Deepwater Dual Gradient Drilling Overview

October 19th, 2011

Jasmin Begagic Business Development Manager, Transocean

Outline
Dual Gradient Drilling Definition and General Information DGD Categories Ongoing DGD Activity Benefits

Acknowledgements
Special thanks to: IADC MPD Committee IADC Dual Gradient Drilling Sub-Committee
Richard

R. Brainard, AGR and John C. Cohen, AGR Ken Smith, Chevron Kristin Falk, Ocean Riser Systems Luc de Boer, Boer Dual Gradient Systems John Kozicz, Transocean

What is Dual Gradient Drilling (DGD)?

IADC currently defines dual gradient as: the creation of multiple pressure gradients within select sections of the annulus to manage the annular pressure profile profile. Methods include use of pumps, fluids of varying densities, or combination of these Collection of techniques and varied equipment utilized to create the dual gradient pressure profile DGD is a specific type of MPD These DGD technologies are applicable offshore to either floater MODU, jack-up MODU or fixed platform facility (SPAR, TLP, etc.) application

What is Dual Gradient Drilling (DGD)?

IADC currently defines dual gradient as: the creation of multiple pressure gradients within select sections of the annulus to manage the annular pressure profile. Methods include use of pumps, fluids of varying densities, or combination of these DGD is a specific type of MPD These DGD technologies are applicable offshore to either floater MODU, jack-up MODU or fixed platform facility (SPAR, TLP, etc.) application

The Importance of Deepwater

Increasing I i Number N b of f Wells W ll Drilled in 1,000m+ WD Industry Production from DW is Moving Deeper at an Increasing Pace (Source: Chevron, Oct-07)

43% Wells in 1,000+ m WD

Data Source: Wood Mackenzie, 11-Oct-11

Source: P. Hansen, Chevron, Deepwater Technology Challenges, 9-Oct-07

Data Source: Wood Mackenzie, 11-Oct-11

52% Wells in 1,000+ m WD

Access to deepwater reserves can be challenging and Dual Gradient Drilling can help
Narrow margins between pore and fracture pressures: Well control events Ballooning (losses / gains) Excessive mud circulation time Remedial cement jobs Estimated NPT 20% - 30% of total NPT Some wells never reach targets High development costs Potential loss of leases Need for better management of wellbore pressures The Solution: Dual Gradient Drilling

7 Source: J. Keith Couvillion, Chevron, Stretching The Technology Envelope (GOM), 23-Jan-08

While regular MPD techniques may help in many cases, DGD is used to walk the line

Mudcap lets us drill this 8

Dual Gradient Drilling: Not A New Idea

Riserless Riserless mud recovery Gas Lifted Riser Pumped Riser Return

First patent in 1957 Different Motivators: Driven by rig limitations in the 50s and 60s Driven by drilling problems in the past two decades

Deep Vision

Delta Vision

Subsea Mudlift Drilling (SMD)1

(1) - Courtesy of SMD JIP / Tested on the Diamond Offshore Ocean New Era

Dual Gradient Drilling Categories

(1) Top Hole Riserless (ex: Pump and Dump) (2) Post BOP (with marine drilling riser) Dual Gradient Subsea Pump Controlled Riser Mud Level Dual Gradient / Mix Fluid using Gas Dual Gradient / Mix Fluid using Liquid / HGS

10

Source: Dual Gradient Systems LLC

Top hole riserless DGD

Alternative to traditional Pump and Dump operations Replaces riskier Riser Pin and Connector operations ti AGR offers its Riserless Mud Recovery (RMR) system for this application Proprietary IP Enabling technology Top hole riserless DGD is now maturing in the shallower water depths Good industry uptake of over 150 wells by over 25 Operators in the last 7 years Both over the side and moon pool deployment systems are available for up to 5 5,000 000 (1,500 (1 500 m) WD Includes successful applications around the world in up to 4,657 (1,419 m) WD

11 Courtesy of: AGR

RMR Benefits
Enhanced Influx/Lost Circulation Detection Faster reaction to shallow flows Flow check possible anytime Improved I d Mitigation Miti ti of f Shallow Sh ll Hazards H d Weighted mud allows drilling between pp/fp Ensures the capability to meet planned casing setting depths May enable top hole to be drilled in area of medium risks Improved HSE Reductions of discharge cuttings and drilling fluids to seabed Engineered Drilling Fluid Control of Trouble Zones through correct mud properties Closed Circulation System Provides volume control Ability to complete hole section without running out of mud Improved open hole times for sensitive formations Improved Wellbore Construction Gauge Hole - fewer washouts Improved Cement Jobs

12 Courtesy of: AGR

Presently, there are four different approaches to Post BOP Dual Gradient Drilling:

*Note: 13 These systems can be classified as, Controlled Riser Fluid Level systems under the IADC MPD Screening tool under development Source: Ken Smith, IADC Dual Gradient Drilling Workshop, May 2011

Continuous Annular Pressure Management (Transocean)

Light drilling fluid is pumped down the annulus formed between the drilling riser and an inner riser (example: 16 casing string) or using dedicated booster lines. It mixes with the return mud from the wellbore and creates a lighter density mud in the drilling riser. The mud is processed through centrifuges to separate into the light dilution fluid and the heavier drilling fluid. Installed on the Discoverer Enterprise in July 2009 / The system is ready for use on Transocean Enterprise class rigs or other rigs with some modification.

14

CAPM - Riser Degas and MPD Applications

15

Riser Degas

MPD

CAPM

US patents: 6,273,193 and 7,866,399

SubSea MudLift Drilling (GE/Hydril)

A sea-water driven positive displacement pump (MLP) is located above the BOP/LMRP. It withdraws the mud from the well and pumps it back to the surface through a line attached to the drilling riser. The riser is filled with a seawater-density fluid, or the mud/riser fluid interface can be maintained at any depth. A Subsea Rotating Device (SRD) sits above the MudLift Pump which can be used to rapidly change the pressure profile in the well.

16 Courtesy of: Chevron

Controlled Managed Pressure (AGR Subsea)

A subsea pump is suspended from the rig and placed near the seabed The pump withdraws the mud from the well above the BOP/LMRP and returns it to the rig through an external line The riser is filled with blanket fluid fluid Field trial is planned using disc pump (head-pump)

17 Courtesy of: AGR

The principle of Annular Level Control Low Riser Return System (LRRS)TM
A simple pressure controls technology
Partially filled Riser

Single Mud Gradient Top part purged with Nitrogen

The mud is withdrawn from the wellbore and returned to the rig through an external line A pump is suspended from the rig to a fixed depth in the seawater column

Mud is returned via a Subsea Mud Pump The Control System monitors the level and controls the pump BHP can be changed in minutes (instead of hours) by adjusting the level Both a Managed Pressure Drilling and a Managed Gradient Drilling system LRRS Matches the Drilling Window The system is under construction / Ready mid-2012 (est.)

The riser is evacuated and flushed with nitrogen, and t oge , a d the gas/fluid interface in the riser is managed

BHP

18 Courtesy of: Ocean Riser Systems

LRRS provides fast and efficient pressure management under complex pressure regimes

LRRS: Different Applications

LRRS ECD LRRS + LRRS HP

Water depth Well sections Well control procedures Other

All Reservoir As conventional Minimal rig integration

All Surface csg to reservoir New procedures Up scaling of ECD ECD

Deep and ultra deep Entire well (exploration) New procedures Deep water w/ smaller rigs

19 Courtesy of: Ocean Riser Systems

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Post BOP Dual Gradient Drilling Benefits

Safer wells Improved process monitoring In some cases, ability to implement Riser Degas and Managed Pressure Press re Drilling Improved Riser Margin and Kick Tolerance Reduction in Non Productive Time Improved I d wellbore llb pressure management t Reduced or eliminated mud losses Simplified well design Possibly fewer casing strings Can reach deeper targets / drill unreachable wells Development Drilling Improved drilling efficiency and well productivity Greater production NPV and lower upfront Capex

WELL CONSTRUCTION RISK Low High

Exploration

Development

Low

High

PROJECT COST

Et Etc
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