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S URFACE F ACILITY R EVIEW

For Llanito, Lisama and Provincia

December 12, 2017


Surface Facility Review for Llanito, Lisama and Provincia December 2017

©2017 Quantum Reservoir Impact LLC® (QRI®). This document contains confidential and proprietary information. Any use of this document
without written authorization from QRI is prohibited. No copies, hardcopy, electronic, or otherwise are permitted without the explicit
written approval by Quantum Reservoir Impact LLC (QRI).

Quantum Reservoir Impact®

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Houston, TX 77010

713.485.8800 Phone
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www.qrigroup.com

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Surface Facility Review for Llanito, Lisama and Provincia December 2017

CONTENTS
1 Surface Facility Review for Llanito, Lisama and Provincia ..........................................4
1.1 Executive Summary .......................................................................................................................................................... 4
1.1.1 Llanito ...................................................................................................................................................................... 4
1.1.2 Lisama ...................................................................................................................................................................... 5
1.1.3 Provincia .................................................................................................................................................................. 5
1.2 Llanito Discussion ............................................................................................................................................................. 6
1.2.1 Observations............................................................................................................................................................ 8
1.2.2 Current Operations .................................................................................................................................................. 8
1.2.3 Future Production ................................................................................................................................................. 11
1.3 Lisama Discussion ........................................................................................................................................................... 16
1.3.1 Observations.......................................................................................................................................................... 18
1.3.2 Current Operations ................................................................................................................................................ 18
1.3.3 Future Production ................................................................................................................................................. 22
1.4 Provincia Discussion ....................................................................................................................................................... 24
1.4.1 Observations.......................................................................................................................................................... 26
1.4.2 Current Operations ................................................................................................................................................ 28
1.4.3 Future Production ................................................................................................................................................. 32
1.5 Summary ...................................................................................................................................................................... 37

LIST OF FIGURES
Figure 1: Llanito block diagram. ............................................................................................................................................... 7

Figure 2: Llanito long-term potential production forecast. .................................................................................................... 11

Figure 3: Lisama block diagram. ............................................................................................................................................. 17

Figure 4: Lisama long-term potential production forecast..................................................................................................... 23

Figure 5: Provincia block diagram........................................................................................................................................... 25

Figure 6: Provincia long-term potential production forecast. ................................................................................................ 32

LIST OF TABLES
Table 1: Llanito facility capacities with current and potential production. .............................................................................. 8

Table 2: Lisama facility capacities with current and potential production............................................................................. 18

Table 3: Lisama outlet gas composition and theoretical yield. .............................................................................................. 22

Table 4: Provincia facility capacities with current and potential production. ........................................................................ 26

Table 5: Provincia gas composition and yield. ........................................................................................................................ 31

Table 6: Provincia source wells............................................................................................................................................... 34

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Surface Facility Review for Llanito, Lisama and Provincia December 2017

1 SURFACE FACILITY REVIEW FOR LLANITO, LISAMA AND PROVINCIA


1.1 Executive Summary
The QRI team met with operations personnel in Barrancabermeja and toured the Llanito, Lisama, and Provincia
facilities from November 7 through 10. One of the purposes of the trip was to provide a high-level review of the
current surface facilities and to provide recommendations to improve existing operations, and to prepare for
future expansions at Llanito and Lisama. Raul Amaya and Leonardo Franco were extremely helpful in outlying
their concerns and providing information.

Following are several recommendations and suggestions. There is more detail provided later in this report.

Please note, this is a high-level review and further work will need to be done to further augment these
recommendations.

1.1.1 Llanito

At Llanito, the primary concerns were the elimination of surface-produced water disposal and flaring, and the
need to prepare the field for the upcoming drilling and waterflood expansion program. Following are some of the
opportunities as a result of the expansion:

Current Operations:
▪ Investigate the problem with the oil transfer pumps at Tres, Nororiental, and Gala stations.
▪ Reduce the formation of CaCO3 with either chemicals or a water softening unit.
▪ Use Rydlyme™ to safely remove the existing calcium carbonate in the compressor water cooling systems.
▪ Improve availability of the current reciprocating compressors by:
o Replacing valves and governors on existing compressors if not the latest technology.
o Upgrading Computerized Maintenance Management System (CMMS).
o Enhancing preventative maintenance (PM) program.
o Identifying and locally stocking critical spares.
▪ Inject all surface water into existing injection wells at Galan and/or Nororiental.
▪ Plans should be developed to eliminate open water treatment pits and replace with tanks.
Future Operations:
▪ Replace existing 6” crude transmission line with 10” to handle future capacity.
▪ Add two crude transfer pumps and increase stock tank size at Galan.
▪ Add another bulk separation and an extra crude transfer pump at Nororiental, Tres Llanito, and Gala.
▪ Add three heater treaters and two inlet pumps at the dehydration plant to accommodate more BFPD.
▪ Eliminate future flaring by:
o Installing gas-driven generators to power all injection pumps and sell surplus electricity on the grid.
o Installing gas-driven (turbine) centrifugal compressors for future gas compression needs.
▪ Equip new centralized water treatment/injection facility with:

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o Media filters with automatic backwash (like at Nororiental).


o Flotation cell to remove oil and finer solids (take this under consideration).
o Electric motor driven multi-stage centrifugal injection pumps.

1.1.2 Lisama

At Lisama, the primary concerns are the shared pipeline with Occidental, the presence of paraffin, and the
addition of new producers. Following are some of the current and future opportunities as a result of the new
producers:

Current Operations:
▪ Continue investigating the option of using an abandoned 8” gasoline line to the refinery, since sharing of
the 12” pipeline is suspect.
▪ Run GAP model to challenge the estimated 48,000 BOPD limitation on the 12” line to the refinery.
▪ Reduce the formation of CaCO3 with chemicals or a water softening unit.
▪ Use Rydlyme™ to safely remove the existing calcium carbonate in the compressor water cooling systems.
▪ Improve availability of the current reciprocating compressors by:
o Replacing valves and governors on existing compressors if not the latest technology.
o Upgrading Computerized Maintenance Management System (CMMS).
o Enhancing PM program.
o Identifying and locally stocking critical spares.
▪ Plans should be developed to eliminate open water treatment pits at the Lisama dehydration plant and
replace with tanks.
Future Operations:
▪ Install an additional crude transfer pump at Tesoro.
▪ Install two additional inlet pumps at dehydration plant.

1.1.3 Provincia

At Provincia, the primary concerns were sand production, the shared crude pipeline, gas lift, compressor
efficiency, and the gas plant efficiency. Future concerns will be oil, water, and gas because of the expansion.
Listed below are some of the opportunities as a result of the new producers:

Current Operations:
▪ Treat Provincia vessel cleaning as a PM and clean all vessels at 2 to 3 year intervals.
▪ Ensure the current ultrasonic testing (UT) program on the surface piping is as thorough as it needs to be.
▪ Run GAP model to determine the effective capacity of the 8” oil transmission line. The maximum capacity
of 15,000 B/D seems unusually low.
▪ Install two injection pumps at Suerte and Santos and have two disposal wells to eliminate surface disposal.
▪ Develop plan to eliminate open water treatment pits at Suerte and Santos and replace with tanks.

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▪ Run gas lift simulation on PROSPER™ model to determine optimum lifting GLR and reduce gas lift to
selected wells.
▪ Continue development of method to determine which wells are lifting at depths higher than designed by
using PROSPER™.
▪ Improve availability of the current reciprocating compressors by:
o Replacing valves and governors on existing compressors if not the latest technology.
o Upgrading Computerized Maintenance Management System (CMMS).
o Enhancing PM program.
o Identifying and locally stocking critical spares.
▪ Reduce the formation of CaCO3 with chemicals or a water softening unit.
▪ Use Rydlyme™ immediately to remove the existing calcium carbonate in all the compressor water cooling
systems.
▪ Improve the efficiency of C3 and iC4 recovery at the Provincia gas plant by:
o Conducting pressure drop/temperature survey throughout plant.
o Focusing on collapsed trays in contactor and inefficient cooling.
o Considering the use of a turbo-expander to further reduce cooling below design.
▪ Consider diverting butane from the existing line to the refinery and mixing it with the crude.
Future Operations:
▪ Install a new 12” pipeline to the refinery.
▪ Focus on getting more accurate gas and produced water forecasts as soon as possible.
▪ Add two transfer pumps and another heater treater at Suerte.
▪ Add a bulk separator and heater treater at Santos.
▪ Install a single water injection facility that will:
o Use electric motor-driven multi-stage centrifugal pumps for injection.
o Use media filters that can be backwashed automatically.
o Provide options for the installation of turbine driven generators for power (possibility to sell power
on grid)
o Use a flotation cell for oil and fines removal.
▪ Based on economic evaluation, consider construction of new compression facility with:
o Electric motor-driven centrifugal compressors.
o Turbine-driven generators for power (option to sell power on grid).
▪ Expand capacity of existing gas plant by at least 50 MMscf/D at Suerte.

1.2 Llanito Discussion


Figure 1 is a simplified block diagram of the Llanito Field with the primary oil/gas/water flow streams. The field
consists of four production stations (Nororiental, Trees Llanito, Gala, and Galan) as well as a dehydration plant,

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compression plant and a pilot water injection facility. Oil from the Nororiental station is pumped into the 6” line
to the Galan dehydration plant. The Tres Llanito and Gala stations are also tied into this 6” line downstream from
Nororiental. At the dehydration plant, the crude from all four Llanito stations is further treated and pumped to
the refinery in Barrancabermeja. Free water separated at the Nororiental station normally goes to the Tres Llanito
station. The combined produced water from Nororiental and Tres Llanito can either go to the Galan Dehydration
plant or to the Gala station. Water from the Gala station is pumped to the dehydration plant. The produced water
from Nororiental, Tres Llanito and Gala is further treated at the dehydration plant and then either pumped into
injections wells through the PTARI-221 facility, or disposed into the Magdalena River. Produced water is also
treated at Nororiental and injected into up to three pilot injection wells. Gas from the four Llanito stations is
directed toward two compressors where it is then sold and delivered to the refinery.

Figure 1: Llanito block diagram.

On November 7, 2017, the QRI team met with the operations personnel at the Barrancabermeja refinery. That
afternoon, we toured the following facilities in the Llanito Field.
▪ Galan Collection Station
▪ Dehydration Plant
▪ Nororiental Collection Station
▪ Pilot Injection Facility
The purpose of this site visit was to witness the facilities in operation, talk with operations personnel in the field,
and then to identify potential bottlenecks or opportunities in Llanito. The waterflood expansion plan is based on
the outcome of the first phase of the study submitted to Ecopetrol and calls for the drilling of up to 84 producing
wells, 39 workovers and re-perforations, 75 injectors, and 32 source wells. The increased production and
injection will significantly impact the existing operations in Llanito.

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Surface Facility Review for Llanito, Lisama and Provincia December 2017

Table 1 shows the current equipment capacities and current oil, gas, and water production rates. It also includes
estimates of the maximum production potential if the Llanito infill and waterflood expansion (Figure 2) is adopted
by Ecopetrol in their business plan.

Llanito
Total Rated Capacities Current Production Potential Maximum Production
Facility Equip Units
BOPD BWPD BFPD MSCF/D BOPD BWPD BOEPD MSCF/D BOPD BWPD BOEPD MSCF/D
Bulk Sep 1 9,000 15,000 1,198 3,790 1,262 370 5,911 8,754 6,226 1,826
al

Test Sep 2 4,400 9,000


nt
rie

Pumps 2 10,560
ro
No

Pumps 2 5,000 (Inj) 2,500 (inj)


Bulk Sep 1 11,200 ? 981 3,094 1,235 1,472 4,840 7,952 6,093 7,263
to
i
lan

Test Sep 2 6,000 2,000


L
es

Pumps 2 14,400
Tr

Bulk Sep 1 11,200 18,000 1,239 3,559 1,277 222 6,113 8,584 6,302 1,095
Test Sep 2 6,000 4,000
la
Ga

Pumps 2 18,377
Bulk Sep 1 4,000 500 785 1,058 786 4 3,873 4,149 3,877 20
lan

Test Sep 4 3,200 800


Ga

Pumps 2 5,485
Pumps 21,600
n
io
at

Treaters 2 20,000
r
yd

Pumps 2 13,680
h
De

Compressors 2 4,200
Total 4,203 11,501 4,560 2,068 20,738 29,441 22,500 10,204

Table 1: Llanito facility capacities with current and potential production.

1.2.1 Observations

Management has a good understanding of where the opportunities lie, and were primarily looking for a fresh set
of eyes. Security at the facilities was thorough and consistent. The housekeeping was very good. Good
housekeeping is an indicator that the operations personnel take pride in their facility and there is a culture of
safety. The facilities were large enough to accommodate a significant amount of expansion if required.

It did not appear there would be any bottleneck issues with the gathering system. For the most part, the
individual flowlines are 3”, which can easily accommodate the expected flow rates (less than 4,000 BFPD per
well). This is certainly true with the wells being produced using rod pumps (up to 800 BFPD), and will also be true
for the wells converted to ESPs (600 to 3,000 BFPD). The design of the remote manifolds currently in use in Llanito
also minimizes pressure drops and allows for individual well testing.

1.2.2 Current Operations

Crude Oil
At the current crude production rate of 3,400 BOPD from the Nororiental, Tres Llanito, and Gala stations, there
doesn’t seem to be any issues on the crude handling side as far as processing the oil. As mentioned earlier, there
doesn’t seem to be any problems with the gathering system. There is ample volume with the separators and
crude transfer pumps at these stations.

There is a concern with the 6” crude trunk line running from these stations to the Galan dehydration plant. These
stations produce 3,400 BOPD and the capacity of a 6” line is in the range of 15,000 to 18,000 BFPD; yet the
operators find that they cannot simultaneously pump oil to the dehydration plant without causing interference
with the transfer pumps from the other stations. They are basically pumping one station at a time into the 6”

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crude pipeline. This indicates there can already be some capacity restrictions if the instantaneous pump rates
from multiple stations can interfere with others. The discharge pressure of the transfer pumps at Nororiental is
180 psi, at Gala it is 422 psi, and is unknown at Tres Llanito. It seems strange to have the highest discharge
pressure pumps at the facility closest to the dehydration plant and the lowest pressure pumps at the facility
furthest away. These pumps need to be investigated because it should not be difficult to pump 3,400 BOPD into a
6” line. The solution could be as easy as restricting the discharge of the higher pressure rated pumps at Gala so
that their discharge pressures are more in line with Nororiental.

Produced Water
The most obvious bottleneck with produced water handling is that Colombian law will no longer allow for the
disposal of produced water to the surface. Llanito is currently producing a total of 11,500 BWPD. Approximately
5,000 BWPD is currently being pumped into six water injection wells. The remaining 6,500 BWPD is being disposed
into the river. Effective in October 2018, the government will not allow this practice to continue. Ecopetrol will
likely be given an extension to continue this practice with the proviso that the company has plans in place for
eliminating surface disposal.

The only effective way to eliminate disposing produced water on the surface is to inject it. It can either be injected
into disposal wells (into non-producing formations), or into the Llanito producing reservoirs. Disposal wells are
often used because they are cheaper to drill and complete, and there is not as much concern about the water
quality. This is not recommended. It is far better to inject the water in the producing formations.

Produced water is an under-appreciated resource. It is estimated that for every 4 to 5 barrels of water injected
into the producing formation, an incremental 1 barrel of oil is produced that would not have been produced
otherwise. This ratio proves that water injection is actually a critical component in the profitability of a field.
Throwing away this resource by injecting it into disposal wells, or to surface disposal, is not a good strategy.

The best strategy is to inject the produced water into the producing formations. Currently, approximately 2,500
BWPD is being injected from the pilot at the Nororiental station and another 2,500 BWPD from the PTARI-221
facility at Galan. The capacities at both facilities are 5,000 BWPD, as determined by the injection pumps. If it is
possible to inject a total of 6,500 BWPD at the leased PTARI-221 facility, then that is the way forward. The
Nororiental pilot should inject the maximum 5,000 BWPD. If the PTARI-221 facility is truly limited to 5,000 BWPD,
the then remaining 6,500 BWPD should be injected at Nororiental. The water supply would come from the
Nororiental and Tres Llanito stations. This would require the installation of an additional injection pump that
could either be leased or purchased.

This is really a stop gap solution to eliminate surface disposal until the new water injection facility is built as part
of the waterflood expansion program. Fortunately, both current injection facilities have good solids removal
capability.

Another potential problem with the current produced water system is that open pits will likely not be allowed in
the future. There are currently open pits being used as part of the water treatment process at all four stations and
the Galan dehydration plant. There needs to be a plan to phase out these pits and replace them with settling
tanks at the stations and CPIs (corrugated plates). It is OK to have lined emergency pits. Admittedly, this will be
costly. It is possible the cost of these upgrades could be included in the waterflood expansion AFE. An interim
suggestion for these pits until they are removed would be to fence them in as an added safety measure, and to
install streamer flags on top of the pits to discourage birds from landing.

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Produced Gas
Total gas production from Llanito is currently about 2.1 MMscf/D, according to the well tests. The Llanito Field is
currently utilizing produced gas to fuel natural gas driven engines on pumps, compressors, and generators.
Produced gas is also being used as pilots in several of the Llanito flare stacks. Also, some low-pressure gas is being
provided to the community. At the same time, gas is being compressed and sold to the refinery. This is stretching
2.1 MMscf/D too far.

The total gas production from Llanito is assumed to be higher than is actually being reported. This is not an
uncommon problem. Gas is being measured using orifice meters on the test separators in Llanito, which is an
acceptable method of measurement, but not very accurate. The orifice plates wear over time, especially if sand is
present like in Llanito. If not replaced frequently, they will erode and measured gas production will be less than
actual. Also, different sized plates are required for different flow rates and there is a wide range of flow from the
Llanito wells. It is doubtful that these are being changed every time to reflect different gas rates. Orifice meters
are okay, but can be a little maintenance intensive. There are more accurate meters on the market, of which the
Coriolis (mass) meter is probably the most accurate, but these are expensive and often hard to economically
justify, especially as a test meter. Turbine meters are a good alternative to orifice meters. They are relatively
inexpensive and require less maintenance, and can be used on test separators because they have more range.
Another option that I have used are ultrasonic meters to measure gas. The advantage of these are they can be
strapped on outside of the pipe. I used them to troubleshoot and to determine where metering problems might
exist. The disparity in measured and used gas volumes in Llanito are likely not worth the effort. The gas balance is
likely more of an issue in Lisama and Provincia.

Regardless of what the true volume of gas produced from Llanito, it is certain that the volume of gas produced
will increase. Flaring gas is not an option, so there needs to be a plan to effectively monetize the gas. The first step
would be to effectively utilize equipment and processes already in place.

There are currently two natural gas driven reciprocating compressors that are used to compress gas for sales in
the Llanito Field. These units can compress about 2.1 MMscf/D each, or a total of 4.2 MMscf/D. While not able to
see these units in Llanito on our most recent visit, it was apparent from discussions with the operators that many
of the compressors in Lisama and Provincia have problems with high temperatures and less than maximum rated
volumes. About 80 to 90% of the time this is caused by leaking valves on the compressor cylinders that allow gas
to recirculate causing lower capacities and higher temperatures. Hopefully, many of these older compressors have
already been retrofitted with newer valve technologies and materials to stop this leakage and get more volume
out of the compressors. This is something that should be investigated because it is highly recommended. Another
opportunity is to update the governors on these units from mechanical to the newer electronic governors. Both of
these, if not already done, have the potential to increase the capacity and runtimes to ensure that 4.2 MMscf/D is
achievable.

At the Nororiental station there is a flare stack that does not have a pilot. We are unsure if there are other flares
without pilots, but this would be a way to consume more fuel and provide more safety in the event of an
emergency. This would require changing the flare stack and installing a flare knockout drum (scrubber).

Another opportunity to use gas rather than flare is to allow neighboring communities to use low pressure gas as a
fuel source. The advantage of this is that no compression is needed. This is already being done in Llanito. It could
be an inexpensive idea to improve relationships with the community and at the same time, keep from flaring gas.

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There could be two problems with this, however. Ecopetrol could expose itself to liability. Another concern is that
if Ecopetrol provides gas to one community and not to another, the goodwill gesture could present a problem.

Suggestions for improving the maintenance of the existing compressors (and other equipment) will be discussed
more in the Lisama section. It does not look like the current gas production will exceed the capacity of the existing
compressors until the waterflood expansion and new wells are drilled.

1.2.3 Future Production

Figure 2 shows the long-term potential production forecast proposed for Ecopetrol. The plan calls for the drilling
of up to 84 producing wells, 39 workovers and re-perforations, 75 injectors, and 32 source wells. The
contributions to overall production are shown in the chart. Adopting this plan will be a game-changer for the
Llanito Field.

Figure 2: Llanito long-term potential production forecast.

The remainder of this section for Llanito will focus on recommendations for peak production rates and the
longevity of the field once the waterflood expansion is implemented. The waterflood expansion is a major project.
As with any major project, there will be capital costs (new water injection plant, new source wells, injection lines,
etc.) and future operating expenses incorporated into the costs.

Recommendations are based on the assumption is that it is better to size equipment and facilities to meet the
maximum expected rates, and to use the opportunity to update equipment that will last the life of the field with
lower maintenance and operating costs in the future. This is mentioned because there is often a push to minimize
capital costs and assume that the LOE (lease operating costs) can be adjusted to accommodate the reduced
capital costs. Facilities sized too small or equipment not updated could incur higher than expected LOE. Unlike the
initial capital costs, this LOE must be defended each year as part of the annual budget cycle. These operating costs
get harder to defend as time passes, especially when production has started its inevitable decline. Also, it is
sometimes necessary to spend capital to “retro-fit” what wasn’t sized properly in the first place. Not only is this
more expensive, it is also looked upon as poor business practice by management and investors. For these reasons,
our recommendations focus on eliminating these problems and doing it properly the first time.

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Crude Oil
The peak potential BOE/D rate for the Llanito Field is 22,500 BOE/D. Assuming the same distribution of production
will occur at the peak as now, this translates to about 20,700 BOPD and 10.2 MMscf/D at the maximum
production rate. In Table 1, the maximum crude oil production rates for each of the four stations was determined
by using the current distribution.

The most obvious crude oil choke point in the Llanito Field will be the 6” crude oil trunk line that connects the
Nororiental, Tres, and Gala stations to the dehydration plant. There will be close to 17,000 BOPD that will need to
be transported through the 6” line that has a capacity in the range of 15,000 to 18,000 B/D, depending on the
erosional velocity standard that has been adopted by Ecopetrol. As mentioned earlier, this line is already
experiencing difficulty in pumping crude from the three stations into the dehydration plant. Obviously, this
problem will only get worse after the waterflood expansion and the new infill producers. One potential solution to
this problem is to use drag-reducing chemicals to reduce the friction in the line when crude production reaches
the peak. But, this is expensive. Also, if the waterflood response is more favorable than estimated, there will likely
be a push to produce the oil faster to capitalize on the fact that a current barrel of oil is more valuable than a
future barrel of oil. Both of these situations should be avoided.

A larger trunk line to handle the increased crude production would be the ideal way to address this problem. To
ensure no difficulties, the line size should be 10” with a capacity of 27,700 to 50,400 BFPD (based on 3.3 to 6.0
ft/s). Even the low-end capacity of the 10” is higher than the maximum crude expected. This is recommended
because there can be upsets at the individual stations where some water is pumped into the crude line. It would
be desirable to use the same right of way used by the 6” line to ease in the permitting process.

Another less desirable option might be to find some sections of abandoned flowlines that can be used between
the Gala station and the Galan dehydration facility. The current 6” line between the Llanito stations and Gala
could handle the maximum flow rate to Gala and the extra capacity wouldn’t be required until Gala production is
introduced into the line. This type of option has been done before, but it is only recommended if there is no other
option.

The Galan station will be undersized compared to the others with regards to the crude transfer pumps, the stock
tank, and the 4” oil/water line from the station to the dehydration plant. There are two oil and water transfer
pumps are Galan, each is rated for 2,760 B/D for a combined flow rate of 5,520 B/D. The Galan station is currently
producing a total of 1,843 BFPD of oil and water, which is already very close to the rating of a single transfer
pump. Future projections show Galan could make about 8,000 BFPD with the waterflood expansion. Since it is a
good operating philosophy to always have a standby pump for crude transfer, two more equivalent transfer
pumps could be added. This is particularly true at Galan where there is only a 1,500 barrel stock tank for storage.
So, installing a larger stock tank would also be recommended. The 4” pipeline to the dehydration plant has a
capacity of about 8,000 BFPD. This doesn’t look like it will be a big problem.

An extra bulk separator will be required at all four of the Llanito Field stations because the combined oil and
water production will exceed the capacity of the existing separators. In keeping with the philosophy of having one
standby crude pump, an additional crude pump will be needed at all of the stations. It is always a good idea if the
operating and standby pumps were of the same rating and discharge pressure. It is always recommended that
crude transfer pumps be centrifugal pumps driven by electric motors.

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The two heater treaters at 10,000 BFPD each in the dehydration plant will be woefully undersized after the
waterflood expansion is implemented. There should be two more of the same size installed. The crude oil transfer
pumps required to transport oil from the dehydration plant to the refinery are only rated for 6,840 BOPD each, for
a total of 13,680 BOPD.

Produced Water
The waterflood expansion will obviously increase the amount of water produced. So far, however, there isn’t a
water production forecast, so an estimation was made that the total amount of water produced at the peak
production time will be equal to the current amount of water produced plus the volume of water required to
replace the voidage of BOE at the peak production time. This estimated volume of produced water totaled 29,441
BWPD for the four stations. The water was distributed based on their current water production and the amount
of BOE each station was estimated to produce. These potential maximum produced water rates for each station
are shown in Table 1.

Again, these produced water rates are an educated guess. Experience shows that there will be significantly more
water produced than engineering estimates. There are primarily two reasons for this:

1. Water often breaks through sooner than the model forecasts. In order to produce the amount of oil
forecasted, this early breakthrough water needs to be produced until the primary flood front reaches the
other producers. It is a hard sell to operations management that they need to shut-in the early
breakthrough producing wells in order to divert the injected water to other producers. All they see is that
oil is lost.

2. The estimated economic limit water cut is usually lower than actual. Operations will usually produce wells
beyond the estimated economic limit assigned by the project. The incremental cost to produce a little
more water from a well is not as easily seen as the loss in the oil production if the well has to be shut-in.

For the reasons listed above, it is always a good policy to design the produced water handling facilities to
accommodate at least the peak of the engineered estimates, and to add a safety factor of up to 20 or 25%. It is
better to spend the money upfront in the project rather than to pay for it later down the road. Under-sized
produced water handling facilities can lead to shutting in production, or injecting drag reducer chemicals (that are
expensive), or retro-fitting to accommodate the larger rates.

As a result of the waterflood expansion, the 6” produced water trunkline between Nororiental and Tres Llanito
and the Gala station will be undersized with an expected production of 16,700 BWPD in a line with a maximum
capacity of 15,000 to 18,000 BFPD. The 4” line from the Galan station to the dehydration plant will be at is
capacity since the total oil/water production from Galan will be about 8,022 BFPD and the capacity of the 4” is
8,000 BFPD. The 6” and 8” produced water trunklines from Gala will be fine to handle the 25,290 BFPD, but both
lines will need to be in service.

The existing produced water lines will change as a result of the increased water injection. The new project will
ultimately add 75 injection wells and 32 source water wells. Assuming about 1,000 BWPD per injector, that’s a
required injection capacity of 75,000 BWPD. The source wells would need to deliver about 2,000 BWPD per well.
These are large numbers. But, regardless of the amount of source and injection water, there will need to be some
significant changes in the current mode of operation at Llanito. These changes will be the same regardless of the
total volume. The only thing that will change are the number and sizes of the vessels and facilities.

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It is highly recommended to use source water for injection, regardless of the number of source wells required to
accomplish the task. The option of using surface water has many disadvantages:

▪ There needs to be de-aeration columns in the water treatment facility to remove oxygen. These things are
difficult to maintain since they require a vacuum to work and nature abhors a vacuum. Vacuum pumps can
also have maintenance issues. And oxygen scavenger chemicals to remove oxygen are very expensive if the
deaerator isn’t working properly.
▪ Surface water is rife with aerobic bacteria. These bacteria forms algae that plug up inlet screens and pipes.
Killing these bacteria will cause biomass plugs in the equipment.
▪ Surface water contains sulfates, and when combined with naturally forming anaerobic bacteria (sulfate
reducing bacteria) in the formation, this will form H2S in the formation and in surface facilities.
▪ Floating particles in surface water are difficult to filter and contribute significantly to formation plugging.
Having said this, there have been many seawater and river water waterfloods. This could be because there was no
suitable reservoir for source water, or that the reservoir wasn’t capable of delivering the volumes of water
required, or that the capital outlay was too great for the costs of drilling wells and adding lines. Assuming, there
are no regulatory requirements against using surface water, it really comes down to economics. From an
operations and maintenance perspective, it is far better to use source water.

It looks like the bulk of the injection wells will be in Llanito and Gala. For this reason, it makes sense to locate the
water treating and injection facility closer to the Gala and Llanito stations. The same is true for the water source
wells. The overwhelming philosophy favored by oil companies is to centralize the water treatment and injection
facilities similar to what was done with the Galan dehydration facility, rather than have satellite injection facilities
like the pilot at Nororiental. There are lots of reasons for doing this, but probably the overriding reason is lower
capital and operating costs. I agree with this philosophy.

Another advantage of a centralized facility is that it is easier to have specialized operators whose primary job is to
operate the water treating and injection facility. This is also desirable. These operators should not report to a
separate group other than production operations. The argument in favor is that the skill set required for water
plant operation is different than production operations, and if in a separate organization, the operators can
remain focused on their primary task of water injection. The water plant operators, however, need to feel their
impact on daily production. It’s easier to do this if they are part of the production operations organization. As the
waterflood matures with higher and higher water cuts, the production operations group will feel more and more
like they are in the water handling business rather than the oil production business. This is because when the
water facilities go down, it will be difficult to dispose of the water and can lead to shutting in producing wells. Be
cautious that production operations don’t preferentially put their better people in the production facilities rather
than water injection facilities.

The injection pumps are very critical components in the operation of the field. Similar to the operating philosophy
for crude oil transfer pumps at the stations, it is desirable to have water injection pumps with the highest
reliability and it is also recommended to have a spare unit to improve the availability. Experience has shown that
the most reliable water injection pumps are multi-stage centrifugal pumps with electric motor drivers. These are
highly recommended. The expected availability of these types of units is easily in the range of 98.5 to 99%.
Reciprocating pumps with diesel or natural gas engines usually do not have as high an availability percentage,
especially at higher discharge pressures. That is not to say that engine-driven reciprocating pumps cannot have

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low downtime percentages approaching those of electric motor driven centrifugal pumps, but it requires a very
robust maintenance program and it will never equal that of an electric motor driven multi-stage centrifugal pump.
Using the water injection pump and crude oil transfer pump analogy previously mentioned, there is a reason why
it is much more common to find electric driven centrifugal pumps being used as crude transfer pumps rather than
gas driven reciprocating pumps.

Multi-stage centrifugal pumps require less solids in the injected water than reciprocating pumps, but it is an
extremely good practice to have as much solids removed as possible in the injected water. The usage of pits alone
cannot deliver the quality of solids removal that will be needed for water injection. At the Nororiental pilot water
injected facility, there was a sand decanter and nutshell, backwashable filter being used to remove solids from the
water being injected. At the PTARI-221 facility at Galan, there are filter media filters and a flotation cell used to
get the finer solids.

The importance of solids and oil removal is often not as appreciated as much as it should be. Designed water
injection pump discharge pressures almost always exceed the fracture gradient of the reservoir and this is a
recommended practice as an operating philosophy. But, so is injecting water with an effective oil and solids
removal design. The bottom line is that inefficient removal of oil and solids will eventually lead to fracturing of the
reservoir rock due to plugging of the pore throats. Fracturing near the wellbore does not hurt so much, but larger
fractures can lead to inefficient sweeping of the reservoir and ultimately less recovery.

Large holding tanks with reasonable retention time at the water treatment/injection facility are a good idea to
remove any free oil or heavier solids. Media filters that can be backwashed automatically is a best practice for
removing solids. The flotation cell is also a good idea for removing finer solids downstream from the media filters.
Flotation cells are also good at removing any oil that might still be in the water. Cartridge type filters or screens
are not recommended to remove solids. These plug up too easily and are almost always bypassed. This is
especially true when filters are added at the injection well site.

Produced Gas
As mentioned earlier, Llanito will be producing 22,500 BOE/D at the peak production. Based on the current field
gas/oil ratio (GOR), this calculates to a maximum gas production of 10.2 MMscf/D, which is beyond the 4.2
MMscf/D current compressor capacity and the daily fuel gas and pilot gas consumption (~1.0 MMscf/D). The
excess gas production can be handled in three ways:

1. Install new compression and re-inject gas into the reservoir.

2. Install new compression and sell the gas.

3. Install gas driven generators and sell the electricity to the utility company.

Re-injecting gas is not likely a viable option. This would require high-pressure compressors that would be a
significant investment. It is also not likely that the Llanito reservoirs are good candidates for gas injection. Aside
from the elimination of flaring, the benefit of gas injection would be for pressure maintenance, and then after the
life of the project, the gas could be recovered and sold.

An idea that is gaining momentum within the industry to eliminate flaring is to install gas-driven generators and
sell the excess electricity not used by the facilities to the local utility company. In fact, it is understood that Llanito
might be doing some of this already. This scenario would use either natural gas motors or turbine engines to drive
the generator. The availability of turbine-driven generators is in the 98 to 99% range and is usually higher than the

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natural gas motors, although the turbines require more expertise to maintain. Depending on the size of the
turbine generator, it can consume anywhere from 500,000 Mscf/D to 2,000 Mscf/D. This idea sounds attractive
because it can generate power for field usage and at the same time provide power to the grid. The new water
injection facility will have multiple electric motor driven injection pumps, as well as other electric needs and can
benefit from two turbine generators.

Even with two turbine generators at the water injection facility, there will still be surplus gas that will need to be
flared or compressed. The amount of fuel gas consumed by the new water injection plant is assumed to be
around 1 to 2 MMscf/D at the most. This coupled with the 1 MMscf/D currently being used by the facilities and
the 3 to 4 MMscf/D capacity of the existing compressors, there will still be a need for up to 5 MMscf/D of
compression.

For increased availability, the preferred installations for gas compressors is electric motors driving centrifugal
compressors. These electric motors would be powered by the turbine generators. The availability of the electric
motor centrifugal compressors is easily in the 98 to 99% range. In the event power generation is not available, the
turbine driven centrifugal compressors have about the same 98 to 99% availability.

If the economics cannot justify the above-mentioned types of compressors for 5 MMscf/D, the sales gas
compression could be accomplished in Llanito using reciprocating compressors. It is possible that in the future,
Provinica will have surplus reciprocating compressor available (as will be mentioned later in the Provincia section).
With the current reduction in oil prices, there are likely many surplus compressors that could be leased or
purchased (especially reciprocating units) on the market from abandoned fields in Colombia from either
Ecopetrol-operated fields, or other operators. There are almost certainly these types of machines available
outside of Colombia.

1.3 Lisama Discussion


Figure 3 is a simplified block diagram of the Lisama Field with the primary oil/gas/water flow streams. The field
consists of four production stations (Tesoro, Sur Occidental, Satellite, and Lisama Central) as well as a dehydration
plant, a compression plant, and a gas plant. Oil and water are pumped from the Tesoro, Sur Occidental (Sol), and
Satellite stations to the Lisama Central station via a 6” trunk line. From Lisama Central, the oil and water is
pumped through a 6” and 8” line to the dehydration plant. There, the oil is separated and pumped into a 12”
pipeline to the refinery in Barrancabermeja. The 12” pipeline is owned and managed by the La Cira Field, which is
operated by Occidental. Produced gas from the four stations is fed to the compression facility where it is
compressed and sent to the gas plant and then to the refinery as sales gas. Produced water is separated in the
dehydration plant where it is treated through surface pits and then shipped to La Cira for disposal. Condensate is
recovered and stored at the plant and transported off location via trucks when necessary.

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Figure 3: Lisama block diagram.

On November 8, 2017, the QRI team toured the following facilities in the Lisama Field.
▪ Lisama Central Station
▪ Dehydration Plant
▪ Compression Facility
▪ Gas Plant
▪ Nutria well sites
The purpose of this site visit was to witness the facilities in operation, talk with operations personnel in the field,
and then identify potential bottlenecks or opportunities in Lisama. Current total production from the Lisama Field
is 2,828 BOPD, 611 BWPD and 6,625 Mscf/D. The expansion plan is based on the outcome of the first phase of the
study submitted to Ecopetrol and calls for the drilling of 42 new infill wells and 25 workovers with re-perforations.
The increased production from these wells will impact the existing operations in Llanito.

Table 2 shows the current equipment capacities and current oil, gas, and water production rates. It also shows
some estimates of the maximum potential production expected at Lisama.

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Lisama
Total Rated Capacities Current Production Potential Maximum Production
Facility Equip Units
BOPD BWPD BFPD MSCF/D BOPD BWPD BFPD MSCF/D BOPD BWPD BOE/D MSCF/D
Bulk Sep 1 14,000 3,500 1,486 264 1,750 3,133 2,995 532 4,083 6,312
o
Test Sep 3 12,000 4,000
s or
Te

Pumps 2 5,760
Bulk Sep 1 14,000 3,500 454 124 578 1,744 915 250 1,521 3,514
t
en

Test Sep 4 12,000 4,000


Oc r
cid
Su

al

Pumps 2 9,600
Bulk Sep 1 14,000 3,500 173 7 180 886 349 14 656 1,785
e
llit

Test Sep 2 6,000 2,000


te
Sa

Pumps 2 9,120
Bulk Sep 1 14,000 7,000 715 216 931 862 1,441 435 1,740 1,737
Bulk Sep* 1 1,000 1,800
l
Ce a
ra
am
nt

Test Sep 4 8,000 14,000


Lis

Pumps 2 19,200
Inlet pumps 2 6,000
pl tion

treater 1 8,400
t
ra
an

trans pumps 3 21,600


yd
h
De

circ pumps 2 7,200


Compressors Compressors 4+1 14,000 6,625
Gas Plant 47,000
Total *high wax well 2,828 5,699 1,231 8,000 13,347

Table 2: Lisama facility capacities with current and potential production.

1.3.1 Observations

Lisama Field observations were similar to Llanito. Security at the facilities was thorough and consistent. The
housekeeping was very good. Good housekeeping is an indicator that the operations personnel take pride in their
facility and that there is a culture of safety. The facilities were large enough to accommodate a significant amount
of expansion if required.

It did not appear there would be any bottleneck issues with the gathering system. For the most part, the
individual flowlines are 3”, which can easily accommodate the expected flow rates (less than 4,000 BFPD per
well). There are also approximately 192 shut-in wells in the Lisama Field that more than likely still have flowlines
in place. These lines could serve as flowlines for the 42 new infill wells being drilled.

Paraffin is a problem in Lisama but it seems to be isolated to the well and well head. There doesn’t appear to be
any issues of paraffin in the separators at any of the stations. The paraffin is treated by using hot oil (butane) from
the plant.

Unlike Llanito, and certainly not Provincia, sand production did not seem to be much of an issue in Lisama.

1.3.2 Current Operations

Crude Oil
The largest concern in the crude handling system in the Lisama Field is the 12” transmission line to the refinery in
Barrancabermeja. This line is apparently owned by the operators of the La Cira Field. The line has a capacity of
48,000 BOPD and the La Cira Field, which has priority, pumps about 38,000 BOPD. Ecopetrol is allowed to share
the line, but they are restricted to pumping oil a total of 15 hours per week. La Cira is also planning an expansion
drilling program that could very easily limit the amount of oil Ecopetrol could pump into the line. This is at a time,
when the Lisama Field is also planning an expansion program of its own.

Ecopetrol is aware of this potential problem. As a result, they are investigating an option of using the old 8”
gasoline pipeline that runs from Lisama to the refinery. This is the line that used to transport propane/butane

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from the plant to the refinery. Due to community problems, the line has been out of service for a while and the
integrity of the line is in question. This is an option that should be quickly explored so Ecopetrol’s operation is not
left in the hands of another operator. If successful, the 8” pipeline with a capacity of 17,700 to 32,600 BFPD
should be more than enough to handle the expected increase in oil production at Lisama as a result of the infill
and workover program.

In the meantime, it may be worthwhile for Ecopetrol to challenge the 48,000 B/D capacity limit on the 12” crude
line to the refinery. This corresponds to an internal velocity of about 4 ft/sec. Design velocities of 3.3 to 6.0 ft/sec
can be acceptable before exceeding the erosional velocity in bare steel pipe. These velocities would correspond to
between 39,600 and 72,500 B/D. Since there is no sand present in the crude, it might be worthwhile challenging
the 48,000 BOPD capacity.

Running a GAP model on the pipeline using actual data to determine the effective internal ID of the pipeline could
be valuable. It is possible that paraffin could be built up in the pipeline, causing the reduction in capacity. It is not
known how often the crude line from Lisama to the refinery in Barrancabermeja is pigged. But since there is a
chance that there could be paraffin in the 12” line, proceed extremely cautiously before attempting to pig the line
to remove paraffin. Getting a pig stuck is highly possible.

It was mentioned that there was not strong signs of paraffin in the facilities. Paraffin was found in the wells and
surface facilities at the wellhead, and the current program of using butane to dissolve paraffin is a good practice.
Diesel is expensive, so is paraffin solvent. There are paraffin inhibitors and pour point depressants that are
available to treat the wellhead and flowlines, but these chemicals are more expensive than most and must be
injected at significantly higher dosage rates (mg/l) than more common chemicals like corrosion inhibitor, de-
emulsifier, or scale inhibitor. Using the butane is a good alternative.

Produced Water
The Lisama Field currently produces about 600 BWPD. The produced oil and water is collected at the Tesoro, Sur
Occidental, and Satellite stations and shipped to the Lisama Central station via a 6” pipeline. From Lisama Central,
the produced oil and water is pumped to the dehydration plant where the oil and water are separated. The
produced water is usually shipped to La Cira for injection. The produced water can also be sent to pits at the
dehydration facility for surface disposal.

With the implementation of the regulations prohibiting surface disposal in October 2018, this surface option of
disposing water will not be available. By claiming surface disposal is used only in the event of an emergency, it
may be possible to get an exemption from the regulations. The longer term preferred option would be to have an
injection pump and a disposal well to get rid of the produced water. The current pits would then only be used in
the event of emergency, which is an accepted practice.

Another water source in Lisama is the cooling water for the compressors. The source for the cooling water is from
surface waters. The compressors use about 25 BWPD for cooling and then disposed on the surface. This is a
practice that will not likely be allowed in the future. With increased gas production and compression, it may be
necessary to mix this water with produced water going to La Cira. If a disposal well for the produced water is
required, this may be an option for disposal.

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Produced Gas
Current total gas production in Lisama is 6,625 Mscf/D. This agrees closely with the inlet gas plant rate of 7
MMscf/D. As usual, the summation of test gas is less than actual measured, but the disparity is not that
significant.

The produced gas is sent to the Lisama compression plant, which contains a total of five compressors. Each of the
compressors is nominally rated for 3.5 MMscf/D. The compressors are designed to run with four units always
available and one stand-by. The effective capacity of the gas plant with four compressors then is about 14.0
MMscf/D. The real total capacity was tested at 13.526 MMscf/D. Of course, this does not include any downtime.

Each compressor has a natural gas engine that drives a reciprocating compressor. These are old units, so a good
estimation of the availability of these units is about 95%, or about 18 days per year that the unit is not available.
The actual availability is unsure, but it is desirable to have the availability as high as possible and the units as
efficient as possible.

Operators at Provincia mentioned the presence of calcium carbonate scale in the cooling water of the
compressors. Although this problem was not heard in Lisama, it is likely because Lisama uses only 25 BWPD for
cooling as opposed to 2,350 BWPD at Provincia. There’s more discussion in the Provincia section of this report,
but the solution is to greatly reduce the calcium ions in the cooling water with either a water softener or
chemicals. This is particularly true since the source for the cooling water is surface water. It is our understanding
some chemicals are being injected. We suggest closer study to determine if the chemicals being used are the most
effective. Regardless, chemicals will greatly reduce but not eliminate scale formation. In that case, a
biodegradable solution called Rydlyme™ is effective at removing calcium carbonate scale in the compressor
jackets and is recommended at Lisama. Scale deposition in the cooling water system has a major effect on the
efficiency of a compressor and can lead to high temperature shutdowns.

The remainder of this section provides suggestions to improve the runtimes on the existing reciprocating
compressors. It should be mentioned that these machines will inherently have significantly more down time than
a centrifugal compressor due to the friction and wear of the sliding components. So, it is a good operating
philosophy that there be a redundant/stand-by compressor train available if using reciprocating compressors. This
seems to be the case in Lisama where the compressor capacities are listed based on four units plus one. The same
thing was apparent with the gas-lift compressors at Provincia (3 + 1).

Comments from the operators were that the units did not seem to compress as much as they should and high-
temperature shutdowns were common. Another comment heard was that components seem to account for 75%
of the compressor shutdowns. As was mentioned in the section on Llanito, the most likely component responsible
for reduced efficiency and high-temperature shutdowns in the compressors are the valves on the cylinders. It is
estimated that 80 to 90% of these problems can be tied to the valves. These are old units in Lisama and there
have been significant advancements in the design and materials in the compressor valves. We suggest that these
compressors be retrofitted with the latest in valve technology. It should help considerably. Another component
on the older compressors that may be an issue is the governor on the engine. These were originally mechanical in
nature (gears and flyweights), but are now electronic. These need to be retrofitted as well, if they have not
already.

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There have been tremendous advancements in maintenance. Many of the following recommendations will
improve the reliability and availability of the current compressors, transfer pumps, generators, etc. As production
increases at Llanito, Lisama and Provincia, this will become far more important than it has been in the past.

A Computerized Maintenance Management System (CMMS) needs to be in place and all of the functions utilized.
The primary advantages of a robust CMMS are:
▪ Keeps track of failures for analysis.
▪ Can be used to plan preventative maintenance or shutdown activities.
▪ Generates work orders for maintenance activities.
▪ Maintains spare inventory.
▪ Prepares reports for better management.
There are all kinds of CMMS software on the market that can be used for many more functions than the ones
listed above (e.g. linked to financials and automatic spare purchasing). IBM’s Maximo™ is probably the software
that is most common because it is relatively user friendly. There are also smaller CMMS companies that can
design more fit-for-purpose software. It’s possible that Ecopetrol has its own software.

A robust PM program would also help reduce downtime. An example of PM being utilized on compressors would
be periodically using an infrared thermometer on the compressor valves to see if a valve is recycling (heating up)
prior to its failing. This allows a more effective planned shutdown and repair as opposed to a chaotic unplanned
outage if the compressor shuts down at 2:00 am in the morning, for example. Other components of a good PM
program are vibration monitoring, oil analysis, routine inspections and consumable replacements.

Another thing that will help reduce equipment and facility downtime is having a good stock of readily available
critical spares. Critical spares are those components that affect operations the most, or have long lead times to
purchase, or have proven to be troublesome, etc. CMMS can track these spares. Operations should give input on
which equipment is critical.

One of the things that is a very common practice in refineries and gas plants are “turnarounds” where parts of the
facility are shutdown in order to perform many simultaneous maintenance and operations activities. Something
like this could be done on a much smaller scale in LLP. For example, cleaning sand from a separator can trigger
other activities that can be done simultaneously. CMMS is a very good tool to manage this.

Much like drilling, a company’s maintenance division has often evolved into its own department separate from
operations. It is not known if this is true or not in Ecopetrol. The arguments for this are similar to those of drilling
in that the work scopes are different, the employee career paths are different, the technology is becoming more
sophisticated, the organization needs to focus more on planning as opposed to “firefighting,” to name a few.
Since having the maintenance department report to field operations is not likely to happen, a hybrid organization
could be developed. An instrumentation, electrician, and a mechanic would be on temporary assignment in
operations where they remained in maintenance, but they received their day-to-day guidance from operations.
They also attended the daily operations morning meetings.

A compositional analysis of the gas being discharged from the compressors at the Lisama gas plant was performed
recently and the results are shown in Table 3. This is after the free condensate has been removed and sent for
storage. The rate of free condensate this day was 90 B/D.

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Gas Outlet Gas Liq/gas Theoretical Liq Yield Theorectical Yield at 7.0 MMSCF/D Theorectical Yield at 14.0 MMSCF/D
Composition Mole % gal/cu ft STB/MMSCF STB/day STB/day
C1 79.997
C2 9.468
C3 5.171 36.35 33.87 237 474
iC4 0.976 30.59 7.60 53 106
nC4 1.707 31.75 12.80 90 179
iC5 0.556 27.40 4.83 34 68
nC5 0.485 27.08 4.26 30 60
Other 1.64
Total 100 444 887

Table 3: Lisama outlet gas composition and theoretical yield.

The Lisama gas plant is designed to handle up to 100 MMscf/D and is designed to extract condensate and C3/C4.
The C3 and C4 were shipped to the refinery through an 8” gasoline line. The gas plant is currently processing only
about 7 MMscf/D, which is below the minimum operating range of the chiller and contactors. The gas plant is
currently being used to dehydrate the gas with a glycol dehydration unit and to recover free liquids that break out
of gas and are shipped to a condensate storage tank where they removed via truck. The 8” gasoline line was shut-
in due to illegal taps placed by the local community.

Table 3 is presented for information only. The yield was calculated using published tables just to give an idea of
how much gas liquids are being shipped to the refinery with the sales gas. If able to extract the C3, C4, and C5, it
could be possible to recover about 400 B/D of natural gas liquids. These are just estimated liquids calculations.
Without being able to operate the liquids extraction portion of the plant and then transport the products, this is
presented for informational purposes only.

One suggestion on the condensate would be to ship all or some of it with the Lisama crude rather than truck it.
This is usually done because the price for crude is usually higher than the price for condensate, plus there is no
trucking fee to absorb. The downside to this is that the condensate would increase the Reid vapor pressure (RVP)
of the Lisama crude. But when the Lisama crude is mixed with the La Cira crude, which has an API gravity in the
lower 20s, the consolidated RVP will be less than just the Lisama crude. This may not be worth it for only 90 B/D
of condensate.

1.3.3 Future Production

Shown in Figure 4 is a long-term potential production forecast being proposed for Ecopetrol. The plan calls for the
drilling of 42 new infill wells and 25 workovers with re-perforations. The contributions to overall production from
each of these are shown in the chart. This expansion program will extend the life of Lisama and have an impact on
the current operations in the field.

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Figure 4: Lisama long-term potential production forecast.

Unlike Llanito and Provincia, the development program at Lisama does not really qualify as a “major project.” The
economics for the new wells and workovers will likely be based on their own individual economics. It will be more
difficult to have capital available to do infrastructure upgrades. For this reason, our recommendations will focus
on improving the existing facilities and equipment.

Crude Oil
The peak potential BOE/D rate for the Lisama Field as a result of the infill well and workover program is 8,000
BOE/D. Assuming the same distribution of production will occur at the peak as now, this translates to about 5,700
BOPD and 13.347 MMscf/D at the maximum production rate. In Table 2, the maximum crude oil production rates
for each of the four stations was determined by using the current distribution.

A potential area of concern would be the crude/water transfer pumps at the Tesoro station. At present, there are
two transfer pumps that pump 2,880 BFPD each, or a total of 5,760 BFPD of oil and water. Current oil and water
production at Tesoro is 1,486 BOPD and 264 BWPD. The estimated fluid rates at peak production in 2019 will be
2,995 BOPD and 532 BWPD, or 3,527 BFPD. This will require both pumps running to evacuate the oil and water
from the Tesoro station. In keeping with the operating philosophy of having one spare pump for critical pieces of
equipment, there needs to be another transfer pump installed to have a 2 + 1 availability scenario.

Another area of concern are the inlet pumps and heater treater at the Lisama dehydration plant. Current total
production at Lisama is 2,828 BOPD and 611 BWPD. The inlet pumps to the treater are each rated for 3,000 BFPD,
or a total of 6,000 BFPD and there is only one heater treater. There are bypasses around the treater if it is out of
service. This may not be causing a problem because Lisama oil is about 32o API gravity and there is sufficient
retention time in the inlet storage tanks (total of 27,200 barrels capacity), so that free water can effectively be
drained from the tanks.

The maximum production rate for Lisama will be 5,699 BOPD and 1,231 BWPD, or 6,930 BFPD. This will exceed the
capacity of the two inlet pumps to the treater, and at least one additional 3,000 B/D pump should be installed.
The next bottleneck is the single heater treater that is rated at 8,400 BFPD. Since Lisama has found a way to
survive on one heater, it is not obvious this is a problem that would require the installation of a back-up heater
treater, but we do recommend one, because any failure or maintenance on the treater would cause lost

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production. It is quite possible to find another used one from an abandoned field, or in a field that has a
significant downturn in production.

Produced Water
The slight increase in total produced water from 600 BWPD to a projected 1,230 BWPD will not have an
appreciable impact on the recommendations made previously. It will be necessary to send La Cira a little more
water, or to inject more into the disposal well.

Produced Gas
The produced gas at peak production will increase from about 7.0 MMscf/D to a forecasted 13.347 MMscf/D. It is
suspected that the actual produced gas rate will be at least this and probably more.

This will exceed the realistic compression capacity of 14.0 MMscf/D. The most practical solution in this case would
be to install one or two more gas driven reciprocating compressors similar to the ones that are already there. It
would probably be easy to find used machines of this size, either in Ecopetrol’s inventory, or from other operators
in Colombia. With the emphasis on eliminating flaring, the trend is to move away from these types of units to
more efficient electric driven centrifugal machines, so there should be some reciprocating compressors available.
In fact, it is quite likely, that a spare unit or two might be available from Provincia as will be seen later.

In Table 3, the estimated recovery of C3, C4, and C5+ was calculated assuming that the peak gas production rate
for the Lisama gas plant is 14.0 MMscf/D. The expected yield would be about 800 B/D of propane, butane, and
gasoline. To put this into perspective, this is about the rate currently being produced and sold at the Provincia gas
plant. However, the economics of getting this recovery just might not be there. For one thing, it is not known for
certain if the Lisama gas plant can operate at 14.0 Mscf/D, although it’s expected to.

The most formidable obstacle to recovering these NGLs is transporting them from the gas plant to the refinery.
The 8” gasoline line will hopefully be utilized to transport Lisama crude to the refinery and eliminate the
dependency on the La Cira pipeline. This still seems like the preferable strategic strategy. It isn’t known if the
refinery pays Lisama for the rich gas at the same rate as dry gas. But, if the Mscf rate is the same, there might be
some advantage to tying into the Provincia gasoline line to the refinery. This could be an expensive proposition
because it isn’t known how long Lisama will be producing 14 MMscf/D. Also, there’s a possibility that the
community problems that plagued the 8” gasoline line would also plague a new line that would be laid to the
Provincia gasoline line.

1.4 Provincia Discussion


Figure 5 is a simplified block diagram of the Provincia Field with the primary oil/gas/water flow streams. The field
consists of two production stations (Suerte and Santos), a compression plant, and a gas plant. Oil from the
Bonanza Field is pumped to the Suerte station. The combined Suerte and Bonanza oil is then pumped to the
Santos station. From Santos, the oil is shipped to the gas plant and ultimately into a shared 8” trunk line (with
Petro S/C) to the refinery in Barrancabermeja. Produced water is treated at the two stations, and disposed. The
produced gas from the Santos station is compressed and sent to the Suerte station. From Suerte, it is compressed
and sent to the gas plant for treatment. The total gas stream (65 to 70 MMscf/D) from Provincia is combined with
the Bonanza gas (3 MMscf/D) and the total is initially cooled where liquids are removed and sent to LNG storage.
In the next stage of treatment, the gas is chilled and then dehydrated with glycol. The liquids are then
fractionated into propane, butane, and condensate. The dry gas is used for fuel gas (~10 MMscf/D), gas lift (40 to
45 MMscf/D) and sales gas (~10 MMscf/D).

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Figure 5: Provincia block diagram.

On November 9, 2017, the QRI team toured the following facilities in the Provincia Field.
▪ Santos Station
▪ Suerte Station
▪ Compression Facility
▪ Gas Plant
The purpose of this site visit was to witness the facilities in operation, talk with operations personnel in the field,
and then identify potential bottlenecks or opportunities in Provincia. Current total production from the Provincia
Field is 3,704 BOPD, 236 BWPD and 17,727 Mscf/D.

The future expansion plan for Provincia is based on the outcome of the first phase of the QRI study submitted to
Ecopetrol. The plan is ambitious and calls for the following:
▪ 25 infill wells
▪ 18 workovers with re-perforations
▪ 59 waterflood producers
▪ 82 injectors
▪ 16 water source wells
▪ New waterflood injection facility
In addition to this, the feasibility of converting artificially lifted wells from gas lift to rod pumps is currently being
investigated. This will have a significant impact on the compression facilities and gas plant. In fact, converting

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from gas lift might be a necessity. The discussion and recommendations in the report would be revisited once the
conversion decision is finalized.

Table 4 shows the current equipment capacities and current oil, gas, and water production rates in Provincia. It
also shows the peak estimated oil and gas production at each station based on their current GOR and the current
production distribution at the two stations.

Provincia
Total Rated Capacities Current Production Potential Maximum Production
Facility Equip Units
BOPD BWPD BFPD MSCF/D BOPD BWPD BOEPD MSCF/D BOPD BWPD BOEPD MSCF/D
Bonanza 1 2,400
Bulk Sep 5 20,162 91,949 1,433 127 2,373 5,454 11,658 19,309 44,374
Test Sep 5 5,808 35,009
te

treaters 1 14,000
er
Su

Pumps 1+1 12,000


Compressors 7 42,900
G/L 3+1 56,980
Bulk Sep 5 18,866 78,664 2,271 109 4,387 12,273 18,476 35,692 99,854
Test Sep 4 3,984 26,437
os

Treaters 2 20,000
nt
Sa

Pumps 2 50,000
Compressors 10 47,103
Total 3,704 236 6,760 17,727 30,136 55,000 144,228

Table 4: Provincia facility capacities with current and potential production.

1.4.1 Observations

Provincia Field observations were similar to Llanito and Lisama. Security at the facilities was thorough and
consistent. The housekeeping was good, which is an indicator that the operations personnel take pride in their
facility and that there is a culture of safety. The facilities were large enough to accommodate a significant amount
of expansion if required.

It did not appear there would be any bottleneck issues with the gathering system in the current wells. There are
ample manifolds at the stations and a large number of vessels with plenty of capacity. For the most part, the
individual flowlines are 3”, which can easily accommodate the expected flow rates. There are also approximately
120 shut-in or abandoned wells in the Provincia Field that more than likely still have flowlines in place. These lines
could serve as flowlines for many of the new wells and most of the shut-in wells that are currently under review
for behind the pipe potential and returning to production.

A big concern at Provincia in the future with the proposed waterflood expansion will be the requirement for
source water, water injection facility, and produced water handling. Another big concern will be the 8” crude
pipeline currently shared with another field, Petro B/C.

Sand Production
Sand production is a problem in the facilities in the Provincia Field. Operators reported that there have been
failures in the inlet manifolds caused by sand erosion. Sand has been recovered in the bulk and test separators.
Sand accumulation did not seem to be as much of a problem downstream from the separators.

Sand has to currently be cleaned from the separators about every 2 to 3 years for each. Each cleaning of a sand
filled vessel could take as long as a month once it is shut-in, approvals received, personnel contracted, vessels
purged and cleaned, and vessel put back into service. While this is a time-consuming and costly task, it doesn’t

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appreciably impact the total capacity of the Provincia stations since there are so many vessels with large
capacities.

Feedback received had indicated there was no sand control mitigation installed in the wells. Gas lift, the system
used in Provincia, is probably the most effective artificial lift method in sand producing wells because the valves
can operate in sandy conditions as opposed to other artificial lift methods. Unfortunately, gas lift is not the most
efficient way to maximize liquid production.

Depending on the reservoir properties, the ideal solution to mitigate sand production is either the installation of a
gravel pack, or a frac-pack (simultaneous hydraulic fracturing of a reservoir and the placement of a gravel pack).
This, however, requires a workover rig. This is a good option to mitigate sand production if the decision is made to
replace the current gas-lift with either a conventional rod pump or roto-flex pumping unit. It should be pointed
out, however, that converting from gas-lift to rods will be a costly endeavor because of the requirement for a rig
as well as the capital costs for rods and a pumping unit.

Unfortunately, there really is no effective way to install a sand screen through tubing with either the use of a
wireline unit, or coiled tubing unit (CTU). In our experience, pumping resins through tubing to eliminate sand
production is generally not successful. It is not known if this technique has improved in recent years, but it is
unlikely.

The only additional recommendation is to closely monitor the sand production and check velocities in the well,
wellhead, and surface lines to ensure they are always in the safe operating range as the fluid rates change in the
future. There are several different types of sand probes at the well head to monitor sand production with the idea
that there is an optimum flow rate that a well can be produced before it starts producing sand, but these are not
very successful. By the time the probe responds, the damage is usually already done. Also, without remote
monitoring of these probes, some of the effectiveness at preventing increased sand production is lost because it
won’t be known when the probe has failed.

On one of the well locations in Provincia there was a sand trap that was left on location after the workover had
left. This sand trap was basically two vessels that could catch the sand as the well was produced into it. It would
be easier to clean the sand in this sand trap unit rather than waiting until the sand reached the station and clean it
in the vessels. It is not known how many of these units are around, but it is a possibility.

In a mature field with these moderate to low sand production rates, the best practical suggestion is to basically,
live with the problem and clean the vessels. Treat the vessel-cleaning as though it were preventative
maintenance. Rather than wait until dump valves are plugged, or valves seats are eroded, set up a schedule where
all vessels are cleaned at one time. The timeframe for this could be two to three years for currently filling up a
vessel. This would save a lot of time on permits, calling out crews, ordering spares, etc. The vessels could be
cleaned faster and cheaper.

Another thing that is currently being done at the Santos and Suerte stations that is a good practice in sand
producing environments is regularly scheduled ultrasonic wall thickness monitoring. This is a necessary program
to mitigate catastrophic line failures as a result of sand erosion. This could be prioritized by doing velocity
calculations in the higher rate wells.

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1.4.2 Current Operations

Crude Oil
An area of concern expressed in the field was the 8” trunk line from the Provincia gas plant to the refinery. The
approximate Provincia and Bonanza crude is 6,000 BOPD. This line is shared with Petro S/C. This is another
operator that also produces about 6,000 BOPD. For some reason, the capacity of the line seems to be about
15,000 BOPD, which is a few thousand BOPD too low. This capacity corresponds to about 0.9 m/s velocity, which
is below the 1 m/s minimum erosional velocity. Currently, the operators pump into the line at alternative times
and have a schedule that is agreed upon in advance.

The tolerances for erosional velocity run from about 3.3 to 6 ft/sec. This corresponds to 17,700 to 32,600 B/D in
the 8” crude pipeline to the refinery. At present, there doesn’t seem to be much concern with the capacity of the
line. Currently under study is a program to possibly convert wells currently on gas-lift to rod pumps. This will likely
cause a bump in production. Also, there is a program to re-enter many of the shut-in wells and re-perforate
potential behind the pipe reserves. The incremental oil from both programs should not exceed the capacity of the
8” pipeline to the refinery, especially if the total capacity of the line is investigated and adjusted to something a
little more than 15,000 BOPD.

It would be a good idea to run the GAP model on this transportation line to determine its recommended capacity.
It might be possible to exceed the current capacity rating. Once the waterflood expansion is under way, this line
will not be large enough to transport all of the Provincia crude.

Produced Water
At both Suerte and Santos stations, the produced water, 127 BWPD and 109 BWPD, respectively, is directed to the
open pits, then CPI, then to the oxidation pits and ultimately to surface disposal as per approved regulations.
Approximately, 2,350 BWPD of cooling water is also disposed into these pits at Suerte and Santos. As with the
Llanito Field, the Provincia station will not be able to dispose of water on the surface after October 2018.
Ecopetrol needs to have plans in place to eliminate surface and implemented in three to five years.

Future plans call for a waterflood program in Provincia. As with Llanito, the most effective use of produced and
source water is to inject it into the producing reservoirs, which is what is recommended. Unfortunately, the
Provincia waterflood will not be operational by October 2018.

If the waterflood plan is not approved, then it would be necessary to dispose the produced water (236 BWPD) and
the cooling water (2,350 BWPD) into disposal wells. Each disposal site (Suerte and Santos) should have two
disposal pumps so there is a standby. There should also be two disposal wells (each well would handle the
combined water from Suerte and Santos). These wells could either be drilled, or currently shut-in wells could be
recompleted as disposal wells.

If the waterflood expansion is approved, then there are two options. One option is to provide proof of the
injection plan to the government and this might be enough to get a waiver to continue disposing water to the
surface until the new water injection facility is built and this water will be used as part of the waterflood.

The other, and more preferred, option is to eliminate surface disposal by installing disposal pumps that pump into
two disposal wells as mentioned earlier. Once the new water injection facility is completed, then the produced
and cooling water can be pumped to the new water injection facility for injection into the Provincia reservoirs.
The disposal wells would then be available for emergencies, or if the water facility is shut-in for whatever reason.

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An oilfield practice that is being accepted as a best practice is the elimination of open pits as part of the water
treatment process. The idea would be to use tanks instead of pits. This would likely deliver better water quality
and environmental and regulatory compliance. It is usually accepted to have an emergency pit available for
unforeseen upsets, or tank cleanings. This is good for the environment and is also safer. Ecopetrol should be
moving in this direction.

Produced Gas
According to the operators, there is approximately 65 to 70 MMscf/D of total gas being compressed and delivered
to the Provincia gas plant from Suerte and Santos. It should be mentioned that the summation of well tests
indicate a gas production rate of 17.7 MMscf/D. There is about 45 MMscf/D used for gas lift and approximately 10
MMscf/D of sales gas. The summation of test gas rates and total gas lift gas is about 62.7 MMscf/D. Since there is
approximately 65 to 70 MMscf/D of inlet gas to the plant, this means that anywhere 3 to 8 MMscf/D is being
consumed as fuel gas. This does not seem too unreasonable given the number of gas driven machines in
Provincia, but there could still be metering errors.

It was mentioned that 45 MMscf/D was being used for gas lift supply for the 91 gas lift wells, which is unusual.
The amount of gas used for gas lift at each well is measured with an orifice meter. Measuring gas lift at each well,
by the way, is a good practice that isn’t always used everywhere. One recommendation is measure the
summation of the individual meters on each well and compare to the total coming from the compressors. It would
be surprising if there was agreement. A tool that I have used in the past is an ultrasonic meter that can strap on
to the outside of the pipe and measure flow. In this way, the accuracy of current meters on the total gas lift and
the individual well gas lift can be determined. A great setup has turbine meters on the test lines for gas, a mass
meter (Coriolis) on the common lines (providing the lines are not too large), and orifice meters on the well lines.
The amount of gas used for each well should not vary much since there is a choke on the line to regulate flow.
Orifice meters work well in this case, if the orifice plates are sized properly in the first place and if they are
checked for erosion.

The use of 45 MMscf/D to lift a total of 3,704 BOPD and 236 BWPD seems odd. This is an average GLR (gas to total
liquid ratio) of about 11,421 scf/BF. This is too much gas usage.

Gas lift works because the lift gas lightens the hydrostatic gradient of fluid in the column which reduces the
flowing bottomhole pressure and allows the well to produce. This works up to a point. Depending on the tubing
size, and fluid composition, a GLR is less than 1,000 or 1,500 scf/barrel, is usually good. Once the GLR approaches
about 2,000 scf/barrel or more the amount of production starts decreasing and the well just starts circulating gas.
This is an indication that either the gas lift rates are not optimized, or the tubing is too large for the production
rates.

QRI will be investigating the option of converting gas-lift wells in Provincia to rod pumping units. If this is the
direction recommended, then it is possible that 45 MMscf/D load will eventually be taken off the compressors.
For the present, however, it seems that one of the simplest things to do to reduce the load on the compressors is
to reduce the amount of gas being used to lift the wells. Given the average lifting GLR, it seems like there would
have to be some wells in Provincia that are just circulating gas with little fluid recovery. The PROSPER™ model can
run simulations on 2 7/8” (the most common tubing in Provincia) and 2 3/8” to determine the optimum lift GLR.
Reducing the gas volume for these wells above the optimum GLR should not reduce the amount of production
made, and may even increase it. Given the relatively large tubing sizes, this flow would likely be in the form of
slugs, but slug flow is better than no flow. In addition to reducing the load on the compressors and hopefully

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providing a standby machine, reducing the amount of lift gas will also increase the amount of time the gas-lift
wells can continue producing while running on the line pack of the gas lift system.

Another observation that I have made in the past in gas-lift wells is that not all of the wells are lifting from the
lowest valve as per design. The cause for this is often leaking packing around the valve, or the valve not seating
properly, or a valve just opening at the wrong pressure. A wireline unit can be used to run a temperature or
production log to find which valves are operating. QRI was investigating a method using PROSPER modeling to
estimate from the flow characteristics which wells might not be lifting from the deepest valves. If this works, it
may be a way to increase production if these wells can be identified and the problem corrected with a wireline
unit replacing the leaking valve(s) with new ones.

There are 17 compressors at the two stations with a total capacity of 90,000 Mscf/D. This is a load of about 78% of
the total available capacity. Given the lower availability and reliability expected from gas engine driven
reciprocating compressors, this could be a concern and after talking with the operators at the facility, it was
indeed a concern.

In the previous section there was a long discussion about the suggestions to improve the efficiency of these
existing units through improved maintenance and updated components of the units. The suggestions made for
Lisama are all the more applicable in Provincia and are highly recommended.

Another concern expressed in Provincia was the presence of calcium carbonate (CaCO3) scale in the water cooling
system for the compressors. Scaling is a pretty common problem in these systems, especially when using source
well water. Usually, the scale formed is calcium carbonate rather than the much more difficult to remove barium
and strontium scales. Scale formation in the cooling water system reduces the heat exchange and causes the
compressors to run at higher temperatures which causes a significant reduction in the overall efficiency of a
compressor. In fact, higher temperatures and reduce flow rates were mentioned as a problem.

To reduce the formation of calcium carbonate scale in the cooling water, a water softening unit can be installed
that basically reduces the calcium ions, and consequently the formation of CaCO3 in the compressor cooling
system. A company called Fluid Dynamics has a product that is installed in the cooling water trunk line and claims
it prevents the formation of CaCO3 scale in the compressor piping by causing the scale to form in crystals that flow
through the piping rather than having the calcium carbonate in solution and forming on the compressor piping.
Although we don’t have experience with this unit, it might be worth a trial experiment, depending on the cost.

Another option to reduce the formation of calcium carbonate is to inject scale inhibitor chemical in the cooling
water system. This is a very common practice. The chemical is usually injected upstream from the compressors at
a rate of about 50 ppm or 2.1 gal/1,000 barrels. The chemical can cost up to $40/ gallon, so the cost to
continuously inject chemical could be as high as $84.00 for each 1,000 B/D of cooling water. The current cooling
water rate is 2,350 BWPD, so the chemical cost would be about $200/day.

Water softening units or chemical scale inhibition will greatly reduce the formation of scale, but it will not
eliminate it entirely. So, there will still be a need to remove scale from the cooling pipes on the compressor.
Rydlyme™ is a product that can be circulated through the jackets and removes the deposits. It is also
biodegradable, which is a nice feature since the cooling water at Provincia is being treated using pits and then
disposed on the surface.

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It is recommended to flush the cooling system of each compressor now with the Rydlyme™. This is a one-day
procedure per unit and is not very costly. Then, start the cooling system with chemical injection to “soften” the
water and return the units to service. Monitor the performance of each unit. This will more than likely improve
the efficiency of the units immediately.

Another concern voiced was whether or not the composition of the gas could be hurting the performance of the
compressors. In the next section, it will show that the composition of the gas leaving the plant contains a
significant amount of propane that could be eliminated. The recovery of the heavier components (C4+) was pretty
good. It would be assumed that the compressors were designed to compress dry gas from the plant. Since the gas
is not as dry as it could be, it is possible that the machines might perform more efficiently once the gas plant is
performing more efficiently.

Produced Gas
During the field review, concerns were raised about the efficiency of the gas plant at Provincia. Although we
didn’t have access to the actual production figures, the operators estimated that the inlet gas rate to the plant
averaged between 65 and 70 MMscf/D of gas. The outlet gas was approximately 45 MMscf/D that was being used
for gas lift, about 10 MMscf/D was sold to the refinery and the remainder was consumed as fuel gas.

The total liquid gas products from the gas plant averaged anywhere from a total of 900 to 1,200 B/D of propane,
butane, and condensate. Based on a low inlet feed of 65 MMscf/D, this is a total liquids yield ranging from 13.8 to
18.5 STB/MMscf. This seems low. As a comparison, dry gas is often defined as gas with a condensate yield less
than 10 STB/MMscf, and wet gas is often defined as having a condensate yield greater than 20 STB/MMscf. The
inlet gas at Provincia would be considered “wet.”

A gas compositional analysis of the inlet and outlet gas to the Provincia gas plant was taken on November 15,
2017. These results are shown in Table 5. The analysis results show the plant is doing a good job of removing the
C5+, but is removing 92% of the butane and only 46% of the propane. A normally functioning plant should be able
to extract at least 85% and as high as 95% of the propane.

Gas Inlet Outlet Liq/gas Act. Liq Yield Act. Yield at 65 MMSCF/D Tot. Liq Yield Tot. Yield at 65 MMSCF/D
Composition 15-Nov-17 15-Nov-17 gal/cu ft STB/MMSCF STB/day STB/MMSCF STB/day
C1 84.181 87.445
C2 8.151 7.284
C3 2.494 1.357 36.35 7.45 484 16.34 1,062
iC4 0.276 0.047 30.59 1.78 116 2.15 140
nC4 0.42 0.01 31.75 3.07 200 3.15 205
iC5 0.179 0 27.40 1.56 101 1.56 101
nC5 0.137 0 27.08 1.20 78 1.20 78
Other 4.162 3.857
Total 100 100 979 1,586

Table 5: Provincia gas composition and yield.

The yield estimates are based on natural gas tables rather than engineering programs. On November 15, 2017,
the gas plant made a total of 979 B/D of liquids, or a yield of 15.1 STB/MMscf. If the plant was operating at 100%
efficiency, the plant could have theoretically made 1,586 B/D of liquids, or a total yield of 24.4 STB/MMscf. In
fairness, 100% plant efficiency is not achievable but certainly 85% should be achieved. This would mean a propane
yield of 903 B/D (1065 x 0.85), or a total daily production of 1,427 B/D of liquids. This should be a primary focus in
the future.

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Only 46% of the propane is being removed from the gas stream. Anything less than 85% of propane being
removed is considered a problem that needs to be corrected. This reduced efficiency is usually related to the
chiller not being cold enough, or reduced contact to allow separation. Some common causes for this are:

▪ Collapsed trays in contactor.


▪ Inefficient cooling compressor.
▪ Reduced efficiency in heat exchangers.
The first step in diagnosing the problem in the Provincia gas plant would be for the process engineers to run a
pressure drop and temperature survey across the entire process. The starting point would be the gas supply
header and then before and after every wide spot in the line (exchanger, compressor, condenser, separator, etc.)
and then compare the results against the design, or their model, if they have one. The plant has remote
monitoring and data recording of critical parameters in the gas plant and could aid in determining performance.

Assuming the contact trays are in working order, I have seen recovery efficiencies increase significantly with the
addition of turbo-expanders to the cooling system. Of course, this would involve a lot of considerations and
possible re-design of many components in the plant to ensure they could function properly at significantly lower
temperatures.

Another possible opportunity to investigate is injecting of some or all butane into the crude sales line. Ordinarily,
the sales price of butane is less than that of crude, so there is possible money to be made. The refinery may not
like it, but as long as the Reid vapor pressure (RVP) meets specifications, it is legitimate. There would need to be
more investigation to determine if this option is viable.

Figure 6: Provincia long-term potential production forecast.

1.4.3 Future Production

The Provincia waterflood expansion is a major project. Similar to the Llanito and any other major project, there
will be capital costs (new water injection plant, new source wells, injection lines, new compression, etc.) and
future operating expenses incorporated into the costs. Recommendations are based on the assumption that it is
better to size equipment and facilities to meet the maximum expected rates, and to use the opportunity to
update equipment that will last the life of the field with lower maintenance and operating costs in the future.

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Recommendations will also be based on the outcome of the first phase of the QRI study for long-term potential.
Ecopetrol is wanting to drill 200 producers in the next couple of years in Provincia. In the QRI recommendations,
there will be 25 infill producers, 18 workovers (with re-perforations) and 59 producers directly tied to specific
injectors. There will also be 82 injection wells drilled and 16 source water wells, along with a new water treating
and injection facility. The compression capacity will have to be increased, and the gas plant capacity will also have
to be increased. The peak production as a result of these efforts will be 55,000 BOE/D.

It should be said that there is still work that needs to be done on the simulations for Provincia. The estimates
used for this report utilized the latest data available. The estimates for oil, water, and gas show an enormous step
change. The production profile in Figure 6 estimates production as orders of magnitude larger than the current
estimated production. The same will be true for the surface facilities required to produce this extra production.
The surface facilities (water injection plant, increased compression, and gas plant expansion) will also be orders of
magnitude of what is currently in Provincia.

Crude Oil
Table 4 shows the crude production expected at each of the two stations for a total of 30,136 BOPD. At this rate,
the most critical bottleneck would be the 8” crude pipeline from Provincia to the refinery in Barrancabermeja. In
addition to the Provincia crude, approximately 2,400 BOPD of Bonanza crude and about 6,000 BOPD of Petro S/C
crude also share the 8” pipeline to the refinery. Operational capacity of the pipeline is quoted as 15,000 BOPD,
while the theoretical capacity can range anywhere from 17,700 to 32,600 BOPD depending on the erosional
velocity criteria used. The GAP model will give a more accurate estimate of the true capacity which I would
estimate to be approximately 20,000 to 25,000 BOPD. Regardless, it does not matter since the total of all crude
throughput through this line will exceed 38,500 BOPD, which is beyond the capability of an 8” pipeline.

The most desirable option would be to install a larger pipeline to the refinery, possibly a 12” line. By using the
same right of way as the existing line it may speed up the process, but it will still require permitting, community
relations, not to mention the cost of the material and installation costs. Other possible options would be to utilize
the existing gas line to the refinery and send the refinery wet gas rather than removing the liquids; adding
pumping stations along the way; or even injecting friction reducers. But none of these other options look
attractive.

The feasibility of installing another line will need to be studied, but there is really no other option. The cost of this
new pipeline should be part of the capital costs for the waterflood expansion project.

Other bottlenecks in the system will be the oil transfer pumps and the single heater treater at Suerte. Two extra
transfer pumps would be required at Suerte. Ideally, another treater would be needed at Suerte because of the
unknown quantity of water and the sand problem. It gives more operational flexibility. At Santos, the crude
production would match the capacity of the combined bulk separators. There would be the need to add an
additional bulk separator given Provincia’s sand problem and the increasing water. The two treaters at Santos will
be operating at capacity. Again, another heater treater would be required because of the yet to be determined
amount of water that will be added to the station.

Produced Water
At this point, it is not known exactly how much water will be injected or produced as part of the Provincia
waterflood expansion program. It is safe to assume however, that the total injection rate should at least be equal
to the voidage rate at peak production, or 55,000 BOE/D. The reservoirs at Provincia behave as though they are

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depleting with lower pressures and increasing GORs. During the initial stages of water injection, much of the
water will be used for “fill-up” or re-saturation of gas in the reservoir, and it is not expected to see an immediate
rise in water production at the surface.

At present, oil and water are separated at the stations. The oil from the Suerte station is pumped to the Santos
station and then to the refinery. The water is disposed on the surface at each station. The extra crude from the
waterflood expansion will require the expansion of pumps and heater treaters as shown in the previous section.
Additional water production will only exacerbate this problem, but how much capacity is dependent on the
volume which is still unknown. Typically, when the water comes, and it is coming with corresponding oil increases,
it is not difficult to persuade management for the need for more pumps or separators.

Once separated, the produced water will then be pumped to the water treating facility. Depending on the location
of the treating facility (either Santos or Suerte) there will need to be trunk lines large enough to handle maximum
anticipated. The likely maximum volume of injection will be about 60,000 BWPD, or 70,000 BWPD, if you apply the
experience factor of water production. It would be safe to assume that the produced water volume will not
exceed that, or otherwise there would be a lot of recycling of water. So, each produced water line from the
stations should be capable of handling about 35,000 BWPD, or 10” pipelines.

Water Injection
The Provincia waterflood expansion calls for the drilling of 16 wells as source water for the waterflood. As was
mentioned in the Llanito section, the use of source water is highly recommended as opposed to surface water
sources. There are presently four source water wells in Provincia that provide water for the cooling systems on
the gas compressors (see Table 6).

Provincia Source Water


Permitted Volume Actual Volume
Station Well Name
(BPD) (BPD)
PW1 1,087 109
Suerte
PW2 1,087 299
Chaquita 7,608 870
Santos
Santos 6 1,630 1,071

Table 6: Provincia source wells.

QRI’s proposed waterflood expansion suggested the need for 16 source wells to provide injection water for the
project. If the project is looking to inject 60,000 BWPD, this is 3,750 BWPD for each source well. Table 6 shows the
current volume of water used in Provincia. It is not known which formation this water is producing from, or the
maximum rate from these wells. It seems a little ambitious to expect 3,750 BWPD from each well, but this is a
detail to be worked out later.

As was mentioned with Llanito, it is always best to have a single water treatment and injection facility, and this is
certainly the case with Provincia. The location for the facility can depend on several factors. Ideally, it should be
located near one of the existing stations to share some of the utilities. Proximity to the source wells is a
consideration. Also, proximity to the largest number of injection wells since high-pressure injection pipelines are
relatively expensive. Of course, available land, geography, and permits also factor into the location.

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Assuming the source wells are not completed in the Provincia reservoirs, it will be necessary to treat the water for
scale inhibition that could result from mixing the non-compatible waters. Another consideration is biocide
treatment to kill any sulfate reducing bacteria that might be present.

The injection pumps are very critical components in the operation of the field. Similar to the operating philosophy
for crude oil transfer pumps at the stations, it is desirable to have water injection pumps with the highest
reliability and it is also recommended to have a spare unit to improve the availability. Experience has shown that
the most reliable water injection pumps are multi-stage centrifugal pumps with electric motor drivers. These are
highly recommended. The expected availability of these types of units is easily in the range of 98.5 to 99%.
Reciprocating pumps with diesel or natural gas engines usually do not have as high an availability percentage,
especially at higher discharge pressures. That is not to say that engine-driven reciprocating pumps cannot have
low downtime percentages approaching those of electric motor driven centrifugal pumps, but it requires a very
robust maintenance program and it will never equal that of an electric motor driven multi-stage centrifugal pump.
Using the water injection pump and crude oil transfer pump analogy, there is a reason why it is much more
common to find electric driven centrifugal pumps being used as crude transfer pumps rather than anything else.

Another extremely important component of the water injection facility is the need remove as much solids from
the injection water as possible. When injecting produced water, there will most certainly be oil in the water.
Usually inlet settling tanks with sufficient retention time can take care of the oil and heavier solids. Media filters
that can be automatically backwashed are recommended to remove solids. The Nororiental pilot water injection
facility and the PTARI-221 facility have these. Depending on the solids dispersion, a flotation cell (used at the
PTARI-221 facility) can also be used. Cartridge type filters or fine mesh screens are not recommended. Cannot tell
you how many times I have seen them either bypassed or the internals removed.

Electrical power to drive the injection pumps, booster pumps, instrumentation, etc. should come from turbine
generators with back up from the utility power grid. In addition to utilizing current produced gas, turbine driven
generators are extremely reliable. Two units at the water facility would be recommended, and the ability to sell
excess power on the grid would be recommended.

Produced Gas
The methodology used to estimate the amount of gas produced was exactly the same as for determining the
crude oil rate. The peak BOE/D rate is estimated to be 55,000 BOE/D. The crude and gas rates were estimated
based on the same GOR that Provincia has now. As a result, the calculations show that Provincia could make as
much as 144.2 MMscf/D. This exceeds the current compression capacity (about 90 MMscf/D), as well as the gas
plant capacity of approximately 100 MMscf/D.

This is a lot of gas. In actuality, it is likely that the current GOR will go down once fill-up has been achieved and gas
is forced back into solution with the oil. A lot of free gas is breaking out in the reservoir as a result of the declining
pressure. This gas travels through the reservoir much easier than the oil. Once the gas is back in solution, this
problem stops.

It is difficult to project an accurate amount of gas that will be produced. While it is doubtful that the volume will
reach 144 MMscf/D, it is very likely that the produced gas rates will reach the capacity limits of the compressors
and gas plant. Actions will need to be taken to prepare for this scenario.

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Several recommendations have already been made that will improve the efficiency and availability of the existing
compressors. These included treatment and removal of scale in the cooling water, updating key technologies on
compressors (valves, governors, etc.), and improving overall maintenance. Nowhere will this be as important as it
will be in Provincia.

If the decided philosophy for current producers is to convert from gas lift to rod pumps, this will help reduce the
compression requirements. If, on the other hand, it is decided that the economics aren’t there to convert the
wells from gas lift, then this will add up to an additional 45 MMscf/D to the gas compression requirements. This
could mean that Provincia would need to compress as much as 190 MMscf/D of gas.

At present, gas lift looks like a desirable option because of the high GOR rates and the sand production. The new
wells will be completed with sand mitigation downhole, so the sand production will not be a consideration for
artificial lift methods. Once the waterflood commences, the reservoir pressure will start to increase and fill up
begins, whereby much of the current gas production will go back into solution with the oil. The current GOR will
reduce and the compression load will also reduce. Another option to reduce gas production and probably
accelerate fill-up and enhance recovery would be to shut-in anomalously high GOR wells. This would need to be
determined on a case-by-case basis.

If model forecasts confirm that total gas production will exceed the current capability at Provincia, then it needs
to be determined which is more economical. One option is to continue repairing the existing machines and then
add more gas engine driven reciprocating compressors as needed. Since units like are phasing out, it might be
possible to pick these up cheaply. Another option is a hybrid solution where the existing units are kept and
modified as required, but the additional compressors required will be centrifugal units. Or, the third option is to
basically build a new compression facility as part of the project.

The third option has the most capital outlay, but may pay out in the long run. The Provincia compressors have
been around a long time, and it looks like the Provincia Field will be producing for another 25 to 30 years. If going
with a new facility, centrifugal compressors are certainly recommended. Electric motors are the preferred method
for driving these machines. The electric power for these motors should come from turbine driven generators with
the utility grid as a backup. This opens the door to possibly selling excess power to the grid. A couple of the older
reciprocating compressors can be utilized at Lisama, where they will need about 5 MMscf/D extra compression,
and at Llanito where they also need another 5 MMscf/D.

In addition to exceeding compressor capacity, the volume of produced gas will also exceed the capacity of the
existing gas plant. Earlier, it was shown that the existing gas plant is not operating efficiently because it is not
recovering a high percentage of the propane. Conducting a survey of the existing plant is recommended, and
offering suggestions for increasing the efficiency of the current plant in order to recover an additional 400 to 500
B/D of propane. If the gas plant is operating at its capacity of 100 MMscf/D, the theoretical yield for propane (at
100% efficiency) would be 1,634 B/D. The plant is currently producing about 480 B/D of propane. It makes it even
more attractive to optimize the efficiency of the gas plant.

The next problem occurs when the inlet gas to the plant exceeds 100 MMscf/D. One solution would be to bypass
the liquids extraction and fractionating portion of the plant with the excess gas above 100 MMscf/D. The free
liquids (condensate) could drop out and be mixed with the crude as is done now. The excess wet gas could then
be delivered to the refinery with the 100 MMscf/D of dry gas. The disadvantage of this is that if the total inlet gas

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is 150 MMscf/D, as it possibly could be, then 50 MMscf/D of wet gas will not have propane/butane removed. This
is about 800 B/D of propane (Table 5) and 265 B/D of butane that would be lost.

It is not known how much it would cost or how difficult it would be to modify the Provincia gas plant to
accommodate at total of 150 MMscf/D of inlet gas. The Lisama gas plant had its capacity increased on to
occasions, so it is not impossible. It seems like to produce an extra 1,000 B/D of propane and butane, it would
certainly be worth investigating. The good news is that the existing 10” propane/butane line to the refinery is
large enough to handle the extra NGLs.

1.5 Summary
Reservoir studies show there is still much oil to be recovered and in all three Llanito, Lisama, and Provincia fields,
and the production life has been extended 20 to 25 years. There needs to be sufficient surface facilities and
equipment to effectively produce all of the crude and accompanying gas and water production without need for
curtailment.

This report lists strategic recommendations that should help improve efficiency and effectiveness of surface
facilities for current operations, and to make recommendations for future operations. These recommendations
were based on a brief visit to the field, and information collected in a relatively short time frame. They were also
based on significant experience from similar operations around the world. They reflect some of the best practices
and lessons learned during that period.

These recommendations are still strategic in nature, and further work needs to be done to flesh out these
recommendations and make them more tactical in nature. Several suggestions were made on how to address
specific concerns, but these too will need to be further studied in order to develop solutions that are economical
and practical.

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