Improved Oil Recovery

Meeting the Challenge

Jon Chadwick
Chairman – Shell Malaysia

SPE International IOR Conference

Kuala Lumpur, 20 October 2003

SPE IIORC, Oct ‘03

Slide 1
 Outline

• Setting the Scene

• Meeting the Challenge: some
examples
¾ Water injection
¾ Steam soak
¾ Polymer flood
¾ Gas injection (CO2)
¾ Future applications
• Challenges & Enablers
• Conclusions

SPE IIORC, Oct ‘03

Slide 2
Setting the Scene…

SPE IIORC, Oct ‘03

Slide 3
 Worldwide Production Decline
2005 2037
70
2047
60 USGS Est. of Ultimate Recovery 2% Growth
2037
Billion Barrels per Year

Probability UR Bln bbl

50 Low (95%) 2,248

Mean (Expected Value) 3,003 2026
40
High (5%) 3,896 Decline
R/P = 10
30
2005 EIA-DOE Estimates
1900-2125
History
20
Mean
Low (95%)
Campbell-Laherrere
10 High (5%) World Oil Production
Estimates, 1930-2050
0
1900 1925 1950 1975 2000 2025 2050 2075 2100 2125

Note: US volumes added to USGS foreign volumes to obtain world totals - EIA.

SPE IIORC, Oct ‘03

Slide 4
Worldwide Oil Reserves Replacement Ratio
10-year average 256% 10-year average 114%
400
956% 501%
350
300
RRR (%)

250
200
150
100
50
0
1981 1984 1987 1990 1993 1996 1999 2002

Source: BP
SPE IIORC, Oct ‘03
Slide 5
 IOR Definition & Processes

IOR

Production Enhancement Infill/Step-out Secondary Enhanced Oil Recovery

drilling Recovery
Gas flooding - CO2
Optimizing artificial lift Recompletion Water
flooding Gas flooding - Hydrocarbon
Increasing well stimulation Workover rich gas
Gas flooding
Reactivating idle wells Infill drilling (immiscible) Water alternating gas (WAG)

Changing completion Step-out drilling Microbial (MEOR)

strategy
Deepening Dilute surfactant/chemical
Debottlenecking facilities
Polymer
Upgrading facilities
Thermal

SPE IIORC, Oct ‘03

Slide 6
 Worldwide EOR Production
2.5

2.0
Millions of Barrels per Day

Chemical
1.5

Gas
1.0

0.5 Thermal

0.0
1986 1988 1990 1992 1994 1996 1998 2000 2002

Source: Oil and Gas Journal 2002

SPE IIORC, Oct ‘03
Slide 7
 Shell's IOR Activities

Water Injection
Current 2
)

Planned

EOR
Gas
Steam

SPE IIORC, Oct ‘03

Slide 8
 Malaysia Oil Production Outlook
- without further material exploration success
900
Focus
Focus areas
areas for
for oil:
oil:
800 Domestic consumption
•• IOR
IOR
700 •• Small
5% p.a. Small field
field development
development
L i q u i d P r o d u c ti o n k b /d

600 •• Deepwater
Deepwater development
development
3% p.a. •• Exploration
Exploration
500

400

300
•• Forecasted
Forecasted decline
decline from
from 2007
2007
200
•• Increasing
Increasing domestic
domestic consumption
consumption
100
•• Net
Net crude
crude importer
importer by
by ~2010
~2010 ??
0
2003 2005 2007 2009 2011 2013 2015
Year

Source: PETRONAS & EIA-DOE

SPE IIORC, Oct ‘03

Slide 9
IOR Activity in SM-EP Sabah Operations
N
Smart
Smart well
well
development
development
SB 303
Planned
Planned min.
min.
Block H filtered
filtered seawater
seawater
injection
injection

SF30 Barton
SB-302 S.Furious
Block K Kebabangan St.Joseph
Appraisal
Appraisal & &
Infill
Infill drilling
drilling

SBG
Gas
Gas injection
injection
SBJ

SB-301 Kota
Water
Water injection
injection Kinabalu
(dump
(dump flood)
flood) &
&
gas injection
gas injection

Kinabalu
Labuan
LCOT
LCOT // LIF
LIF
SABAH
0 50 100km

SPE IIORC, Oct ‘03

Slide 10
Meeting the Challenge:
some examples…

SPE IIORC, Oct ‘03

Slide 11
 Water Injection

…Extra oil & gas through dedicated reservoir management

SPE IIORC, Oct ‘03

Slide 12
Brent Field – Offshore UK

SPE IIORC, Oct ‘03

Slide 13
 Brent Field Depressurisation
...yielding additional recovery
800
Oil (Mb/d)
Gas (MMscf/d)
700

Depressurisation
600
Gas Extra 1.51.5
Extra TcfTc
500 Gas
gas Reserv
reserves

400 Gas Evolved

Gas
300
Oil
200

100

Waterflood Depressurisation
0
1976 1980 1985 1990 1995 2000 2005 2010

SPE IIORC, Oct ‘03

Slide 14
 Brent Reservoir Management
…critical for IOR realisation

• Surveillance
¾ Pressure & flow measurements
¾ Contact mapping
¾ GLR trends
¾ Web-based database

• Gascap monitoring
¾ Gascap sizes reviewed every 6 months
¾ Free gas replacement efficiency

• Reservoir cross-sections
¾ Updated maps per sub-cycle every 6 months

• Full-Field simulation model

¾ 3-D full-physics simulation model

SPE IIORC, Oct ‘03

Slide 15
 Steam Soak

…Producing difficult hydrocarbons by advancing well

technology

SPE IIORC, Oct ‘03

Slide 16
 Peace River - Canada
Alberta

er
Riv
e
ac
Pe
Athasbasca
Oil Sands
r
Peace Project Site ve
Ri
River

Peace River
Oil Sands an
hew
c
at
sk
S a Cold Lake
Oil Sands
rth
No Edmonton
¾ Discovered in 1951
¾ Lease holdings : 142 square miles,
100% Shell Share
Bo w
0 200
Calgary
¾ Bitumen in place : 7 billion bbl
km Riv er ¾ Fluvial / Estuarine sandstone reservoir,
15-35 m pay, 28% porosity, 50-3000 mD

SPE IIORC, Oct ‘03

Slide 17
 Evolution of Peace River Well Design
1979-1985 1993-1997 1996-1998
PCSD - Pressure Soak Radial - Original
SAGD
Cycle Steam Drive Design

Heated Oil and Condensate

Flow to Well

m
500
3-5m
Steam Injection
110 m
Steam injection via Production Well
basal water zone 500m of Wellbore

2000-2001 2001-2002
Soak Radial - Haybob Soak Radial - Tuning Fork

?
SPE IIORC, Oct ‘03
1000 m of Wellbore 1500 m of Wellbore Slide 18
 Peace River Production Performance
Current
Currentproduction
productionwith
with
14,000 58
58 wells is same as peakrate
wells is same as peak rateinin
SR2000 early
early‘90s
‘90swith
with200+
200+wells
wells
12,000
SR
Bitumen rate (bbl/d)

SAGD
10,000
HWDP
H Wells
8,000
PREP
PRISP
6,000

4,000

2,000

0
Jan-88

Jan-02
Jan-90

Jan-92

Jan-96
Jan-80

Jan-84

Jan-86

Jan-94

Jan-98

Jan-00
Jan-82

SPE IIORC, Oct ‘03

Slide 19
 Polymer Flood

...Well technology alone does not solve all problems

SPE IIORC, Oct ‘03

Slide 20
Marmul Field – Oman
Polymer Pilot Area

• 1.2 MMb movable STOIIP in pilot

area (Total field 2.5 bln bbl)
• High permeability sandstone (10 D)
• Medium oil (80 cP) in pilot area
• Natural flank water drive
• Low salinity brine (<7000 ppm)

SPE IIORC, Oct ‘03

Slide 21
 Marmul Pilot - Performance

• Protective package guaranteed polymer stability

• Excellent pilot response
• Additional oil 25-35% STOIIP
• Evaluation: Very successful
SPE IIORC, Oct ‘03
Slide 22
Future IOR Application in Oman ?

Waterflood
Primary

Polymer

SPE IIORC, Oct ‘03

Slide 23
 Gas Injection (CO2)

...Optimising ways of injection important

SPE IIORC, Oct ‘03

Slide 24
Typical CO2 Flood - Permian Basin

Reservoir
Reservoir/ /Process
ProcessCharacteristics
Characteristics
10-md
10-mdcarbonate
carbonate1-mile
1-miledeep
deepbearing
bearinglight
lightoil
oil
20-acre
20-acrewell
wellspacing
spacing
Primary
Primary/ /waterflood
waterfloodrecovers
recovers35%
35%STOIIP
STOIIP
Natural CO
Sources
2 EOR
EORadds
adds15% 15%STOIIP
STOIIPatat40
40bopd
bopdper
perwell
well
Uses
Uses11
11Mcf
McfCO
CO2 2/ /EOR
EORbbl*
bbl*atat11Bcf/d
Bcf/dper
perwell
well
* *half
halfpurchased,
purchased,half
halfrecycled
recycled

Permian
Basin

SPE IIORC, Oct ‘03

Slide 25
 Denver Unit Production / Injection History
Primary Secondary Tertiary

1000000

Water
Injection
100000
BBL/D, MCF/D

Oil
CO2 EOR
Injection
10000

Water
Production
1000
Jan-38 Jan-43 Jan-48 Jan-53 Jan-58 Jan-63 Jan-68 Jan-73 Jan-78 Jan-83 Jan-88 Jan-93 Jan-98

SPE IIORC, Oct ‘03

Slide 26
 CO2 Flooding - Effective use of Water Injection
0.16
Tapered WAG
Forecasted Recovery (fraction STOIIP)

0.14 Continuous CO2

WATER CO2
Continuous
0.12
Simple WAG
0.10
Simple WAG
0.08 Tapered WAG
0.06

0.04

0.02

0.00
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8
CO2 + Water Injected (fraction HCPV)
SPE IIORC, Oct ‘03
Slide 27
Future IOR / EOR Applications

¾ Acoustic stimulation
¾ Bacteria
¾ Air injection
¾ New gels
¾ Co-production of sands (heavy oil)

SPE IIORC, Oct ‘03

Slide 28
 IOR / EOR Challenges

¾ Optimising implementation timing

¾ Understanding impact of geological complexity
¾ Sustaining high level of surveillance
¾ Integrating surface & subsurface activities
¾ Overcoming high UTCs & operating costs

SPE IIORC, Oct ‘03

Slide 29
 IOR / EOR Enablers
• Organizational focus
¾ Expertise distribution
¾ Application of integrated study teams
¾ “Realising-the-Limit” application

• Technology advancements
¾ Wells (mono-diameter, snake wells)
¾ Smart fields, wells
¾ 3D subsurface geophones
¾ 4D seismic techniques
¾ Future applications

• Economic conditions / Tax relief

SPE IIORC, Oct ‘03
Slide 30
 Mono-Diameter Well Concept
Conventiona l W ell Pla n

36"

26"

20"

16"

1 3 -3 /8 "

1 1 -3 /4 "

9 -5 /8 "

7"

5 -1 /2 ”

T D = 2 5 ,0 0 0 ’

SPE IIORC, Oct ‘03

Slide 31
South Texas Expandables Field Trial
Thomas-Rife 15 – HP 181

• Flex rig with up to date data

acquisition facility

• Low cost environment

• Logistics & support

• Outside public glare

• Rig and location availability

SPE IIORC, Oct ‘03

Slide 32
 Production Enhancement :
Continuous gas lift optimisation in SF30
Lift gas manifold Production manifold

Oil and gas

production Test manifold

FLP

Lift gas rate CHP, Temp manual variable choke

with normally 256/64” choke
Lift gas

remote controllable valve

(on/off)
remote controllable flow control valve to allow for wells to be sent to
(variable) test / production manifolds
to allow variable lift gas rates
with manual override / backup

SF30 Smart field

• Remotely controlled
• Wells with multi-zone completions :
¾ Surface operated downhole control
valves for zonal changes
¾ Downhole pressure monitoring
• Surface measurement and control for
gaslift optimisation

SPE IIORC, Oct ‘03

Slide 33
 Production Enhancement :
Continuous gas lift optimisation in SF30
Oil and gas Production
production manifold
Test
FTHP FLP manifold

Lift gas rate CHP

Lift gas

Gas
P, T, Flow

Partial
Separator Stab
Pressure
Gross
Flow

Real-time All measured pressure,

adjustment of gas lift temperature and rate data

Artificial Intelligence optimisation model

SPE IIORC, Oct ‘03

Slide 34
 Conclusions

¾ Future oil increasingly dependent on IOR/ EOR

¾ Strong cost pressures
¾ Application of modern technology (multi-laterals, Smart wells)
¾ Efficient reservoir management required
¾ Look for innovative ways continuing (research)
¾ Fiscal incentives & environmental pressures may steer direction

SPE IIORC, Oct ‘03

Slide 35