Revista E&P - Marzo 2011

8/10/2019 Revista E&P - Marzo 2011

1/102

E P M A G . C O

Unconventional shale

development takes root

internationally

THE

M A R C H 2 0 1 1

Shale Gale

Operating Efficiency

Subsea Systems

Coiled Tubing

4-D Seismic

StimulationTechnology

Drill BitRecords

Operating Efficiency

Subsea Systems

Coiled Tubing

4-D Seismic

StimulationTechnology

Drill BitRecords

goes global


2/102

0000?

N N L

McJunkin

MRC

Red Man

Corporation

m

I

C

I

MIDFIELD

mnc

I Transmark

q

p

L+e. rating

c

A

nniversar

1921-2011

PIP[YARD

,

:

r-m

Global Supplier of Choice

oStrength oLongevity oDependability

Proud of Our

Past.

Prepared for Our Future.

......................................................................................... www.mrcpvf .com


3/102

OPERATING EFFICIENCY

Single-sweep methods offer efficiency gains

Small-diameter sonic logging tool opensaccess to challenging wells

Improve frontline practice through riskmanagement

4-D SEISMIC

Its all acquisitions fault

Refraction monitoring shows promise in heavy

oil field

COILED TUBING

Hybrid CT rigs enter the unconventional market

DRILL BIT RECORDS

Bit performance is indicative of success

STIMULATION TECHNOLOGY

Less is more

Adjusting fluid properties maximizesshale recovery

SUBSEA SYSTEMS

IO, IM position subsea system providers asvaluable partners

Subsea sampling delivers value

IndustryPULSE:Technology transfer stepsup the pace of R&D

Partnership is key to rapidly accelerating safe andreliable technologies to meet demand growth.

EXPLORATION & PRODUCTIONW O R L D W I D E C O V E R A G E

MARCH 2011VOLUME 84 ISSUE 3

A HART ENERGY PUBLICATION www.EPmag.com

COVER STORY

32

InternationalUnconventionalShale gas could soon be a

global resource.

6

WorldVIEW:Survival of the fittest

After years of hearing, Who are these guys? tinyERHC is poised for growth in the Gulf of Guinea.

10

Unconventional: Barnett

Barnett providesfuture returns

Why the Barnett might be a good investment.

40

42

46

49

52

57

61

6668

77

80

89 REGIONAL REPORT: WEST AFRICA

71


4/102

AS I SEE IT

Collaboration, innovation go hand in hand 5

MANAGEMENT REPORT

Five steps to turning the talent management tide 12

DIGITAL OIL FIELD

Cloud computing can be applied for reservoir modeling 17

Digital oil field creates real-time data fire hose 23

EXPLORATION TECHNOLOGY

Silicon Valley meets the oil patch 27

WELL CONSTRUCTION

New solution for an old problem 29

PRODUCTION OPTIMIZATIONA perfect storm? 31

TECH WATCH

Low-frequency seismic illuminates shale plays 84

TECH TRENDS

Innovations and new releases 86

INTERNATIONAL HIGHLIGHTS

Operators display global reach 94

ON THE MOVE/INDEX TO ADVERTISERS 99

LAST WORD

Knowledge is power 100

E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston, Texas 77057.Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149; 2 years (24 issues), US $279. Singlecopies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER: Send address changes to E&P, PO Box5800, Harlan, IA 51593. Address all non-subscriber correspondence to E&P, 1616 S. Voss Road, Suite 1000, Houston, Texas 77057; Telephone:713-260-6442. All subscriber inquiries should be addressed to E&P, PO Box 5800, Harlan, IA 51593; Telephone: 713-260-6442 Fax: [email protected] Copyright Hart Energy Publishing, LP, 2011. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine.No article may be reproduced or transmitted in whole or in parts by any means without written permission of the publisher, excepting that permission tophotocopy is granted t o users registered with Copyright Clearance Center/0164-8322/91 $3/$2. Indexed by Applied Science, Technology Index and Engineering I ndexInc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $25,000 for violations.

DEPARTMENTS AND COMMENTARY

COMING NEXT MONTH Exploration is the buzzword for the April issue of E&P. Senior Exploration Editor

Rhonda Duey provides a round-up of recent exploration activity, presenting advances in both land and marine

seismic and identifying some of the technologies being used to improve exploration success. Other features in the

issue include riser and subsea technologies and developments in directional drilling. The Bakken shale takes cen-

ter stage in the Unconventional Report for April, and Australia/New Zealand is the focus of the Regional Report.

Between issues of the magazine, remember to visit www.epmag.com to read exclusive articles on industry eventsand catch up on the latest oil and gas news.

ABOUT THE COVER Nabors Rig 520, now working in Irkutsk, Russia, is one of an

estimated 972 rigs active in the region in 2010, according to Douglas-Westwood. Although

Russia has considerable unconventional gas reserves, its vast conventional natural gas

resources (1,680 Tcf, according to the Energy Information Administration) will be the focus

of development in the near term. (Image courtesy of Nabors Drilling)

Because every

water-sensitive

formation is

different

we

ve created a

customizable

drilling

fluid system

that

wil l

get you

through all of

them

The water-base KL

A-SHIELD

system improves

drilling

performance

in the

most

challeng ing

formations. The

system reduces

clay accret ion

and

bit

ball ing for

hi

g

her

RO P , lower NPT and improved

hole cleaning.

Environmentall

y acceptable

in

virtuall

y

any

drilling

area

it

reduces treatment and disposal

costs on

land

and offshore.

Whatever water-sensitive

formation you

'

re up against

there

'

s

a KLA-SHIELD formulation

to get you through it.

M

i

SWACO

A Schlumberger Company

www.miswaco

.

slb.com

a

4


5/102

ONLINE CONTENT MARCH 2011

KazMunaiGas hits onshore oilKazakhstan state-owned KazMunaiGas

has made an oil discovery on theLiman Block in the country.

PREMIUM CONTENT Subscribe @ EPmag.com/explorationhighlights

EOG ups Bakken production with Elm Coulee fieldAn EOG Resources Inc. horizontal well on the northeastern flank ofElm Coulee field had flow-to-sales at a maximum gross rate of morethan 2,000 b/d of oil.

AVAILABLE ONLY ONLINE

Ernst & Young: Oil demandspikes exiting 2010

By Rebecca Torrellas, Online Editor

According to Ernst & Youngs quarterlyreport, strong global economic growth

at the close of 2010 created the sec-

ond biggest demand spike in the past

30 years.

Growing Hawkville

By Lauren Sjurseth, Online Editor

The team that discovered the Eagle

Ford shales Hawkville field tells how

they got ahead of the competition

and sowed the seeds of success.

Water managementis global issue

By Rhonda Duey, Senior Editor

Increased unconventional gas

production and coal degasification

are raising serious issues about

water use and disposal.

READTHELATESTEPmag.com

INDUSTRYNEWS

Anadarko hits oil, gas offshore Indonesia

Anadarko Petroleum Corp. encounteredapproximately 133 net ft (41 net m) of oil andnatural gas pay in Upper Miocene high-qualitydeltaic sandstones at its #1-Badik prospect inthe Tarakan Basin of Indonesia.

WEBINARS

Refining Active

Land Acquisition

Plays: Operators

Reduce Costs

and Bring

Uniformity to

Projects

Unconventional

Shale: An

International

Perspective

Young

Professionals:

Mastering Your

Career in the

Energy Industry

Dielectric

Scanner

MULTIFREQUENCY

DIELECTRIC

DISPERSION SERVICE

It Speaks

Volumes

about Carbonates

,

Shaly

Sands,

and Heavy Oil

Radial profiling identif ies an addi -

tional 150

ft

of movable heavy oi l

in

Orinoco

thinl

y

bedded

sands

and

shales

that was not visible with

resistivity-based interpretation.

Get the

full story

about this

and other

case studies at www .slb.com/ds

Schiumberger

M l

M id

-

r :

4


6/102

DIGITAL

ASSET

Tied

up?

t

Connecting experts

so

information flows freely across your organization

is critical for asset optimization Known

for

collaborating closely

with

customers on their asset-level challenges

,

only

Halliburton

has

the

experience

,

technologies

and capab ilities

to

connect it al l . Indeed

,

Halliburton experts offer

proven and integrated geosteering,

drilling

and stimulation

workf lows

that

help

you

continually model

,

measure

and optimize your asset in real t ime .Which gives you

the

power to

make the right

choices-ensuring

that you

'

re tied in

,

not

tied

up.

Tie

in.

To

get

there

faster

,

skip the

bottlenecks.

What

'

s your chal lenge?

For solutions , go to Halliburton

.

com/digitalasset.

Solving

challenges.

HALLIBURTON

?

?

J


7/102

Technology advances cannot happen without innovation. And innovation happensmore rapidly when more resources can be brought to bear.

At the GE Oil & Gas annual meeting in Florence, Italy, a few weeks ago, Claudi Santi-ago, company president and CEO, talked about the value of innovation and collabora-

tion, particularily in a world that is struggling to recover from a global recession.The fact that we need to innovate is paramount, Santiago said, and to truly create

value, there has to be collaboration. It is absolutely critical. Partnering will be particu-larly essential in the coming years as the industry works to develop equipment that ismore ecologically sound and to extend equipment life. We will continue to innovateand deploy more and more technology that is eco-friendly, he said.

Those new technologies will include more monitoring equipment. And in the wakeof the Macondo incident, they also will include sensors for BOPs. We are extendingthese capabilities to the subsea segment of the industry, Santiago said. We want to putmore software and more control in place.

The company invested US $200 million in plants and equipment in 2010 andincreased R&D spending by 10%. GE also deployed more than 700 more resources in

key regions. The objective in moving more resources into more places around theworld is to get closer to the customer, according to Sam Aquillano, vice president drilling and production for GE Oil & Gas. Co-location allows technology transfereven quicker, he said.

GE also has established new partnerships in China, India, Saudi Arabia, Kazakhstan,and Russia.

As national oil companies (NOCs) pursue efficiencies in operation, partneringbecomes more and more significant, and this fact is not lost on the NOCs.

Ahmad A. Al-Saadi, vice president of gas operations for Saudi Aramco, explained atthe annual meeting that collaboration has become standard operating procedure forSaudi Aramco.

Saudi Aramco is known to be the oil giant of the world, Al-Saadi said, but he noted

that oil is not the companys only focus. According to Al-Saadi, the countrys gas pro-duction is expected to grow by 30% in the next 10 years. Producing gas reserves effi-ciently will require new technologies, and Saudi Aramco intends to develop thosetechnologies in cooperation with companies like GE.

Some of the more practical goals of this collaboration, he said, are to work towardmeeting the demand for spare parts with local manufacturing, to allow access to alarge local young workforce, and to support new ventures with logistical and techni-cal assistance as well as workforce development.

The world needs more energy as much as 20MMboe/d in the next 10 years, Santiago said. Finding anddeveloping reserves on that scale is a daunting proposition.For that ambitious goal to be achieved, he said, companies

will have to begin incubating the future together.

As ISEE IT

EPmag.com | March 2011

1616 S. VOSS ROAD, STE 1000HOUSTON, TEXAS 77057

TEL: +1 713.260.6400FAX: +1 713.840.0923

www.EPmag.com

Collaboration, innovationgo hand in hand

5

Read more commentary at

EPmag.com

JUDY MURRAY

Editor

[email protected]

Editor JUDY [email protected]

Senior Editor RHONDA [email protected]

Senior Editor TAYVIS [email protected]

Senior Editor JO ANN [email protected]

Senior Editor RICHARD G. [email protected]

Contributing Editor DON LYLE

[email protected]

Associate Editor ASHLEY E. [email protected]

Corporate

Art DirectorALEXA [email protected]

Senior Graphic

Designer LAURA J. [email protected]

Production Director

& Reprint Sales JO LYNNE [email protected]

Manager,

Special Projects JO ANN [email protected]

Online Editor REBECCA [email protected]

Director of

Business Development ERIC [email protected]

Group Publisher RUSSELL [email protected]

Vice President, Digital Media

RONS DIXON

Senior Vice President, Consulting Group

E. KRISTINE KLAVERS

Executive Vice President and CFO

KEVIN F. HIGGINS

Executive Vice President

FREDERICK L. POTTER

President and Chief Executive Officer

RICHARD A. EICHLER

H A R T E N E R G Y


8/102

The sheer scale and immediacy of the demand forhydrocarbons to help spur global economic recovery

and growth cannot be underestimated.Simply to offset the depletion of reserves and meet

forecast increases expected to 2020, additional resourcesequivalent to approximately five times the oil capacitycurrently produced by Saudi Arabia and four times thegas capacity currently produced by Russia will berequired.

Opening up new E&P frontiers means that complextechnical issues must be tackled head-on.

Expediting progressVisionary engineering expertise is needed to conceptu-alize and swiftly introduce new technology systemsacross the industrys complex value chain, and clearly,

there can be no compromise: new technologies must besafe, reliable, and proven, enabling operators to miti-gate the potential HSE, financial, and reputational risksof being the early adopter.

Reliable innovation is integral to the GE Oil & Gasbusiness model. The company underpins deep domainknowledge and commitment to R&D with a new productintroduction system of linear tollgate validation and pro-totype testing to destruction so that to the greatestextent possible there is an understanding of the limits oftechnology prior to commercialization, installation, anddeployment.

Technology transfer or borrowing from GE sisterindustries is a key competitive differentiator for thecompany that has helped chart its progress over the lastdecade.

Technology transfer within the company means itapplies experience within other industrial businesses including aviation, healthcare, nuclear and the expert-

ise within GEs Global Research Centers very directly, forexample, exploiting aero-derivative gas turbines andmaterial science technologies, remote monitoring anddiagnostics capabilities, and also through people byexchanging senior engineers with GE Aviation.

Like GE Oil & Gas, every original equipment manu-facturer will lay claim to having world-class systems toincubate new technologies, backed by Six Sigma, Lean,and a range of proprietary approaches that underpinoperational business processes.

But, even for an industrial conglomerate with genuinetechnology and scale differentiators, world-class systems

simply are not enough to be able to adequately serveoperator customers. More than any other factor, part-nership is the key success in tomorrows global energyindustry.

The power of partneringThe oil and gas industry has shifted beyond pure-playtransactional order-supply relationships, to more mean-ingful partnerships where longer term goals, and oftenthe associated risks, are shared.

Partnership which to be successful must be deep,intimate, and consultative customer relationships have

been the critical factor determining GEs ability to con-sistently transform engineering vision to solution reality.

The concrete proof of this is the number of innovativeproducts the company has been able to develop in a rel-atively short time frame for the industry.

The new VetcoGray S-Series SVXT subsea tree is oneexample. With a pressure rating up to 6,500 psi and a

March 2011 | EPmag.com6

industryPULSE

Technology transfersteps up the pace of R&DPartnership is key to rapidly accelerating safe and reliable technologies to meet demand growth.

The new S-Series SVXT subsea tree is the result of intense customer partnership

and consultation at the design engineering stage with many operators, includ-

ing Shell UK, which confirmed the first order for installation in 1Q 2011 in the

maturing Southern North Sea. (Images courtesy of GE Oil & Gas)

Sam Aquillano, GE Oil & Gas


9/102

I have someone retiring after 33 years on the job.

I

have

someone

taking

33 years of experience

with him.

And

now

someone

with

just

3

years

has to do that job.

PO

SS

IB

LE

With new Human Centered Design

technologies from

Emerson , it's like the experience

never left.

Using our

deep insig

hts

into how your

peop

le perform

their

roles and tasks

,

Emerson

is designing all of

our

new products

based

on

the science

of Human Centered Design.

This

lets

us

embed

the same

experience and understanding that's walking through your plant

into

our control

and

monitoring technologies - making them

the

easiest

and

most intuitive

to

use.

Tasks are

accomplished

in fewer

steps

,

and with

greater

confidence

,

even when

relying on less

expertise

and specialization. It'

s the

certainty that jobs are

done

rig

ht

,no matter who

'

s doing

them. Find the

experience

you

'

ve been missing at

Emerson

Process.com

I

Experience

EMERSON..

Process Management

E M E R S O N

. C O N S I D ER

IT

S O L V E D .

?

f

GARY

IbATUSEK

s

aeasc

JEFF

KG`B`

a

s?e

?`

1


10/102


temperature range of between 0F and 250F (-18C to121C), this tree is 20% lighter than conventionaldesigns and has many new safety features that also havefundamental, repeat operational expenditure benefits,including eliminating the need for both a separate treecap and the deployment of an ROV or diver for installa-

tion. The SVXT is the result of intense customer part-nership and consultation at the design engineeringstage with many operators, including Shell UK, whichconfirmed the first order for installation in 1Q 2011 inthe maturing Southern North Sea.

The company soon will supply Chevron with its newSubsea MudLift Drilling pump system for deployment inearly 2012 in the first-ever commercial application ofdual gradient drilling (DGD) technology. DGD canreduce the number of casing strings required for deep-water drilling, enabling wells to be designed with largerdiameter completions and/or to reach deeper reservoir

depths previously inaccessible using conventional singlegradient drilling. The new pump can deliver up to 1,800gal/minute at discharge pressures up to 6,600 psi andcan handle solids up to 1.5 in. in diameter. This productis the result of long-term partnership and commitmentand follows rigorous prototype testing and a successfulfield trial carried out in 2001.

A third example is the VetcoGray MR-6H SE marinedrilling riser system, which fully automates marinedrilling riser makeup, increasing safety by removing peo-ple from a dangerous environment, while also helpingdecrease nonproductive time by speeding up operations.

The riser design is simple, with very few parts, anduses field-proven concepts and profiles that haveprovided many years of exemplary service. With

todays ultra-deepwater wells, this 3.5 million poundrated coupling automated riser system can help sig-nificantly reduce the time needed to deploy andretract the riser string while maintaining a highlypreloaded coupling. The VetcoGray MR-6H SE sys-tem represents a safety and efficiency advancementfor deepwater drilling.

All of these solutions build on the companysdeep domain knowledge and expertise, which helpsin clearly defining and addressing technical, envi-ronmental, schedule, and fiscal challenges.

Time and again, partnership is the single

critical factor in introducing the new and depend-able technology that the oil and gas industry needs.Partnership is the main ingredient that keeps thisindustry vibrant and full of engineering possibilities.

The nature of partnershipsPartnership also takes the form of technology transferand licensing agreements in areas that are critical to thefuture of global energy supply. In 2010, GE extended itsreach with strategic partnerships and technology trans-fer agreements in China, Asia, India, the Middle East,and Kazakhstan.

Partnering is critically important for companies thatwant to push the boundaries of their limitations. It is thefoundation of GEs business-wide company to countryapproach, which means localizing business to marketswhere the company operates, building on local capabili-ties, and developing local resources through skills devel-opment and training.

Partnership also means expanding operational foot-print to be closer to customers with field service engi-neers and facilities. Next year, GE will open a newGlobal Research Center in Rio de Janeiro, a US $100million investment that reflects a long-term commit-

ment to Brazil.Partnership requires companies to have the courage

to admit that no one player no single company hasall of the answers. Seeking out and developing meaning-ful partnerships is the surest means of accelerating thepace at which theindustry is able tounlock tomorrowshydrocarbons andto reach the oil andgas industrys fullestpotential.

The VetcoGray MR-6H SE marine drilling riser system fully

automates marine drilling riser makeup.

industryPULSE

EPmag.comREAD MORE ONLINE

There is moreto the story


11/102

f

MC

Tec

hnologies

Boost

your

performance

,

savi

ngs 8 saf

et

with our surface

wellhead technology.

FMC

Technolog

ies has improved

surface

wellhead

re l i ab i l i ty

b

y ap p

l

y

ing

advanced

sealing

technology

often used in our

subsea ap p

lications.

We have

eliminated

steps

i n d r i l l i ng and comp

l e t i o n

,

to

he l

p

you

save

rig

time

and

m a x i m i z e crew

safety.

And our s t r a t eg icall

y

located

manufacturing facilities and service bases

ensure t h a t

you get w h a t

you need the

m i n u t e

you

need it . So

don

t

settle

for

average when

you

can economicall

y

boost

long

-

term r e l i a b i l i t y ,

time

savings and safety with a sing le cal l

to

F M C Technolog

ies.

We put you first.

And keep

you ahead.

www.fmctechno logies.com

;MCT---o .

rl

I

s

OW

r


12/102

Survival of the fittest

After years of hearing, Who are these guys? tiny ERHC is poised for growth in theGulf of Guinea.


worldVIEW

There is an old saying that implies that the best sur-

prises often come in small packages.

Take, for instance, ERHC Energy Inc., a very small com-

pany that once had a very large concession in So Tom

and Prncipe. The company originally approached the

tiny nation to discuss environmental remediation. But thelocation of So Tom and Prncipe nestled in waters

adjacent to huge oil fields offshore Nigeria and Gabon

quickly caused the company to reassess its interest.

There seemed to be an opportunity offshore, said

Peter Ntephe, president and CEO of ERHC. On the

western side, the waters abut Nigeria, and on the eastern

side, the waters abut Equatorial Guinea and Gabon.

Here is this country bang in the middle of these oil-pro-

ducing territories.

ERHC established an exclusivity agreement with thegovernment stating that the company would help the

country set up an oil industry in exchange for a largepercentage of the revenues accruing from any eventual

production. Then things started to go very badly.

Piquing interestAs a public US company, ERHC was bound to report this

agreement. Bigger players who formerly had shown no

interest in the region suddenly sat up

and took notice.

Off the top of my head I can think

of three or four countries where the

same thing has happened, Ntephe

said. Already ERHC had helped thecountry set up a national petroleum

agency, but with other players inter-

ested, So Tom and Prncipe

decided to renegotiate the deal, even

going into arbitration at one point.

The company was in trouble.

Funds had been raised to do this

in the expectation that returns would

start at a particular time, he said.

Once the problems started, those

returns didnt come when expected,

and the progress needed to continue to have financing

lines open wasnt happening. Company officials also had

decided to abandon their other businesses to make So

Tom and Prncipe the companys sole focus, meaning

the company had no way to diversify its portfolio. Accord-

ing to Ntephe, the owner of the business began looking

for buyers with sufficient faith in the prospect and suffi-

cient financial power to turn the company around.

A West African businessman who runs the ChromeGroup took an interest, and that firm became a signifi-

cant shareholder in 2001. It immediately began working

with the So Tom and Prncipe government to renego-

tiate the terms of the original deal.

That necessarily involved giving up some of the rights

that the company already had, Ntephe said.

The JDZERHC went from having exclusive rights to the entire

region to getting preferential rights in certain blocks.But by then Nigeria had decided that some of the waters

in question actually belonged to it. Again, this is a storyyoull find in many countries, he said. Where the two

waters meet, theres always a dispute, especially when

theres oil believed to be involved.

Eventually the two countries agreed to establish a

joint development zone (JDZ). Companies that already

had secured rights in the JDZ retained those rights

under the new agreement, including

ERHC. Additionally, So Tom and

Prncipe declared its remaining waters

an exclusive economic zone (EEZ), and

ERHC had preferential rights in some of

these blocks as well.

Licensing roundsThe Joint Development Authority for the

JDZ held two licensing rounds in 2003

and 2004, and ERHC exercised its rights

in the second round. However, its per-

centage in each block was no more than

25% of the total. Company officials deter-

mined that they could not grow the com-

pany quickly enough to make bids ontheir own, so they sought partners with

Peter Ntephe

(Image courtesy: ERHC Energy Inc.)

Rhonda Duey, Senior Editor


13/102

whom they could bid for extra percentages, hoping for

operatorship.

The chairman of the company at the time led a team

that virtually crisscrossed the globe looking for partners,

Ntephe said. It was difficult because we were selling some-

thing that wasnt certain, and we were selling it on behalf

of a very small company that little was known about.

Eventually the company found partners for three of theblocks in the JDZ, resulting in the partnerships bidding

for and receiving additional rights and therefore operator-ship on those blocks. And again the questions began the

JDZ has had a licensing round, and this little company is

the operator how did that happen?

We were saying, Where were all of you when we were

receiving rejections, when doors were closing in our faces

on several continents? he said. Where were all of you

when we brought in world-class partners and together with

them put in bids for the additional rights that made us

operator?

Despite the success of the strategy, the first three part-

ners subsequently pulled out. Eventually ERHC brought

in two new partners, Sinopec and Addax. There weredark days when we were in trouble, Ntephe said. Our

business was cooked if we didnt get replacement opera-

tors. So it was more phone calls, cold calling, and working

all of our networks.

Under investigationMore bad news was to come. Barely a month after signing

production-sharing contracts with the two partners, ERHC

came under investigation due to its acreage holdings. No

charges were filed, but Ntephe said that fraud was investi-

gated. Having always been a public company, ERHC had a

significant number of documents that it

had to turn over to the investigators, even-

tually filling 106 boxes.

The investigators turned up nothing,but the pressure affected the company

severely. This was at the point where we

had secured the rights, secured significant

positions in West Africa, and were ready to

build on it, he said. That was what was

expected. And then the investigations hit.

The company took a strategy of arresting

any retrogression that might have hap-

pened and maintaining its position. A lack

of rigs made drilling difficult in 2008, but

by 2009, ERHC and its partners began

drilling, spudding five wells between August2009 and January 2010. Despite the signifi-

cant initial setbacks, it still was the first part-

nership to drill in any of the blocks of the JDZ awarded in

the 2004 licensing round. Natural gas shows were found in

three of the wells, and they continue to be evaluated.

The exploration phase of the contract has been

extended to March 2011 to take into account the fact that

rigs were obtained later than initially expected. Ntephe

said he hopes by then the partners will have enough infor-

mation from the first five wells to determine how to pro-

ceed. There is still a lot of acreage, a lot of interpretation,

and a lot of possibility, he said.Meanwhile, in the EEZ, ERHC has 100% rights with no

signature bonus in two blocks and 15% rights with signa-

ture bonus in two more. It has exercised its 100% rights in

blocks 4 and 11. Once the bids are reviewed, the company

again will seek partners to help develop that acreage. It is

not likely to be as hard a sell this time.

We now have a track record because weve done this

successfully in the JDZ, he said.

The company also now has a more diversified portfolio

with acreage in two separate areas, and it will continue to

explore West African waters. With several West Africans in

positions of power at the company, Ntephe believes ERHChas a bit of home-field advantage over other companies

that might not be as familiar with local customs.

When people ask how weve done it, its because we

know the terrain; we know the lay of the land, he said.

Even though we are an American company, when we

walk into the room, the people were visiting think, Those

guys sure look familiar.

But he also sees a uniquely American aspect to ERHC.

Where other people see constraints, we see opportunity,

he said. These are the fundamental facets of the Ameri-

can dream.

EPmag.com | March 2011 11

ERHC has acreage positions in So Tom and Prncipes EEZ as well as the JDZ thatthe country shares with Nigeria. (Map courtesy of ERHC; source ANP-STP)

worldVIEW


14/102

Workforce management issues have been a serious

concern among oil and gas companies for some

time. If not addressed, these issues potentially could have a

negative impact on a companys performance and growth.

First, there is the big crew change. Thousands of babyboomers are becoming newly eligible for retirement on a

daily basis. With a significant age gap between these older,

skilled workers and the younger set which on average

fall between 24 and 35 years old there is concern as to

how best to capture and share boomers valuable knowl-

edge before they leave the company.

There also is a nuclear war for skilled workers. Demand

for people at all levels, particularly engineers, far exceeds

the supply. As a result, companies are fighting to recruit top

employees from competing firms and struggling to retain

their best people. Combine this talent void with other

human-capital management issues, such as successionmanagement, leadership development, and globalization,

and what might seem like a few organizational challenges

can spiral into a bigger business issue.

There are five key steps oil and gas companies can take

to turn their human resources (HR) strategies into a

competitive advantage.

A holistic approach to talent managementWhen talent-management strategies for learning and

development, employee performance management, and

succession planning are integrated and supported by the

right technology solution companies can get a clearerpicture of their workforce. This kind of intelligence allows

HR to make smarter decisions about their talent and more

quickly respond to changing business needs.

For oil and gas companies, there is real value in the

ability to identify high performers and future leaders to

track and evaluate employee performance and isolate andaddress skill gaps with targeted training as well as to ensure

that the right people are in the right roles and at the right

time all within a centralized system. Even better, data col-

lected in the system now can be tracked and reported.

Other benefits, such as organizational efficiencies and

automation of key processes, mean HR leaders can spend

less time mired in paperwork and tactics and more time

developing strategies that can support current and future

business needs.

A holistic approach to people management can have a

positive impact on the bottom line. According to analystfirm Bersin & Associates, companies with intermediate to

advanced levels of talent management performed better

financially during the recession and were able to generate

higher employee performance and lower overall volun-

tary turnover.

Transition to a development-drivenperformance management cultureThe ultimate goal for any company is to raise peoples

performance levels and achieve better business results.

Five steps to turningthe talent management tidePutting the right processes and tools in place can lead to greater employee retention

and productivity.

Charles Coy, Cornerstone OnDemand

Individualized career path pages help employees track their

progress and improve their skills. (Images courtesy of Corner-

stone OnDemand)


managementREPORT


15/102

W hen and where you need ALL

of the

right equipment for the job .. .

MIS

I

Well

Servi

G

Solutions

National Oilwell Varco

ission Prod r c

well service products

for well

servi ti

NOV

*

Mission

's

new line

of

Anson e

dimension to our extensive line

of

field

-

prov , ua

an

even wider range

of

well service applications.

-

CENTRIFUGAL PUMPS

- HIGH PRESSURE TEST UNITS

-

FLOWLINE

EQUIPMENT

-

RECIPROCATING PUMPS

AND

EXPENDABLE

- GATE VALVES

- WELLHEADS

-

SURFACE TEST TREES

-

VALVES AND SEATS

To learn

more about the full

line

of

NOV

Mission

well

servi

products

,

contact

your local

National

Oilwell Varco

representative

toda

y.

KW MATIONAL OILWELL

v

aRCo

04

Email

:

misslon

novcom

www.now.com/mimlon

as

I

ea

ucts

for

I

?

7

`

7


16/102

But simply identifying areas where an employee needs to

improve is not enough. Employees must be able to accessthe tools they need for increased knowledge and

improved skills.Incorporating learning as part of the performance

management process provides managers with the tools

needed to develop high-quality learning plans that pre-

pare high performers for leadership positions or address

competencies required for specific roles. This coaching

and development style of performance management can

result in increased productivity, higher employee engage-

ment, and improved retention.

The ability to manage performance can be challenging

when it comes to roles where employee performance is best

monitored in real time. Some talent management solutions

offer a performance observation checklist feature thatallows companies to assess and record an employees skills

and competencies while directly observing activities in the

field. Automating what once was an inefficient, paper-based

process makes it easier to track and validate proficiencies

or regulatory compliance with critical safety procedures.

When this capability is integrated with learning tools, man-

agers automatically can assign training when additional sup-

port is needed. Capturing and tracking this information in

a centralized system also helps HR leaders ensure regula-

tory reporting is accurate and timely.

Find the perfect learning blendChanging demographics have increased the need for

learning management particularly technical training

and leadership development. The most effective way of

delivering consistent, cost-friendly training to global, geo-

graphically dispersed workforces is through blendedlearning the combination of in-classroom training with

e-learning, virtual classrooms, and mobile learningoptions. This allows learning initiatives to be aligned

more closely to the needs of busy employees, who now

have more options for accessing self-service training any-

time, anywhere.

A successful blended learning strategy requires

thoughtful planning, engaging content, and a robust

user-friendly learning management system. Some pro-

grams fail because they do not meet the actual learning

needs of employees or because they fail to take the com-

panys learning culture into account. Programs must be

developed based on what, how, why, and when employees

need to learn. This approach also requires employees tobecome more engaged and take more responsibility for

their own training and development.

Rewrite the rules of succession planningSmart companies are moving away from succession man-

agement as a top-down process that focuses on only a few

key executives. Rather, they are expanding succession

planning deeper into the ranks of the company and

directly engaging employees in career management.

Technology can facilitate this collaboration between man-agers and employees in a way that supports both the

needs of the business (bench strength and talent mobil-ity) and the needs of the individual (professional growth

and career path).

New to the succession mix, online career-management

tools empower employees to take ownership of their

careers within a company, helping to improve engage-

ment and retention. With these tools, employees can cre-

ate an online profile to market their skills, competencies,

and career preferences such as the willingness to relo-

cate, specific geographical preferences, and long-term

career goals. For HR, this also provides a searchable data-

base for internal recruiting.

When succession processes are integrated with learningmanagement, HR leaders can allocate targeted leader-

ship courses for employees in the succession pipeline and

can seamlessly assign training to employees to close readi-

ness gaps and align career paths with reviews and goals.

Get socialMost companies are not sure how to get started with

social networking and collaboration tools, and they will

not allocate resources toward implementing these tech-

nologies until the benefits are clear. There also is a mis-perception of these tools being more for entertainment


managementREPORT

Companies that overcome negative attitudes about social network-

ing sites are discovering that an in-house site can encourage

greater communication, cooperation, and cross-discipline learning.


17/102


than for business purposes, resulting in lost productivity.

Social technologies can help to increase productivityand drive innovation by connecting employees with the

right knowledge and people across a company. The easi-est way to introduce these tools is to start small and focus

on wrapping social technologies around two areas.

Existing learning and development programs:It has been

observed that while 80% of training budgets are spent on

formal learning programs, 80% of what people actually

learn is informal, whether it is overheard at the water

cooler, passed down by a mentor, or shared in an email.

Building an online community around an existing train-

ing course helps to centralize and capture this informal

learning experience. Participants have a way to connect

with one another before, during, and after the course to

find commonalities and share knowledge. Employees arebetter able to connect with their mentors and foster a

richer relationship.Employee alumni networks:Aging workers leaving the

workforce possess large amounts of institutional knowl-

edge that is difficult or impossible to capture and share.

Alumni networks provide a social channel to engage

retirees so the business can continue to benefit from their

expertise even after they are no longer employed, easingthe brain drain.

Shifting to a more strategic, integrated talent-manage-

ment strategy takes time. It is wise to roll different HR ini-

tiatives out in phases and by geographical location. Since

field-based employees might not have a culture of remote

or self-service learning or performance management,

change-management initiatives are needed to persuade

those employees to access and use these tools.

Companies also should choose a technology solution

that is flexible, scalable, and configurable enough to sup-

port business needs; that can be implemented quickly and

easily; and that does not require additional IT resources orconstant version upgrades. But a technology solution isonly as good as the strategy it supports. HR leaders must

ensure talent processes are in line with business needs and

that they make sense for the company as a whole.

managementREPORT

Visit Us

at the DUO

Conference

23-25 May

Denver, CO

e

Most

Effective

Proppants

Downhole Proppant Scaling

Proppant Quality

SPE 135502

provides

practical information from field studies and

laboratory

testing

to

improve well

production

in shale

reservoirs.

This

document

confirms

that curable grain-to-grain

bonding technology is

crucial to downhole

proppant

performance.

Momentive*, the world's largest

supplier

of

specialty

proppants, invites

you

to visit

waterfrac.com.

There

you

will

learn more about

the

important

factors affecting downhole proppant performance and

how

our

curable

resin coated proppant technology helps you...

Get

the

Results

You Expect.

`flexion is now Momentive.

MOMENTI

E-

M;x. 0, , ..-.

M

Ct-i

Im.

.

01

T 1ielog/ GR

-

n(}(g(,

,

P( isn.i 201

040

Zero

c

0201 Molrcn2 Spedelty Qin 4400

0.

0

,

-

Wd

x tr8JEYrIB4 b

n>gf

u Mblsed b

y

M

r0Mwa S0v-

C118m0CM

b,

W

7

,?,

?

-

s

e

w

7

k,

Z PA


18/102

SURFACE SYSTEMS

v a

JY ?.

The

Industry

s First Integrated

Shale

Services

Specialists .

n r r l n n n A

n i r -

r

An industry

first

,

CAMSHALE'"

Services

provides one-stop

access

to Cameron '

s full range

of

flow equipment products

,

systems

and

services critical to your shale

gas

requirements

.

We provide the

technical expertise

,

systems innovation and safety leadership

needed to

increase your

operational efficiency

throughout

the

life of the

field. And

,

support

our

flexible

solutions

with

field

representatives, project management

experts and an

asset management

team

dedicated

to your success. From completion to production, you benefit from a seamless

transition and single source accountability. CAMSHALE Services. Maximizing

efficiency

fo r

the life of

the

field. Find out more at

www.c-a-

m.corrV CAMSHALE

?

COMPLETION

FRAC SUPPORT

SERVICES

FLUID M A N A G E M E N T

COMPRESSION

R A I S I N G

P E R F O R M A N C E .

T O G E T H E R T H

CAMERO

Lt

r

veiS

?ly

a

;

TM

HA L E

as

l l


19/102

What do online shopping and fluvial geostatistics have

in common? The initial answer might be not a lot,

but the longer answer could be surprising. The rise of

cloud computing means that the worlds most famous

online retailer and reservoir modeling in the oil and gasindustry might have a considerable amount in common.

While the idea of taking datasets away from physical

servers and hard drives and placing them on multiple vir-

tual servers on the Internet (the cloud) already has been

implemented in sectors such as government and financial

services, there also are clear applications for the oil and

gas industry and, in particular, reservoir management.

The importance of uncertaintyThere is an important need to reduce risk and better

quantify uncertainty in reservoir management today

something that is becoming more challenging as reser-voirs become more geologically complex and difficult

to reach.

The reservoir modeler normally is confronted with

sparse data and a need to generate countless realizations

and stochastic models to generate a range of possibilities

of what appears in the subsurface to reduce uncertainty.

Such complex and intensive processes require immense

amounts of computer power and many man hours. And

while supercomputers today are very fast, they still are

struggling to scale up to the growing amounts of work and

data at the speeds a user requires.

Enter the cloudThis is where cloud computing comes into its own. Com-

puters have been scaled up about as far as current technol-

ogy allows within a central processing unit, so the next

best option, as many operators already have discovered,

is to scale out through multiple clusters of computers,

often termed distributed computing.

Multiple clusters, which are used regularly in seismic

processing and reservoir simulation, have their downside.

The cost of ownership is high, IT infrastructures can be

complex and often not well integrated, and smaller opera-

tors and other organizations such as universities and think

tanks likely will be left behind due to accessibility issues.

Cloud computing provides all of the scalability benefits

of clusters and distributed computing with none of the

downside. Through a thin client device such as an iPad or

laptop, users can enjoy an elastic capacity of on-demand

data and computer power, zero maintenance costs, and

significantly reduced capital expenditure requirements.Cloud computing also can lead to a much more inte-

grated and seamless workflow. Gone are the days where

huge datasets need to be transferred to different sites and

time lags were common between different applications.

With cloud computing, reservoir modelers can enjoy real-

time collaboration across different projects and access

information from a single truly scalable system.

A transparent and structured reservoir modeling

workflow through cloud computing also can act as a

repository for years of expertise and modeling advances

(particularly important given the number of people leav-

ing the industry over the next few years), help publicize

and enforce best practices, and foster a uniform style and

standard of work across the operating company and

across physical locations. It also can ensure greater pro-

ductivity from reservoir asset teams, which is crucial in

todays environment.

digitalOIL FIELD

Cloud computing can beapplied for reservoir modelingModeling with Amazon? It is closer than ever.

Tyson Bridger, Emerson Process Management

Roxar RMS runs on the .rox database. (Images courtesy of

Emerson Process Management)



20/102

Ch

a

n

ge

Compact

formation evaluation

(FE)

tools are

half

the size of

most

conventional wireline equipment

and

offer eleven different

conveyance options. So now

you can

gain access to more hole

sizes and log problematic wells with less

risk

of getting

stuck

.

Lost

Time

to

On

Time

Weatherford

s

Compact

TM

logging

tools and Assure

TM

conveyance

options ensure logging

jobs

,

while

saving you

time and money

You also can

reduce nonproductive time and

increase operational

efficiency, all while receiving high-quality data .Log a

full spectrum

of

FE

data

,

including detailed

imaging-with

or

without wireline.

D Resistivity

43

coustics (

X-dipole)

CO)

orosity

and l i thology Formation imaging

Natural gamma

ray

,>

Formation

pressure

4

DnIl ing

Wireline

services

I

ump

letion

Production

Intervention

Cased-hole

Microseismic services

Openhole

Acoustics

Formation

testing

Imaging

Nuclear magnetic

resonance

Porest

y

hdogy

Resistivity

Subsurface evaluation ervices

We call

it Tactical Technology.

Visit weatherford

.

com

and

see how

we can

change the

way you

look

at all your

service

needs.

You 'll

call

it more options

and more service.

The change will do you good

1W

Weatherford'

weatherford.com

M

-

-

-

-

_


21/102

EPmag.com | March 2011

digitalOIL FIELD

If the benefits are so compelling, why have all operators not yet adopted cloud

computing? Security seems to be the number one barrier. To reach a level of

trust, it is helpful to distinguish between public and private clouds. Whereas a

public cloud entails the cloud being open to a largely unrestricted universe ofpotential users, the cloud also can be restricted to a single company with the

same robust security as internal IT servers. In fact, while larger operators are

likely to be most concerned about security, they also have the resources and

expertise to put internal clouds in place.

Just as passing credit card details over the Internet was treated with great skep-

ticism a few years back, this is largely an issue of educating users.

Cloud computing in reservoir modeling todayRecent research from IT analysts at IDC Energy Insights indicates that there is

rapid growth in spending for virtual machines. A number of operators also are

starting to develop internal clouds, spurred by the appeal of an on-demand,

elastic environment, as Catherine Madden of IDC puts it.Emersons portfolio of reservoir modeling, simulation, and history-matching

products is positioned to capitalize on the cloud-computing phenomenon.

There are several reasons for this. First, its software solutions run on the Linux

operating system, making the transition to the cloud more seamless. Today, of

the 500 fastest supercomputers in the world, 455 run on Linux, according to the

biannual Top 500 supercomputer list.

Emersons software architecture is focused on being flexible and agile with an

emphasis on thin clients, where computers are distributed over a network and

models can be built up quickly and accurately. Other reservoir management soft-

ware packages are more fat-client focused, where most resources are installed

locally, leading to more data at the desktop. The fat-client approach is less well-

suited to cloud computing today.Emerson also has a number of cluster-enabled products that fit comfortably

with cloud computing. For example, the Roxar Tempest simulator deploys simu-

lations across multiple computer nodes, and the automated history-matching

tool, Roxar EnABLE, generates multiple realizations and multiple simulator

instances across computer nodes. Elastic cloud computing allows the reservoir

modeler to scale the cluster according to the size of the problem.

Cloud computing also needs a coherent management strategy. It is in this con-

text that Emerson has developed a common data management platform and

architecture that is designed for scalability, can integrate all of its software func-

tions, and help facilitate and navigate reservoir management tools as part of

cloud computing.

The new platform, known as .rox, will consist of: Distributable applications, scripts, and plugins, enabling users to

access software;

A domain model of the subsurface that covers geophysics, geology, and reser-

voir engineering objects (reservoir.rox); and

An object database that exists for geological and production data

(source.rox).

The reservoir modeling software, Roxar RMS, already runs on this database.

Do not forget AmazonSo what do Amazon and fluvial geostatistics have in common? Amazon today is

much more than just an online book store. It also is one of the worlds leading

1W

Weatherford'

Tactical

Technology

TM

in

action:

Assure '

System

Conveyance

Options

Thru-Dnllpipe

Drilling

Compact' logging tools

are vital in slim-well

completion for Saudi

Aramco. The 3 7/8-in.

well

was safely logged by running

dual neutron,photodensity

and

microimager tools on

drillpipe. Data

was acquired

in memory mode.

Coiled

Tubing

4

hru-the-Bit

Technology

4

lickline and

Heavy -Duty Wireline

l

Wirel ine Drop-Off

w

Rpe-Conveyed

Logging

Compact tools maneuver

through tight spots

to

save

a

US

operator US$50

,

000

After two failed pipe-

conveyed

logging

attempts

by

another service company,

Compact tools avoided

further costs by reaching

bottom

on wireline

.

Compact well shuttle

saves

rig

time in Western

Siberia by transporting

tools inside drilipipe

in three

80 deviated

,

extended-reach wells.

Wireline-qualit

y openhole

logs were obtained, saving

96 hours of rig time versus

pipe-conveyed

logs.

Compact thru-tubing triple-

combo

avoids

workover

rig costs

and saves

2-1/2 days of production

in Middle East

b

y

logging

a high-pressure, producing

well

in 10 hours

.

Compact tools on

coiled tubing log

slim

,

Logging

whne

Drilling

horizontal exp

loration

well underbalanced

1

}

and

obtained

formation

evaluation (FE) data where

Wirel ine

previous attempts

had

failed.

Discover

how

our Assure conveyance

options can improve efficiency

and

results. Visit weatherford.com

,

or call

your nearby Weatherford representative.

You

could

be our

next

success story.

The

change

will do you

good'

weatherford.

com

0

O1 t titwmvdad

A n rgtav rein.

hco-po stag p'Wrotay and Wt5 to iWe adnrd technnpor.


22/102

providers of cloud computing space alongside companiessuch as Google, IBM, Microsoft, and Rackspace. Accord-

ing to a recent Business Week article, Amazon predicts

that its cloud-computing efforts could one day surpass its

retailing revenues.

With Amazon, it takes just a few commands to boot up

new virtual machines in seconds. Capacity is available on

demand and payable on usage. It also is important to note

that the cost to carry out processing on its offering, Ama-zon EC2 (Amazon Elastic Compute Cloud), is up to 10

times cheaper on Linux than it would be on Windows.

Emerson already has tested a number of its reservoir mod-

eling tools on Amazon. Using Roxar RMS on the .rox plat-

form, jobs can be distributed transparently to the cloud.

Data can be distributed using source.rox on Amazon S3,

Amazons storage service. Computations can be performed

on the correctly sized virtual cluster on Amazon EC2 with

control of the job taking place through Amazon Web Serv-

ices. Reservoir modelers also can choose to run the jobs

locally or in the cloud, depending on their need.

Cloud computing has the potential to usher in a revolu-tion in how the industry handles reservoir models and the

data it generates. If a link can continue to be provided

between cloud computing and improved reservoir manage-

ment economics, the sky literally could be the limit.

digitalOIL FIELD

Emerson already has tested a number of its reservoir modeling

tools on Amazon to positive effect. A system that relies on Ama-

zons S3 and EC2 offerings has a distinct structure.


COILED TUBIII

G

WELL

IOTERVERTIOO

c O n F E B E n C E E H H I B I T I B 0

5 6

April

2017

J

2011

The

Woodlands

,

Texas

,

USA

www.spe.org/events/ctwi

REGISTER

NOW

I c?TA

www.spe.org www.icata.com


23/102

Pump

downtime

out

of

your operations.

Dragon

delivers.

it 1

I

Frac

& Well

Service Pumps

Sand

Delivery

Mobile Blending

Centrifugal

,

Vacuum

&

Mud

Pumps

Pump Accessories

Parts & Service

l

I

1A

ti L

A.

Make

it

happen.

t-tne-art

u`5.

manutacturing tacintyturns out a wlae range of pumps

,

rom trac

igal

pumps

,

o

vacuum and

mud

pumps. It all begins with our hig

hly

experienced

np experts.

They emp

loyadvanced engineeringand keep close

control

over

ring

to

ensure

Dragon

pumps are designed and

built to be

high quality

, ong term

Every product

off

our

line is full

y

tested

.

Then

,

when

a

pump is put

to

work

in

ion

,

we continue

to

stand

behind it-

and

you

.

You

get

extra

support

,

including

recommendations

,

warranty

assistance

,24/7

access

to

parts

,

and

service

teams

Ipyou

onsite or in ourfour service centers

.

Whateveryou need to

fightdowntime

apyour

business

,

you. Make

it

happen.

?

-4

k

7S

.

r

. .

F

.

?

2

t ti

T

F

ti.

.

s L

P

a

N

4

0

Copyright

2010

Modern

G r o u p Inc . All

rights

reserved .

ru'

m

'

a r


24/102

Controlling

bacteria

without

chemical

biocides

is

now a

challen

g

e

solved.

Solving challenges:

In

conventional

and unconventional

fracture-stimulation treatments

,

the Halliburton CleanStream

system hel

ps protect the wellbore from

bacteria-while better

protecting

the environment. An industry f irst that

uses advanced ultraviolet

(UV) li

ght

technology,

this system

also reduces

employee exposure

to

traditional chemical

iocides

What

'

s

your

production enhancement challenge? For solutions go to

halliburton.com

/cleanstream or e-mail us

at

stimulation

:a

halliburton.com.

HALLIBURTON

PRODUCTION ENHANCEMENT

\a

t

i


25/102

The industrial revolution was about speed, scale, and

specialization. The information revolution is about

value, innovation, and collaboration. It all starts with

numbers and the art of making them speak.

Applying analyticsBusinessdictionary.com defines analytics as the field of

data analysis. According to the website, Analytics often

involve studying past historical data to research potential

trends, to analyze the effects of certain decisions or events,

or to evaluate the performance of a given tool or scenario.

The goal of analytics is to improve the business by gaining

knowledge which can be used to make improvements or

changes. Leading companies understand that mining

data faster and better than their competitors yields a com-

petitive advantage. This understanding has made data ana-

lytics mainstream.Many industries contend with the tsunami of data gener-

ated by networks, sensors, and computer processors, but

few face the additional challenge of data quality what to

do when the accuracy of the data feed is questionable or

the readings are considered unreliable. In the oil and gas

industry, this occurs regularly due to harsh environments

and difficult transmission conditions. Engineers have been

using their knowledge, common sense, and experience to

differentiate good from bad data, for instance identify-

ing meaningful spikes from insignificant blips. This was

marginally tenable when few data feeds where installed,

but the increased data volume and the decreased numberof petroleum engineers now render this exercise nearly

impossible. Today, heaps of data are gathered but cannot

be mined in real time. Instead, they are held in reserve

and used for after-the-fact forensic analysis when an inci-

dent happens. Real-time data capture (installed to enable

preventive analysis and actions) more often than not is

used for a much less attractive return on investment

a mere forensic tool to understand what went wrong.

Many attempts have been made to overcome this chal-

lenge. The two most common approaches revolve around

ruled-based and model-based technologies. Unfortunately,

while these methodologies work very well to solve other

challenges, the variability of data exceptions in upstream oiland gas sensor readings render these techniques ineffective.

A different approachClaude Shannons information theory handles these chal-

lenges and provides a novel solution to several oil and gas

data analytic problems. Classical information theory can

determine the bandwidth requirements for transmitting

messages of varying types. Information streams containing

rapid variations and complicated patterns (e.g., oil and gas

data streams) require greater bandwidth than streams con-

sisting of simple patterns with few variations. Shannon used

digitalOIL FIELD

Digital oil field createsreal-time data fire hoseThe digital oil field allows an enormous amount of real-time data to be collected. The challenge

is to move from raw data to actionable information.

Philippe Flichy and Tom Lovell, IO-hub


The scan finds obvious and subtle anomalies using complexity

changes. A non-obvious anomaly is detected (red circle) near the

end of the data stream. (Images courtesy of IO-hub)

The zoomed view shows details of the non-obvious anomaly detected

near the end of the data stream.


26/102

The Righ

Il

Combining the

best of ReedHycalog

aad

NOV Downhole technolo

to deliver

the most

comprehensiveBHAofferin

g

n the

industry

ReedHycalog Drill Bits Roller

Cone

,FixedCutter

and Impregnated Diamond

Performance

and Directional Drilling Motors-

HEMIDRIL'

,PowerPLUS'" ,Square

Motors

Intervention

and

Completion Tools Coiled

Tubing,

Wireline,

Flow Control

,

Completion Tools

Drilling

Tools

-

Jars

,

Agitator

'

Tools

,

Shock Tools

,

Intensifier

""

Tools

Non Mag

Products

Borehole Enlargement

-

On-Demand

Underreamers

,

Bi-Center Bits

,

StringTools

Coring

Services

-

onventional

and

Corion

Express

*

Coring

Services

Advanced Drilling Solutions

Drilling Optimizationand

Vibration Mitigation

Services

Fishing Tools-

Catch

Tools

,

Repair

and

Remedial Tools,Stroking

Tools

Service E ul

ment

-Make-U Break-

Out

Machines,Test

Stands

, Buckin Units

Contact

your NOV Downhole

representative

by

email

or on the

web for further information

onour complet

line

of

downhole products and services.

K

WMATIONAL OILWWELL VAR

Email: downhole

novcom

www.now

.

com/downho

pop-


27/102


digitalOIL FIELD

the term entropy to describe his measure of information

content. The higher the entropy of an information stream,

the more bandwidth it requires to transmit, or when com-

pressed, the more disk space it requires to store. Perhapssurprisingly, Shannons entropy relates directly to the

entropy of classical thermodynamics.

To help conceptualize this connection qualitatively

(and without arguing their truth or falsity), consider these

approximately equivalent statements: The universes

entropy is increasing, The universe is approaching per-

fect randomness, and The universe is approaching a

more complex ordering. The last, more nuanced state-

ment suggests entropy may be considered a direct measure

of complexity. Data streams can be compared by their

inherent complexity and their complexity relative to one

another. Some shifts in a data streams complexity signalchanges in the underlying well physics. Other shifts signal

normal responses to control actions. Still others reflect

erroneous sensor spikes and drift.

An analogy to some of Shannons less well-known work

may help. He used simple statistical data analytics for iden-

tifying the language used in a transmitted message. Simple

algorithms automatically built 2-D histograms of the occur-

rence frequency of letter pairs for typical messages sent

in several languages. For example, English language

messages very frequently contain th but not often cz

pairings. Every language analyzed has its own letter-pair

statistics. Information theory can characterize the com-plexity of each languages letter-pair probability distribu-

tion and distinguish these distributions from one another.

New messages can be classified among the known lan-

guages. A message in an unknown language is not classi-

fied but is identified as unknown or anomalous.

Likewise, data streams from an oil well (e.g., pressure,

temperature, flow, choke valve travel, etc.) contain their

own typical complexity. The various data streams might be

scanned for complexity (information entropy) singly or in

combination. Analyzed during normal well operations, a

data stream metaphorically may be speaking French. Dur-

ing methanol injection, the well might start speaking Russ-ian. Or, a new previously unseen condition may arise that

can be flagged as anomalous, perhaps requiring attention.

Using such methods, it is possible to detect precursor

events (predictive or not), major events, and data trends as

distinguished from erroneous sensor drift. The next step is

to accumulate data for massive real-time parallel correla-

tion of multiple events, offering and then exploiting a

holistic view of the data to better identify normal versus

abnormal operation. This allows the automated correlating

of data stream combinations neither presently done nor

considered feasible.

Applying algorithmsDuring the last year, IO-hub took a step in this direction,

receiving multiple high-frequency data streams for several

wells in the Gulf of Mexico. A typical well generated 15 to20 data streams with new data readings every few seconds,

covering months of operation. Half of the streams moni-

tored well conditions (e.g., various downhole, annulus,

and wellhead pressures and temperatures); the remain-

ing data streams recorded actions taken (e.g., methanol

injection, choke valve travel, and master and crossover

valve settings). Most of the time, pressure and tempera-

ture streams showed steady stable behavior. All streams

showed a fair number of irregular and very noticeable

short duration fluctuations. Faced with reams of data

from multiple wells, all clearly exhibiting many intermit-

tent data events, the engineer wanted to know whetherthe well was in good health. Being fire-hosed with data,

where should he spend his time?

IO-hub software scanned all data streams and

identified all anomalies (the intermittent data events

of unknown importance) in all data streams. When the

data were assembled into a time-based event table, it

quickly became clear that all anomalous events in the

pressure and temperature data were associated with at

least one causing action (e.g., methanol or chemical

injection, change in choke valve position, change in

crossover valve state, etc.). Learning this, the engineer

concluded the wells were behaving normally.This solution while done quickly, with substantial

time savings over typical largely manual methods was

not fully automatic. Work continues toward automating

the process. When done, the software detects and classi-

fies data events, alerting the petroleum engineers only to

1) as yet unclassified anomalies or 2) event classes the

engineers have indicated they want flagged.

Rather than mining numbers after the fact to under-

stand what went wrong, this approach offers the ability to

anticipate and avoid potentially catastrophic and costly

events. Furthermore, the technology lends itself to smart

recording and transmission by prioritizing the essentialdata from the mundane.

The information revolution is about a new approach

to data and determining its usefulness. This novel

approach automatically can clean and analyze data

to identify precursor

events in each data

stream, enhancing its

value by correlating this

analysis over multiple

concurrent real-time

data streams. EPmag.com

READ MORE ONLINE

There is moreto the story


28/102

E&P and FOR Related Services

t

L

4

4

l

L

D r i l l i n g

a n d

Completion

Well I n t e r v e n t i o n

Services

Dri l l i n g

Flu id

Services

\ \ ' i r e l ine Logg i n g and Perforation

Services

M u d Logg i ng

a n d

A u x i l i a r y

Services

Well

Testing and P r o d u c t i o n Serv ices

E&P

Program

Research a n d Desi

gn

Heavy

Oil

Re se rvo i r De ve lopme nt

Directional

D r i l l i n g

C e m e n t i n g

Coring

F o r m a t i o n a n d R e s e r v o i r

E v a l u a t i o n

b

b

4

L

L

l

Providing

Integrated

Solutions from G eolog ical

Research

Development

Program and

Well Desi

gn

to Well

Comp

letion.

E -m a i l :

m a r k e t i n g(

i c n l c . c n ;

m a r k e t i n g1 . g w d c (a:cnpc

.

c o m . c n

w w w . c n l c . c n i41 T e l : 8 6 - 1 0 - 5 9 2 8 5 6 9

//I \\

NL

\w`i?

?

I

S

y

r

r

4

f

y

,_

-:

.

Ili

?I

? ?

?

Ohl


29/102

Most geoscientists would agree that the more data

they can acquire and interpret, the more accu-

rate their reservoir model will be. But this often is eas-

ier said than done. Data acquisition is expensive and

time consuming, and often it is difficult to integrate

different datasets in a meaningful way.

A new company hopes to change that. Called NEOS

GeoSolutions, its goal is to integrate all geophysical

datasets gravity, magnetic, electromagnetic, radiomet-

ric, and hyperspectral with existing seismic, geologic,

and geochemical information to create a combinedand unique 3-D interpretation of the subsurface.

The value that we bring is fairly simple, said Jim Hol-

lis, president and CEO of NEOS. We apply and integrate

multiple geoscience methodologies. No one methodol-

ogy gives you the answer; it gives you an answer. By fusing

multiple methodologies, you get the answer.

This has long been the goal in geosciences, but it took

computers a while to catch up to the dream. Now the

company has developed the needed suite of technolo-

gies to acquire, manage, and integrate

these measurements, he said.

The company offers three solutions,which vary depending on how the

data are acquired and what one is try-

ing to do. Its neoSCAN programs help

geoscientists develop an understand-

ing of the macro-geological features at

the basin scale, including the thick-

ness of the sediment column; the

depth and likely areal extent of target

areas within the geologic column; and

the impact of large-scale folding, faulting, and thrusting.

Next is the neoBASIN, in which NEOS flies an air-

plane over a large area of interest, acquiring gravity,magnetic, and hyperspectral data to add to the inter-

pretation. These surveys typically are acquired under a

multiclient commercial model and are designed to

high-grade acreage and develop exploration leads.

Finally, there is the neoPROSPECTOR, which is

designed to identify drillable prospects. These projects

integrate high-resolution data acquired with a helicop-

ter with other available measurements and, in many

cases, identify look-alike prospects based on correlating

the measurements associated with known discoveries.

Data from all of these projects are integrated and

interpreted in a proprietary data management system

called the NeoSphere.What does NEOS have that other companies do not?

In addition to a strong management team and highly

qualified geoscientists, it has connections to Silicon Val-

ley through two of its primary backers, the venture firm

Kleiner Perkins Caufield & Byers and Bill Gates. Were

able to tap into the latest Silicon Valley technologies, like

cloud computing, social networking, crowd sourcing,

and intelligent search, Hollis said. For instance, one of

the relationships we have is with Google. They have put

a lot of effort into geospatial data man-

agement at Google Earth, and we have

access to those kinds of technologies aswe evolve our NeoSphere.

For now, NEOS confines its activities

to North and South America, where

programs are under way in California,

Colorado, and Argentina. However, it

recently got a new investor from the

Middle East that has a track record of

forging oil field services ventures with

Saudi Aramco and others in the region,

suggesting this might be the next area for expansion.

For Hollis, the excitement stems not only from addi-

tional opportunities in other parts of the world, butalso the step change his companys technology can pro-

vide for natural resource exploration.

If you want to introduce something new into this

business, you have to address the value equation on all

fronts, he said. We cant just deliver a better image or

be faster or be cheaper.

Weve got to deliver on all

three fronts simultane-

ously. And thats what I

believe we offer.

Silicon Valley meets the oil patchA new company combines geoscience expertise with compute power.

Read more commentary at

EPmag.com

RHONDA DUEYSenior Editor

[email protected]


explorationTECHNOLOGY

No one

methodology gives

you the answer; it

gives you an answer.

By fusing multiple

methodologies,

you get the answer.


30/102

How do you Introl bac1

,

and

c rater qual all at

once?

rah:

The Clear Choice

for Biocide Protection

For slick water

fractur ing

app

l icat ions

,

Petro-Flo '

is

the clear

choice.

The same

active

ingredient

used

to treat

billions

of gallons of drinking water makes

Petro-Flo

effective at

controlling bacteria

and

preventing new biofilm formation .

Its unique

chemis t ry

breaks

down biofilm from within ,

and

unlike other

biocides

,

does

not

combine

wi th

organics

to form

c a r c i n o g e n s or other

harmful b

yproducts.

Petro-Flo degrades

to simple table salt

,

and has

a

lower EPA toxicity rating

than many commonly used

products. The powerful oxidizing agent

in

Petro-Flo

helps improve

water

quality

,

making it

more

su i tab le

for

re -use .

It is the clear choice for

bacteria control

,

biofilm prevention and water

quality improvement.

Exclusivel

y of fered

throug

h Cudd

Energy Services.

4

L '1

J

I

ENERGY SERVICES

Jt1

-

i??, ie:ow?

www

.

cudd

.

com

r

_

roww.bio-cide

.

co m

Pet

ro-

?i

Na

9 u . . ?

?

I t

?? ? v

Ol i v ier Lazare

Vice

President

. New Business Development

Shell Exploration &

Production

k c3lr

+

?

1

t

M??

C,

x

,

r : +

,

y

?

w

? d? s

,

?

d:

? R

?

.

I,i

l

?

?_

E

L

I

1,) t

,

R+

,

,

.

A L r

?

/

1 N r

rl

? r

v ls

- -

11

V

w

?

a .

': a

8

t

,

/

'r,

I '1

-

I

L . A ry

,

r

a

rv

?

r

d

?

??f t

? A

ft> 1

` S

,

r

1{??'

?

f

r

1

o'

4;

i

n

r

n

.

4all

r,

.

i;

t

l

}: t

}

?

,?

Y` ?

n

?.

.

I I

,

Y

,

r r

? ??

M

,a ?L'

t

i. .

t

V

.

ir

' ';

I `

11

?

. , d : ,e

F.r

rr

i

?

r

,

? r S

I A

[

i

-

Y ? 4

, ?

? ?

t

`Ip

?

.t

4 .

Tai ;5

6,

f?

\

?

,

l ?, ;v??

Iv .

).A t

I,

.IYI

' i " :e

f

?M

'R

I

?1

?

_

?

,

:,

>: ; r,

\?

..

? I ) I

p

??

c?A

M ? 17 ,.

,y

4.

. i

?1'

I n? ,

Oa I

'

J ?.m h'

r

La

? \_

{ .I

7

u

v

.

IS ?

t.

1

,

F 11

?P r

,

r1

.

.? ,

.i

'/

?' :

.

? 1 ?

.

n

'

i

,

f

?

-

,

?1 .,

4 ,/

I,

E?,.

q

,

?w: il , ?;

.

1?

`tP'^

,1

,

^

`n

?

,

'N r

r

?

?

Y' 4t

}

:? .

. .L.

P . r ? ,

q ,

? h

..

. t

?'

.

'.

,?

.

i

r

r l

?

,

} .r

qd

?

.

:

L 0 , i a' I

,

?

,

,

. i i . ; ? ?

r

?

l 1

S

I

w

,

? I

1

, Y r

V1

r

I t )

t ? .

,

r

1 ? 1 F J n

"1

SI

Revista E&P - Marzo 2011

Documents

Transcript of Revista E&P - Marzo 2011