Issue: October 2012

Special Focus

Integrating hydromechanical hole cleaning in drill pipe

While hole cleaning during drilling is generally considered to be well understood and a requirement for reaching the well target, many drillers still have difficulty properly managing the entire process. Less-than-optimal hole cleaning can lead to non-productive time, poor borehole quality, and loss of the drill string or even loss of the well.

New drill bit technology: Greater durability, faster ROPs equal better economics

Drill bit costs, although not insignificant, are a small part of total well expense. The largest factor, by far, in escalating well drilling costs is the number of days spent. The newer drill bit designs all have the same ultimate goals—durability, efficiency, speed and delivery of a high-quality wellbore. Days saved equal money saved. The keyword in modern drilling is control. As “unconventional” drilling becomes conventional, shale oil and gas reservoirs demand greater, more subtle control. With shale, PDC is the bit of choice, and while roller-cone technology is still valued for faster rates of penetration (ROP) and lower cost-per-foot, fixed-cutter bits now fulfill around 80% of hydrocarbon drilling. Hybrid drill bits, which have characteristics of both types, are finding a larger niche.

Sakhalin extended-reach well pushes ERD envelope to a world record

Extended-reach drilling (ERD) offers economical access to reserves that were previously out of reach. This access can be achieved from existing infrastructure, with the added benefit of a reduced environmental footprint. ExxonMobil, as operator of the Sakhalin I project, recently drilled and completed nine extended-reach wells at Odoptu field from shore, culminating with the world record extended-reach OP-11 well. The well reached a total depth of 12,345 m (1,784-m TVD and 11,479-m vertical section) in 60 days with less than 1% NPT.

Data and technology integration improve velocity analysis for seismic imaging

Since 2011, the future global supply of LNG looks increasingly more robust, with new supplies in planning in North America, East Africa (in particular, Mozambique and Tanzania), from the Eastern Mediterranean (Cyprus and Israel), Russia (i.e. planned Vladivostok, Shtockman and Yamal projects), and on a smaller scale from South America (i.e. Colombia). These new supplies, as and when they appear in the market over the course of the next decade, will provide significant competition to some of the large LNG-producing nations (e.g., Australia and Qatar). Already, some of the operators of Australia’s numerous planned liquefaction projects with some of the most expensive projects on a unit cost-of-supply basis worldwide, and faced with further increases in project costs, are beginning to recognize that they need to become more cost-competitive, if they are to find long-term buyers and prosper. On the other hand, Asian LNG buyers are keen to see these potential sources of supply help to dilute the oil-indexed pricing mechanisms that are forcing Asian buyers to pay much higher prices for their gas imports than North America and Europe. Herewith is a country-by-country report of the LNG supply trends throughout the world.

ShaleTech: Haynesville operators look to exports for relief

Despite being home to some of the most prolific gas wells in the U.S., the once-celebrated Haynesville-Bossier shale has been relegated to little more than an afterthought, as cellar-dwelling commodity prices and comparatively excessive drilling and completion costs force even the most resolute operators to shut in and await better times. For now, even the nation’s largest gas producer admits that profits are nearly impossible to come by for players in the non-liquid sectors, making new drilling an unjustified exercise. Rex Tillerson, the typically close-to-the-vest CEO of ExxonMobil, said the operator is making “no money” on domestic gas, going so far as to tell the Wall Street Journal in late June that “we are losing our shirts.”

Integrated systems reclaim cooling tower blowdown

South Africa’s coal-based synfuel producer, Sasol, has contributed to that country’s energy independence by supplying 30% of its fuel requirements. But when it needed additional processing and production capability at its 160,000-bpd coal-to-liquids (CTL) plant in Mpumalanga, the increased water demand placed potential constraints on the company’s expansion plans.

New R&D model offers ‘intellect on demand’

Under the auspices of the Texas Institute of Science (TxIS) in Richardson, the Global Research Alliance (GRA) draws from a database of more than 18,000 mainly post-graduate petroleum technologists scattered throughout the Eastern Hemisphere. In the face of R&D limitations imposed by the so-called “crew change” in the West, the GRA initiative was conceived to revolutionize global technology development in the petroleum sectors.

Political parties’ energy agendas compete and contrast

In next month’s U.S. election, the Presidency is at stake, all 435 members of the House of Representatives are up for election, and one-third of the 100 U.S. Senators face election. The Republicans control the House, and the Democrats control the Senate. While Republicans will likely retain control of the House, the election could change control of the Senate. Republicans need to gain three seats to control the Senate—if Republican challenger Mitt Romney defeats President Obama—and four if Obama wins (the Vice President breaks any tie votes in the Senate).

Regional Report: Middle East/North Africa- Even as the region experiences a high degree of instability, E&P activity remains high

The past 12 months have seen continuing instability in the Middle East and North Africa (MENA) region with the toppling of the regime in Libya, intensifying turmoil in Syria, and implementation of new sanctions against Iran. There have also been significant transitional changes, including the election of a new Egyptian president. Despite these events, oil-and-gas activity remains high, and investment in the region continues, even with new hydrocarbon provinces emerging. This review highlights key developments over the past year.

Viewing the subsurface in five dimensions

The oil and gas industry, including Shell, has spent many millions of dollars acquiring wide-azimuth (WAZ) seismic data around the world. The industry also continues to develop seismic acquisition strategies and processing tools to reduce data costs and optimally de-noise and image it. However, few tools are yet available to interpret the data in all five dimensions of the WAZ data space: two coordinates that position the seismic trace on the surface of the earth; one vertical time or depth axis; and two coordinates that relate the separation between the seismic source and the receiver in distance and angle (azimuth).
Geology & Geophysics

SEG annual meeting at a glance

With exploration activity booming and new technologies being developed to better assess resource potential, the Society of Exploration Geophysicists (SEG) 2012 Annual Meeting will bring together industry professionals from all over the globe to discuss the challenges, opportunities and innovations in the exploration business. In its 82nd year, SEG 2012 will be held in Las Vegas, Nevada, November 4-9, 2012. Themed “Sustainability, Humanitarian Outreach and Social Responsibility,” this year’s program will feature special sessions, technical luncheons, workshops and a series of discussion panels as part of the SEG Forum. This year, the SEG committee evaluated the highest number of abstract submissions—1,560—which will be presented in 116 sessions over the four-day event.

Drilling advances

Though it may not carry the panache of a fresh-out-of-the-yard drillship, the developers of a newly minted, shallow-water buoyant tower on location off Peru believe their unique brainchild fills a sorely needed niche in the offshore sector. The one-of-a-kind creation of a 50/50 joint venture between engineering and project management concern GMC, Horton Shallow Water Development and Horton Wison Deepwater, the multi-faceted CX-15 fixed-depth, shallow-water buoyant tower was installed late September on BPZ Energy’s Corvina field. Located in 175 ft of water, the newly engineered drilling and production tower will be connected later this year via subsea pipelines to the existing BPZ CX-11 platform, one mile away in Peruvian offshore block Z-1.

Energy Issues

Policy or platform, that is the question (to paraphrase The Bard). On the eve of the U.S. presidential election, and elections for various lesser offices, it is important to recognize the difference. The candidates’ energy platforms are part of a larger platform that comprises a list of the actions that a candidate supports, to appeal to the general public for the purpose of securing his/her election to office. On the other hand, an energy policy is the manner in which a given entity or government has decided to address energy issues. To be sure, both presidential candidates have energy platforms that will be discussed elsewhere in this publication. But, does the U.S. have an energy policy? Despite what most of you might think, the answer is yes. To determine what it is and how it evolved, we have to wander back in history a bit.

Executive Viewpoint

In the political climate our nation finds itself in leading up to November, it’s often hard to parse out the pandering from the policy. Both President Obama and Governor Romney’s energy talking points confirm the fact that our home-grown energy resources are one of America’s greatest assets. However, the Obama campaign cannot deny the administration’s paper trail on energy policy—a paper trail that is, without a doubt, punitive toward oil and natural gas production, especially here at home. During the 2012 Democratic National Convention (DNC), President Obama said his administration has offered policies to “develop a hundred-year supply of natural gas that’s right beneath our feet. If you choose this path, we can cut our oil imports in half by 2020, and support more than 600,000 new jobs in natural gas, alone.”

First Oil

I am, by nature, a clumsy person. I can stumble on a level floor. When we’re eating together, be aware of the potential for a glass spilling or fork flying. There’s hell to pay, when my regulatory enforcement authority (wife) discovers evidence of breakage—broken glass in a corner of the kitchen floor or a chip on a porcelain dish. As such, I have some sympathy for companies trying to regain composure in the aftermath of an oil spill. BP Vice President Morrison was in just such a position at a plenary session on “Offshore operational safety and its impacts” on Sept. 20 at the 2012 Rio Oil & Gas Conference. Chaired by Petrobras E&P Director José Miranda Formigli, the panel included operating company representatives Helga Nes, HSE Vice President for Statoil; and John Hollowell, Executive Vice President of Shell Upstream Americas. Representing the regulators were James Watson, Director, U.S. Bureau of Safety and Enforcement (BSEE) and Raphael Naves Moura, Superintendent of Operational Safety and Environment for ANP, Brazil’s regulatory agency.

Innovative thinkers

As a real-life Aquaman, Rod Stanley, CEO of OceanWorks International, has been fascinated by the ocean since childhood. From his days as curator of Australia’s first Oceanarium to pioneering some of the firsts in subsea robotics, Stanley’s passion for the deep sea has led him to explore near every major ocean on earth—and promote the design of ROV systems that manage the sea floor with the click of a button.

Oil and Gas in the Capitals

Russia’s oil and gas sector is now on the verge of a major reshaping, something with ample, possible political consequences. Factors contributing to this situation are now converging, both from inside and outside the country. The European situation is affecting Russia’s hydrocarbon industry. Oil and gas exports are likely to stagnate or even decline in the next year and perhaps into 2014, as the European economy enters a long recession. This is, of course, the result of the Euro crisis. In 2010, we saw Greece, Ireland and Portugal hit by this crisis. In 2011, it was the turn of Spain and Italy. By 2012, even France has been forced into harsh austerity measures. As a result, economic growth went negative and will remain that way through 2012. It is even possible that this recession could degenerate into a full-fledged depression, as the cumulative effects of austerity in a large number of important economies add their weight.

The Last Barrel

As you leaf through the pages of this issue, you will see several significant items of coverage related to energy issues in the Nov. 6 presidential election. In our humble opinion, as regards the future of the U.S. oil and gas industry, this is perhaps the most crucial election since World War II. Accordingly, we have worked hard to bring our readers a variety of substantial, objective pieces on energy issues, based on the facts and the current administration’s track record.

What’s new in exploration

The use of land seismic data is increasing, from sophisticated 3D programs in the Middle East and North Africa, to interior basins in China and shale plays in North America and Europe. High-definition 3D surveys will lead to future 4D efforts.

What's new in production

Since the problem with natural gas is excess production, too little demand, or both (the U.S. produces about 3 Bcf more than it can use), anything that helps goose the demand side would seem to make sense. A couple of years ago, a newspaper article about the future role of natural gas for powering vehicles debated the question of hybrid/electric versus natural gas used directly for engine fuel. A letter to the Houston Chronicle responded, “Using our natural gas resources to make electricity, which is then used to power electric motors, makes no sense whatever. The engines are there, the technology is there. The fuel is abundant and burns clean. Cut out the middleman! Run cars on CNG!”
News & Resources

Companies in the news

Industry at a glance

Meetings and Events

New products

People in industry

World of Oil and Gas

Industry At A Glance

International Offshore Rigs

International Offshore Rigs            

International Rotary Rig Count

International Rotary Rig Count

International Rotary Drilling Rigs

 International Rotary Drilling Rigs Graph            

US Gas Prices ($/MCF) & Production (BCFD)

US Gas Prices ($/MCF) & Production (BCFD)

World Oil Supply & Demand by Quarter

World Oil Supply & Demand by Quarter

Selected World Oil Prices

Selected World Oil Prices Graph ($/bbl)                           

U.S. Oil Production

U.S. Oil Production

U.S. Rotary Drilling Rigs Graph

US Rotary Drilling Rigs                                 

Rotary Rigs Running in US

Rotary Rigs Running in US                               

Workover Rig Count

Workover Rig Count

World Oil and NGL Production

World Oil and NGL Production                  


Coiled tubing equipment and applications are still evolving

Before the Allied invasion of Europe in 1944, British engineers developed and produced very long, continuous pipelines for transporting fuel from England to the Continent to supply the Allied armies.

Rib-steered motor technology extends CT drilling applications

The rib-steered motor (RSM) is a new directional coiled-tubing drilling system that offers the capability of drilling complex 3D well profiles. Tests in Alaskan fields show that RSM technology has significant advantages over bent-motor drilling.

CT used to clean sand from a low-BHP, large casing deepwater well

An integrated system used in the West Seno project proved to be a solution to sand clean-out problems. The key to success was to create an underbalanced condition that enabled sand particles to be lifted and kept suspended in the circulating fluid.

What’s new in coiled tubing?

Vol. 233 No. 10 ADVANCES IN COILED TUBING What’s new in coiled tubing?   Multistage fracs on coiled tubing NCS Energy Services has developed Multistage Unlimited technology as a more efficient, more economical alternative to plug-and-perf and ball-sleev

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