within a 178-m (584-ft) gas-bearing column in good-quality sands.
Ghana grants Tap Oil extension
Tap Oil Ltd. has been granted a one-year extension by the
Ghana Ministry of Energy on its initial exploration period
for its offshore Accra contract area. The initial period will
now end on September 23, 2013, by which time a commitment well must be drilled. Tap says new 3-D seismic was
acquired over the deepwater part of the permit area in
early 2011, and interpretation of the data indicates multiple large prospects within both the post-rift Upper Creta102
ceous fan sands (the same play type as the Jubilee field)
and pre-rift Lower Cretaceous rotated fault blocks (the
same play type as the Espoir and Baobab oil fields). To
date several prospects and leads have been mapped and
have unrisked prospective resources of more than 3 Bbbl.
Anadarko ups Mozambique reserves by 20 Tcf
Anadarko Petroleum has increased its recoverable reserves
for its giant field complex offshore East
Africas Mozambique
by up to another 20
Tcf of gas. The company reported that the
deepwater Golfinho
exploration well discovered a new, major
natural gas accumulation approximately 32
km (20 miles) northwest of the Prosperidade complex in the
Rovuma basin. The
discovery well hit more The Golfinho discovery well was
drilled to 4,537 m (14,885 ft) TD in
than 59 m (193 net
approximately 1,000 m (3,000 ft)
feet) of gas pay in two
water depth. (Map courtesy of
high-quality
Oligocene fan systems. Anadarko Petroleum)
The Golfinho discovery, which is entirely contained within the Offshore Area 1
block, has added an estimated 7 Tcf to more than 20 Tcf of
incremental recoverable resources over a significant areal
extent, according to Bob Daniels, Anadarko senior vice
president, worldwide exploration.
Giant ultra-deepwater find in offshore Mozambique
Eni has confirmed another giant ultra-deepwater gas discovery in the East African exploration hotspot of Mozambique, extending its estimated total reserves in place for
the Mamba complex to as much as 52 Tcf of gas. The operator said the Coral-1 exploration well in the southern part
of Area 4 is estimated to contain 7 Tcf to 10 Tcf of gas in
place. With these new results at Coral-1, the company also
estimates resources exclusively in Area 4 range between 15
Tcf and 20 Tcf of gas in place, which further increases the
total potential of Enis Mamba complex in the offshore
Rovuma basin to between 47 Tcf and 52 Tcf of gas in place.
The well, which is 65 km (40 miles) off the Capo Delgado
coast in 2,261 m (7,418 ft) water depth, reached TD of
4,869 m (15,975 ft) and encountered a total of 75 m (246
ft) of gas pay in single, high-quality Eocene sand.
international
HIGHLIGHTS
MIDDLE EAST
SOUTH AMERICA
Israel potential draws interest

On the back of major finds made by Noble Energy and ATP
in the Eastern Mediterranean Sea, interest in the areas
potential has been substantially heightened. Exploration
outfit Israel Opportunity has reported it has potentially 6.7
Tcf of natural gas and 1.4 Bbbl of oil within its Pelagic fields
offshore Israel, with a relatively high probability for geological success. The estimate comes from a resources report by
Texas-based petroleum consultants Ryder Scott that covers
five different as-yet-undrilled sites about 170 km (106 miles)
offshore. Israel Opportunity has a 10% stake in the licenses,
with the field operator AGR of Norway holding 5%. Israeli
billionaires Benny Steinmetz and Teddy Sagi each control a
42.5% stake. The consortium hopes to begin drilling at the
first Pelagic site in 4Q 2012.
Brazil block a boon for Repsol consortium

Repsol Sinopec Brasil and partners Statoil and Petrobras
plan to further appraise deepwater exploration block BMC-33 in the southern Campos basin offshore Brazil after
confirming the block holds reserves that make it one of
the worlds top five finds so far in 2012. The company
announced that well 1-REPF-12D-RJS, where the discovery
of a new presalt hydrocarbon reservoir was recently
announced, has indicated estimated recoverable volumes
of more than 700 MMbbl of oil and 3 Tcm of gas (equivalent to 545 MMbbl) in the block. The well, Po de Acar,
which is 195 km (121 miles) from the coast of Rio de
Janeiro state, was drilled in approximately 2,800 m (8,187
ft) water depth, encountering a hydrocarbon column
around 500 m (1,640 ft).
CENTRAL ASIA/PACIFIC RIM

Condor taking flight in Kazakhstan
Condor Petroleum has reported that its Shoba-6 appraisal
well in the Zharkamys West 1 Contract Territory onshore
Kazakhstan has encountered 19 m (62 ft) of net oil pay
and 10 m (30 ft) of net gas pay within the Triassic. A new
oil zone in the Basal Jurassic also has been interpreted
from petrophysical analysis with 3.5 m (11.5 ft) of net pay.
Production casing has been set, and the well is scheduled
to be produced as part of a trial production phase, which
is expected to start in 3Q 2012. Additionally, the Shoba 9
well has hit 3 m (10 ft) of net oil pay within the Triassic.
Production casing has been set, and the well is scheduled
to be flow tested once regulatory approvals are obtained.
One further Shoba appraisal well will be drilled this year,
along with up to 10 exploration wells targeting multiple
play types and depths.
BHP gets Philippines extension
The Philippines Department of Energy has approved a
request from BHP Billiton for a years extension for a frontier deepwater permit offshore the Philippines. The extension to the current Exploration Sub-Phase 4 of Service
Contract (SC) 55 to August 5, 2013, was revealed by BHPs
joint venture partner Otto Energy. The revised permit timing means the operator has until August next year to find
an ultra-deepwater rig to drill one wildcat well in the
license. It has to drill a further well in Sub-Phase 5 by
August 2014. BHP requested the extension to secure an
appropriate rig with specialized well control equipment
that will promote safe drilling operations on the proposed
Cinco prospect within SC 55, Otto reported in a statement.
Operator looks to exit Cuban offshore

Repsol YPF might exit Cubas deepwater sector after the disappointment of its second wildcat well in the islands frontier Caribbean waters.
Repsol chairman Antonio
Brufau was quoted as saying
it was almost certain the
company would not drill in
Cuba again, where it has
spent an estimated US $150
million. The operator began
drilling the well in February
about 50 km (31 miles)
north of Havana using
Repsol has been drilling in Cuba
Saipems Scarabeo 9 rig.
A separate deepwater well for 12 years, but after two dry
is under way north of Cubas holes, it is likely the company will
retire the region. The US Geological
Pinar del Rio province and
Survey estimates the countrys
about 161 km (100 miles)
west of Havana and is being reserves at close to 5 Bbbl. (Map
courtesy of Repsol YPF)
drilled by Petronas in partnership with Gazprom using
the Scarabeo 9 rig. Following this well, there is a further
option for Petrleos de Venezuela SA to use the rig to drill
a well to the west of the Petronas prospect.
Bem-te-vi hub plans on track
Petrobras and its partners are expected to proceed with
plans for a new floating hub production facility centered on
one of the consortiums major ultra-deep Santos basin presalt discoveries following the results of its latest appraisal
well. The facility is likely to be sited centrally on the Brazilian operators Bem-te-vi field.
103
international
HIGHLIGHTS
The latest test data from the Carcar prospect in Block

BM-S-8 via well 4-SPS-86B (4-BRSA-971-SPS) have reinforced the quality of the discoverys oil, with a continuous
oil column of 171 m (561 ft) in reservoirs of excellent
quality. New oil samples of approximately 32API were
collected from reservoirs at depths to 5,910 m (19,391 ft),
also confirming the continuity of the discovery first
reported earlier this year. The well, located 232 km (144
miles) off So Paulo state in 2,027 m (6,651 ft) water
depth, is being drilled using the Sevan Driller rig.
NORTH AMERICA
Spartacus loses battle
An exploration well drilled on Anadarko Petroleums
Spartacus prospect in Walker Ridge Block 794 in the Gulf
of Mexico (GoM) has come up dry. Ernie Leyendecker,
vice president, exploration, told analysts in an energy webcast that the companys net cost was approximately US $20
million, so (its) exposure was relatively small. The well
was targeting subsalt layers near the operators Lucius
project, which is currently under development. Anadarko
is planning to drill up to eight exploration and appraisal
wells in the GoM by year-end 2012.
TGS kicks off WAZ shoot
TGS is acquiring a 3-D multiclient wide azimuth (WAZ)
survey covering more than 3,500 sq km (1,351 sq miles) in
the deepwater GoM. The survey, Independence WAZ 3-D,
continues the companys Constitution group of WAZ projects, including Freedom, Liberty, and Justice, which
together total 27,622 sq km (10,664 sq miles) in the GoM.
The new seismic data are being acquired by a four-vessel
WAZ fleet and will be processed by TGS, with preliminary
products expected to be available in 4Q 2012 and a final
processed product expected in 2013.
Central GoM sale lined up
At press time, Central GoM Lease Sale 216-222 was
expected to take place June 20, making available all
unleased areas in the planning area offshore Louisiana,
Mississippi, and Alabama, including 7,276 blocks covering
38.6 million acres. The Bureau of Ocean Energy Management (BOEM) estimates the sale could result in the production of more than 1 Bbbl of oil and 4 Tcf of natural
gas. The blocks are located from 5 km to approximately
370 km (3 miles to 230 miles) offshore in water depths
ranging from 3 m (9 ft) to more than 3,400 m (11,115
ft). BOEM also has increased the minimum bid in deepwater from US $37.50/acre to $100/acre to ensure taxpayers receive fair market value for offshore resources and to
104
provide leaseholders with additional impetus to invest in

leases they are more likely to develop.
EUROPE
Premiers Carnaby catch in UKCS
Premier Oils latest North Sea exploration well has hit oil,
with the find likely to be part of the operators overall
development plans for its Catcher field. The Carnaby
exploration well 28/09-5A (Premier stake 50%) reached
1,431 m (4,695 ft) TD and encountered 15 m (51 ft) of net
oil in the main Tay sandstone within an estimated 26-m
(86-ft) oil column. A core was taken and confirmed oil in
excellent-quality sandstones, according to Premier. Pressure data and sampling indicate the oil is 24API and of
similar quality to that established at the nearby Catcher discoveries. The well will be plugged and abandoned ahead of
the rig moving to drill the high-risk Coaster prospect on
Block 28/10a, immediately east of the Catcher acreage.
Record number of UK block bids received
Bids were received for more than 400 blocks in the UKs
27th offshore licensing round from oil and gas companies
looking to bolster their UK North Sea portfolios amid government efforts to improve the sectors fiscal terms and
stability. There was substantial interest in frontier licenses,
most of which are in the West of Shetland area. A total of
224 applications were submitted to the UK government,
with applications covering 418 blocks out of the 2,800
offered in the round. The number of applications is the
highest ever received for an offshore round in the UK
since the licensing process was launched in 1964. The bidding round saw 192 applications for traditional licenses;
25 for promote licenses; and seven for frontier licenses,
which can be licensed for six or nine years.
North Sea survey expands to West of Shetland
TGS has started the acquisition of a 3-D multiclient survey
covering 3,210 sq km (1,239 sq miles) in the Erlend basin,
West of Shetland. This is the first multiclient survey in the
basin and builds on the improved imaging shown by the
reprocessed TGS North Sea Renaissance 2-D data. The survey also covers open blocks that were offered in the UKs
27th licensing round. The new 3-D data expands on TGS
Northern North Sea 3-D survey, making a total contiguous
volume exceeding 10,000 sq km (3,861 sq miles). The contractor has chartered the M/V Polarcus Samur vessel for the
first phase of the acquisition. The remaining acquisition
will be completed during the 2012 season by the M/V Polar
Duchess, already on charter to TGS. Processed data will be
available for delivery and licensing in 2Q 2013.
HART E N E R G Y
HARTENERGYSTORE .com
g riaye r
g
r e r vurEn
- _
into LIauIas-rIc n n ays

- -
- - -
- -
-- - -
- - -- -- -- ------
Liquids-rich Map Package

Spotlig hts the top liquids-rich plays. Includes maps for
Utica, Marcellus, Bakken,Eagle Ford, Niobrara, Permian
^0
Basin and our North American Unconventional: Top 20

Liquids- Rich Plays map.
tz
Map Hig hlights:

Top producing wells and their operators
Activity details and rig count
Gas pipelines and infrastructure
Isopachs
Strati graphy
/4 4
.......
Reservoir visualization
- -
- -
Top Se ller,,
- - - -
pur hn
- - -
Utica Shale Package
N.A. Unconventional Yearbook

Eagle Ford Directory
Permian Basin Package
Natural Gas Data & Map Book
- - -
. . .m aw- vm - %4117_
RTENER GYSTORE.com :
ail custserv@hartenerg r.com
----------
III- 7_ 1
Other items of interest:

r
EP
T
IL
l w
6111161
Advances in
Drilling
Global Shale
Oil Study
Marcellus Shale Map
U.S. and Brazil

Ethanol Outlook
Bakken Quarterly
Report
on the
MOVE
People
John Tintera, former executive director of the Texas Railroad Commission,
has joined the Texas Alliance of Energy
Producers regulatory compliance team
in Austin, Texas, as an environmental
and technical consultant.
UniversalPegasus International has named Philip
Luna (left) CEO. Interim
CEO Bob Deason will
remain as executive chairman of the board.
The board of RigNet Inc. has elected
James H. Browning as nonexecutive
chairman.
Geokinetics has appointed David J.
Crowley to the position of president
and COO.
Earl Sebring has assumed the role of
interim president at Cross Border
Resources Inc.
Recovery Energy Inc. has elected D.
Kirk Edwards to the companys board.
as chief software architect and lead

developer, SIGMA3 Integrated Reservoir Solutions.
Knight Oil Tools
has promoted
Chris Rosson
(left) to global
business manager
and Greg Zaunbrecher (right) to assistant global business manager.
InterAct Activity Management Ltd., an
Acteon company, has enhanced its
abandonment engineering skills base
with the addition of Dave Barclay,
Allen Scoging, and Juliann Canty.
Kirk Kinnear has been appointed vice
president, oil marketing logistics, at
Continental Resources Inc. Jeff Hume,
president and COO, will assume the
role of vice chairman, strategic growth

initiatives, and Rick Bott will succeed
Hume as president and COO.
Kumar Laxshimalla (left)
has been named process
engineering manager at
IMV Projects, a Wood
Group company.
Environmental Drilling Solutions LLC has named Jason
Knowles (right) area operations manager, Wyoming.
Daniel Trad, research advisor at the
CGGVeritas Calgary processing and
imaging center, has been distinguished with the inaugural 2011
CSEG Technical Achievement
Award Citation for his work on
5-D interpolation.
Expansions
Castrol Offshore has begun offering
regionally managed branded products,
expertise, and specialized resources
through distributor Rahimafrooz, headquartered in Dhaka, to support the

power and oil and gas E&P industries.
Warren Resources Inc. founder Norman F. Swanton has stepped down as

board chairman, CEO, and a member
of the board.
Armada Oil Inc.
has appointed
Eric Wold, (top
left) CFA; Kenneth T. Hern,
(bottom left); and Will E.D.
Matthews to its board. Additionally, Rhonda B. Rosen
(right) has been appointed
CFO.
Peter N. OConor has joined SIGMA3
as senior director, business development; Francois Lafferriere as director,
business development; and Sean Spicer
106
Seatronics, an Acteon company, has continued its three-year expansion plan by

opening a new office in Maca, Rio de Janeiro. (Image courtesy of Seatronics)
on the
MOVE
aw"
MARKETING | SALES | CIRCULATION
Group Publisher
RUSSELL LAAS
Tel: 713-260-6447
rlaas@hartenergy.com
Associate Publisher
DARRIN WEST
Tel: 713-260-6449
dwest@hartenergy.com
United States
Canada / Latin America
1616 S. Voss Road, Suite 1000
Houston, Texas 77057 USA
Tel: 713-260-6400
Toll Free: 800-874-2544
Fax: 713-627-2546
Regional Sales Manager

JULIE B. FLYNN
Tel: 713-260-6454
jflynn@hartenergy.com
Regional Sales Manager

HENRY TINNE
Tel: 713-260-6478
htinne@hartenergy.com
Advertising Sales Representative
ffA has expanded its operation into

Brazil and has opened an office facility in Rio de Janeiro.
Aker Solutions plans to build a new
engineering hub in London, which
the company expects will create 1,300
new jobs by 2015.
TAM International Inc. has established a new Canadian regional
headquarters that houses a manufacturing, service, and training facility
in Calgary, Alberta.
Ocean Installer has opened a UK
office in Aberdeen, Scotland, offering full subsea services.
DAVID HOGGARTH
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
dhoggarth@hartenergy.com
Advertising Coordinator
CAROL NUNEZ
Tel: 713-260-6408
cnunez@hartenergy.com
Fiberspar Corp. has broken ground

on a new sales and manufacturing
center in Johnstown, Colo., to serve
the Bakken, Niobrara, and other oil
National Oilwell Varco has completed and gas markets in the Rockies
region.
the purchase of Canada-based EnerADVERTISER INDEX
Allmand Bros. . . . . . . . . . . . . . . . . . . . . . 101
Metallic Building Company . . . . . . . . . . . 37
Archer Well Company Inc. . . . . . . . . . . . . 39
Mewbourne College of Earth & Energy . . 11
Baker Hughes Incorporated . . . . . . . . . . 35
M-I Swaco . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Cameron . . . . . . . . . . . . . . . . . . . . . . . . . IFC
Momentive . . . . . . . . . . . . . . . . . . . . . . . . 57
Checkers Industrial Safety Products . . . . 59
National Oilwell Varco . . . . . . . . . . . . . . . 30
Complete Production Services . . . . . . . . 83
New Energy Connections . . . . . . . . . . . . 41
Discovery Acquisition Services
. . . . . . . 67
Dragon Products, Ltd. . . . . . . . . . . . . 2, 3, 21
Subscription Services
E&P . . . . . . . . . 53, 58, 65, 71, 96, 97, 105 IBC
E&P
1616 S Voss Road, Suite 1000
Houston, Texas 77057
Tel: 713-260-6442
Fax: 713-840-1449
custserv@hartenergy.com
Emerson . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
List Sales
Newpark Drilling Fluids . . . . . . . . . . . . . 26

NSC-Tripoint . . . . . . . . . . . . . . . . . . . . 45-47
Oilfield Improvements . . . . . . . . . . . . . . . 93
Precision Geophysical . . . . . . . . . . . . . . . 61
Expro Group . . . . . . . . . . . . . . . . . . . . . . . 49
Falcon Technologies . . . . . . . . . . . . . . . . . 51
Flotec Industries . . . . . . . . . . . . . . . . . . . . 69
Forum Energy Technologies . . . . . . . . . . 87
MICHAEL AURIEMMA
Venture Direct
212.655.5130 phone
212.655.5280 fax
mauriemma@ven.com
R360 Environmental Solutions

Inc. has acquired privately owned
Prairie Disposal Inc. (PDI), marking
the companys entry into North
Dakotas Williston basin. The PDI
facility is equipped with an E&P
waste disposal facility capable of
accepting solid waste and a hightech fluids processing plant to
process E&P liquids such as spent
drilling fluids and flowback.
Cudd Energy Services has relocated

its corporate headquarters to The
Woodlands, Texas.
ERIC MCINTOSH
Tel: 713-260-6471
emcintosh@hartenergy.com
Sales Manager
Eastern Hemisphere
flow Industries Inc. to expand the

companys well intervention and
stimulation equipment offerings
with Enerflow locations in Calgary,
Alberta; Tulsa, Okla.; and Houston,
Texas.
Frac Chem
. . . . . . . . . . . . . . . . . . . . . . . . 28
R360 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Repsol . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Schlumberger . . . . . . . . . . . . . . . . . . . 5, BC
Seaway Heavy Lifting . . . . . . . . . . . . . . . . 85
Frontier Energy Group, Inc. . . . . . . . . . . . 73
Society of Petroleum Engineers . . . . . . . 38
Fugro Jason . . . . . . . . . . . . . . . . . . . . . . . . 66
TAM International . . . . . . . . . . . . . . . . . . . 15
Great Wall Drilling Company . . . . . . . . . 24
Taylor Valve Technology . . . . . . . . . . . . . . 59
Halliburton . . . . . . . . . . . . . . . . . . . . . . . . . 6
TrueNorth Steel . . . . . . . . . . . . . . . . . . . . 75
ION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
United Electric Controls . . . . . . . . . . . . . 55
J&J Truck Bodies & Trailers . . . . . . . . . . . 43
Weatherford International, Ltd. . . . . . 22, 23
107
last
WORD
Curbing perception
by telling the truth
It is time to have an honest conversation with the environmentalists.
Eli Gruber, Ecologix Environmental Systems
o date, mainstream media has managed to paint

hydraulic fracturing as dangerous and environmentally irresponsible. Those same media avenues report
that most of the general public shares the same sentiment. Investigative reports continually bring to light
some correlation between injection wells and increased
seismic activity. This steady drip of negative publicity
feeds fractivists all the fuel they need to take their
concerns to government representatives and shut down
natural gas exploration in their districts.
The reason all this is occurring can be attributed to a
lack of leadership in the industry and an epic failure in
garnishing public trust. It is time the real stakeholders
in the oil and gas industry share the truth and curb
public perception.
Mark Boling, an executive vice president at Southwestern Energy Co., said, We have been so focused as an
industry on figuring out how to crack the code and get
to these huge volumes of gas trapped in shale formations that we havent focused on the things we have to
do differently above ground. He is right. While the
industrys focal point has been subterranean, media has
had a heyday on the surface, scrutinizing the process
before it has even been defined. It is time to confound
misleading claims and take control of the conversation.
It is time to get to the truth.
Fear comes from not knowing.

The public should be allowed to know.
108
Taking control of the conversation

One of the greatest arguments against natural gas exploration is the potential of harmful substances polluting
underground water tables. Of course industry experts
understand the folly of this concern since the shale formations tapped during the hydraulic fracturing process
are typically 1,525 m to 2,745 m (5,000 ft to 9,000 ft)
below the water tables from which groundwater originates; deep injection wells extend even deeper. The root
of the concern is the nondisclosure and secrecy in the
chemical makeup of frac fluids. The public is uncomfortable with the idea that unknown substances are
being injected into the ground.
So why does the industry not tell them? Frac fluids
include water, crystalline silica, methanol, and isoproponal. Fear comes from not knowing. The public should
be allowed to know.
The next concern is with what happens to the flowback
and produced water when it comes out of the wells.
Despite accelerated growth, natural gas exploration standards are still emerging. If left in the hands of the public,
those standards will cripple natural gas production. It
behooves industry leaders to set standards that ensure
financial stability and environmental sustainability. What
can be done with flowback and produced water? Municipalities are already placing restrictions on fracing wastewater. Deep-well injection is coming under increased
scrutiny. The only other option is for operators to treat
the wastewater themselves. Then it can be reused in the
next fracturing operation. This reduces the impact on
local water resources.
Not only should industry directly address public
concern, but it needs to talk about the economic
and environmental benefits of natural gas exploration. It should tune in on the buzzwords that
garnish public support: green, sustainable, recycled. It should talk about reduced emissions from
natural gas energy. It should talk about creating millions of high-paying jobs.
This is not just a job for PR and marketing. The conversation needs to be steered to the topics that are actually based on facts. The industry should be talking about
how safe, responsible gas exploration fits in to the grand
scheme of cleaner, more prosperous living.
cam = E E
_ =
f r=
G a
North American Shale Quarterly

A 360-view of the top North American
shale plays providing for EACH play
Valuation map with acreage and well overlays

Production forecast to 2030
wn rc
Company acreage, reserves and highlights
xrr- a
'
Play economics including break-even prices per company

Infrastructure coverage: pipelines, processing plants
Key Benefits
Track development in North America ' s most active plays
Find out what companies are aggressively involved
and how their strategies compare to their peers
Receive comparisons on the data behind each shale play

Oil and gas production forecasts on an aggregated basis
Eagle Ford Production
100
1200
,000
owo
Plays Covered
Bakken/Three Forks
Horn River
Barnett
Marcellus
Montney
Cardium
Eagle Ford
Fayetteville
Niobrara
Granite Wash
Utica
Haynesville/Bossier
Woodford
0
Olh.r(.)
Pionwr N l o r
BHP WINCh apwk
IR
o4rcos
R Ilan e
An arko
- Murphy OII
CNOOC
T.1
EOG Rnounws
Permian Basin
W,
RYSIAD ENERGY
rystadenergy. com
Interested ? Contact : Dr. Michael Warren I mwa rren@hartenergy.com
Co.
PhIIIp
H A R T E N E RGY
hartenergy.com
1.713.260.6440
Petrol
MA
19
J
1
Understand what truly makes a difference in your shale development

Characterize sweet spots , quantify heterogeneity and stresses , automate pad design and well path
placement , and engineer completions to fractu re and stimulate economically-all within the industry
leading Petrel* E&P software platform .
Shale teams can see more , do more , and understand more to maximize production in shale plays.
Shared earth-critical insight.
www.s lb.com/petrel
Glo ba l Lxp ci
Innovative Technology
mpact
Schiumberger

Epm 7

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Epm 7

Загружено:

Авторское право:

Доступные форматы

EPMAG.

The clear choice for complete rig

Parts and Service

Centers close to you

rthr:staffed 5ervice:Lenters'located in every major

rbon-producing region T A t ine ns wheriyou call

fluidends andmnsumeble partsl equipment rebuilds,

EXPLORATION & PRODUCTION

COVER STORY: GLOBAL SHALE OIL REPORT

Launching the next decade of smart solutions

COST AND RISK MANAGEMENT

M&A transaction risks can hamper growth

Pore pressure monitoring optimizes

Mitigating risk a competitive advantage,

Low-impact seismic acquisition illuminates

Land technology surpasses expectations

New sonic tool matches wireline data quality

South America rising

System provides flow profiling on demand

Heavy-lift vessels tip the scales

Speed, strength, and flexibility are key

CONSTRUCTION & INSTALLATION

DIGITAL OIL FIELD

Big data elevates the game

It aint over yet

ONLINE CONTENT JULY 2012

New reservoir discovery

Three Tuscaloosa Marine shale producers

Apache plans two Cook Inlet exploratory tests

WGC 2012: Algeria prepares

The first phase of Algerias shale gas

Newbuild rigs, higher rates illustrate

Global drillship construction has reached the

Gulf Of Mexico operators navigate

With activity ramping up two years

rock telling you?

What 's your reservoir

With 570+ SmartWell

Read more commentary at

Group Managing Editor

Senior Editor, Offshore

Chief Technical Director,

Associate Managing Editor

Corporate Art Director

Reprint & PDF Sales

Director of Business Development

Editorial Advisory Board

Weve got our work

n college I learned about the hierarchy of values, in which people evolve

Technology aids fracturing success

s shale euphoria swept through the North American

Stimulation dominates spending in plays such as the Eagle Ford.

While PNP is reliable and the components are typically

Drilling is a real-time operation.

well dynamics to stay safe and

MOtion1 Accurate,continuous , real-time drilling fluid data improves drilling

approach, production casing is cemented in place before

Conventional slickwater bed load proppant transport

Slickwater with proppant transportation modifier

The disappearing ball act

Tricans FlowRider solution causes microscopic air bubbles to

adhere to sand, making it as transportable as ultra-lightweight

slower than sand and ceramics, reducing the volume