Oct. 2001 Vol. 222 No. 10  Production

Perry A. Fischer,  Engineering Editor

Projects see first oil; new records

ExxonMobil began shipping its first load of Cerro Negro heavy crude in August. The 8.5°API-gravity crude is produced in Venezuela’s multi-billion bbl Orinoco belt, then diluted with naphtha to enable pipeline transport to an upgrader facility at the port of Jose. The new, $790-million upgrader complex received its first production in July. After upgrading the bitumen-like oil to 16°API, it is mixed with other crudes and shipped to Chalmette refinery in Louisiana. Production capacity is 120,000 bopd, which converts to 108,000 bopd of upgraded product. The Cerro Negro project should produce for 35 years and comprises ExxonMobil and PDVSA (42% stake each), and Germany’s Veba Oel (16%).

ExxonMobil and BP’s subsea Mica development in the deepwater Gulf of Mexico saw first oil – nearly three months ahead of schedule. The $330-million development is sited in 4,350 ft of water and is tied back to the Pompano platform, 29 mi to the northwest. This is a record tieback length in deep water. Mica currently produces 13,000 bopd and 140 MMcfgd from two wells. The field is a subsalt play and is located 100 mi south of Mobile, Alabama, with estimated reserves of 100 million boe.

Statoil produces. The Petrojarl I FPSO began production in late August from Glitne field in the Norwegian sector of the North Sea. Initial peak output will be nearly 40,000 bopd. The Petrojarl I was recently upgraded and is managed by PGS. It carries unique facilities for water reinjection and low-pressure gas-driven diesel engines, which minimize environmental impact.

Petrojarl I has been deployed in the North Sea for over 15 years and has made production possible from 10 small fields. Its previous assignment was on Yme field, which produced a cumulative 50 million bbl. Glitne is even smaller, with only 25 million bbl in reserves and should stay onstream for about 2-1/2 years.

Record-setting guns. BJ Services Co. has set a record in coiled-tubing conveyed perforating, so far as can be determined. The job was for Talisman Energy UK on Clyde Platform in the North Sea. An impressive 2,840-ft of 2-1/2 -in. perforating guns were deployed in a single coiled tubing run, to about a 17,800-ft depth. Several logistical and technical problems had to be overcome.

An 18,500-ft section of 2-in. coiled tubing was shipped on a lightweight transport carrier, then spooled onto a work reel onboard. The well had 2,500 ft of horizontal 4-1/2 -in. liner, with 97° maximum deviation. Before undertaking the coiled-tubing run, engineering simulations revealed the need to run a metal-to-metal friction reducer in the well to facilitate sliding the guns to TD. The primary target was the Fulmar formation.

Record-setting gravel pack. Halliburton Energy Services, together with an unnamed operator, have completed a 2,730-ft, 75,000-lb horizontal gravel pack in a well offshore Brazil. Spiral centralizers were employed and, despite a 6,560-ft, 60°-deviated openhole section, drag was kept below 10,000 lb. According to the service company, careful planning using computer simulations and proprietary software, packer assembly and screen-plug assembly were key to the successful record completion.

Buy Canadian. HIS Energy Group maintains a database (PEPS) to identify trends in policy, economics and transactions within our industry. It now includes 5,500 property and exploration transactions in more than 100 countries, as well as corporate takeovers. The database shows that Canadian and U.S. takeovers involving gas properties dominated worldwide reserve transactions thus far in 2001. This continues a trend that began in 2000, when 74% of all takeovers worldwide were located in Canada. U.S. takeovers were close behind, with 69% of worldwide takeover reserves.

However, there has been a pronounced shift away from U.S. takeovers in the first half of 2001. During that time, Canadian gas reserve acquisitions increased to 65% of all worldwide transactions, while those in the U.S. decreased to 33%. Even more striking is the price paid for Canadian reserves in 2001, which climbed from $4.88/boe in 1999, to $5.56/boe in 2000, to $6.75/boe this year. A similar, but less dramatic, trend occurred in the U.S., where acquisition prices increased from $6.05/boe in 1999, to $7.05 in 2001.

Weatherford purchases. Weatherford has been acquiring a lot of companies lately. In late August, the company purchased American Casedhole Specialists, Inc. and ACE Crane and Equipment Co. American Casedhole Specialists provides cased-hole wireline services, particularly in deep, high-pressure / high-temperature wells. The addition of Ace Crane brings 36-ton cranes and 15,000 psi, H₂S high-pressure lubricators.

Also in August, the company bought the artificial lift assets of Axelson and Guiberson Well Service from Halliburton Co. Axelson designs, manufactures and deploys downhole reciprocating-rod lift systems. Guiberson Well Service focuses on the engineering, application and deployment of hydraulic-lifting systems for oil wells, as well as products that support well-intervention activities for artificially lifted wells.

In July, Weatherford acquired Aberdeen-based Brit Bit Limited. BBL is an international manufacturer and supplier of drilling and completion technology, with a significant presence in North Sea and Australian markets. Last April, the company purchased another Aberdeen-based firm, Orwell Group plc, which provides services for drilling, fishing, remediation and marine applications.

Comment. As I write this in a hotel room (while at the SEG show), the terrorist-bombing saga is on the television. It occurs to me that this is part of the high price democracies pay for freedom: freedom to pursue happiness; freedom to do good work; and, regrettably, freedom to do great evil. It seems that the primary reason those misguided scum committed their heinous acts was to get the U.S. to bomb some city in Asia – they might yet succeed. All too often, folks who believe in something to the extreme just can’t wait to kill for it. Or die for it. It’s a shame they didn’t choose to live for it. My heartfelt sympathy and prayers to friends and families of the many victims.

Comments? Write: fischerp@gulfpub.com