Unlocking the potential from UKCS low

deliverability reservoirs

Colin Cranfield (DTI)Pete Naylor (ECL Technology)

slide no. 2

Overview

• Background– PILOT vision

– Size of the prize

• DTI study– Literature review

– Meetings

– Workshop

• Ongoing activities

slide no. 3

PILOT - vision & challenges

• Maintaining UK production– 3 million boe/d in 2010

slide no. 4

Total UKCS production (million boe/d)

0

1

2

3

4

5

2000 2002 2004 2006 2008 2010

0

1

2

3

4

5

Possible developments

Probable developments - upside

Approved fields - upside

Probable developments - 2P

Approved fields - 2P

PILOT targets

slide no. 5

PILOT - vision & challenges

• Maintaining UK production– 3 million boe/d in 2010

• Production increments needed from– Brown fields

– Undeveloped discoveries

– Exploration and appraisal success

slide no. 6

Undeveloped Discoveries

• Significant UKCS potential resource

slide no. 7

0

5

10

15

20

25

30

35

Cumulativeproduction

Approvedfields

Likelydevelopments

Potentialadditional

Yet to find

Bill

ion

bo

e

high

low

low

high

P3

P2

P3

P2

UKCS - produced & remaining

• 300+ undeveloped discoveries

• > 6 BBOE reserves

slide no. 8

Undeveloped Discoveries

• Significant UKCS potential resource

• Technical challenges– Heavy oil

– HPHT

– Sour reservoirs

– Low deliverability

slide no. 9

Undeveloped Discoveries

• Significant UKCS potential resource

• New technical challenges– Heavy oil

– HPHT

– Sour reservoirs

– Low deliverability• Undeveloped Discoveries Workgroup survey

slide no. 10

UDW survey – development barriers

0

20

40

60

80

100

120

140

Reserves Subsurfaceissues

Welldeliverability

Fluid / surfaceissues

Dist. frominfrastructure

No

. of

hig

h s

core

s

slide no. 11

0

20

40

60

80

100

120

140

Reserves Subsurfaceissues

Welldeliverability

Fluid / surfaceissues

Dist. frominfrastructure

No

. of

hig

h s

core

s

UDW survey – development barriers

slide no. 12

DTI action on low deliverability

• Low deliverability is a barrier in at least 46 undeveloped discoveries

• 35 undeveloped discoveries examined in detail

Review literature

Collate data

Structured discussions

Interactive workshop

Disseminate results

slide no. 13

Literature review – 4Q 2000

• Many reasons for low deliverability– Industry does not focus on overall problem

• Established remedial techniques– Hydraulic fracturing

– Long deviated wells

• Relatively few novel techniques– Seismic

– Visco-elastic fracturing fluids

slide no. 14

Study - Indicative HCIIP distribution

• Aggregate undeveloped discoveries studied:– HCIIP > 2.5 billion boe– Technical reserves > 0.5 billion boe

WoS

NNS

CNS

SNS

By geographical area

Oil

Gas

Cond

By fluid type

slide no. 15

Mind maps to identify barriers

PORE SPACE

WELL&FACILITIES

MISC

FLUIDS

GEOLOGY

Barriers to Development?

slide no. 16

Mind maps to identify barriers

GEOLOGY

Barriers to Development?

impossible to mapbelow seismic resolution

definition of top/bottom

reservoir continuity

limited local extent

selection of geological model

limited data

slide no. 17

Mind maps to identify barriers

GEOLOGY

Barriers to Development?

impossible to mapbelow seismic resolution

definition of top/bottom

reservoir continuity

limited local extent

selection of geological model

limited data

slide no. 18

Mind maps to identify barriers

PORE SPACE

WELL&FACILITIES

MISC

GEOLOGY

FLUIDS

Barriers to Development?

low permillite

diagenesis

cost of wells

cost of tie-backs

too risky!

impossible to mapbelow seismic resolution

definition of top/bottom

reservoir continuity

limited local extent

selection of geological model

limited data

limited reserves

limited data

aquifer support?

BARRIERS

slide no. 19

Objectives networks for solutions

increasedeliverability

fracturingacidise

stimulation

slide no. 20

Objectives networks for solutions

increasedeliverability

'nuclear'frac

fracturing

proppantflowback

HPHTfrac

beef upcompletion

design

acidise

stimulation

slide no. 21

Objectives networks for solutions

increasedeliverability

improvesand

control

cheapergravel

packing

cheapexp'dablescreens

proveHPHT

screens

longerhorizon

gravel pk

copewith sandproduction

'nuclear'frac

fracturing

proppantflowback

HPHTfrac

beef upcompletion

design

HPHThoriz

drilling

HPHT wellcontrol

underbalancedrilling

welldesign

multi-lathigh angle

acidise

maxperf

seismic

teflonpipelines

downholepumpsgaslift

subseaseparation

multiphase

pumping

lowersep

press

modifieddesigncodes

subseapig launch

viscosifywater inj

IOR

bugs

wettabilityalteration

improveskin

sandmanage-ment

stimulation

maximizecontactwith res

improveflowline

performance

slide no. 22

0

10

20

30

40

50

Po

or

res

erv

oir

ch

ara

cte

ris

ati

on

Lo

w p

erm

Co

mp

art

me

nts

,th

in b

ed

s

Lo

w e

ne

rgy

Co

mm

ing

ling

Lo

w r

es

erv

es

Co

mm

erc

ial,

co

ntr

ac

tua

l

Infr

as

tru

ctu

re,

ulla

ge

We

ll, f

ac

iliti

es

,lic

en

ce

co

sts

Un

de

ve

lop

ed

re

se

rve

s (

%) Oil

Gas

Relative importance of barriers

Technical Barriers Non-technical

slide no. 23

0

10

20

30

40

50

60Im

pro

ve

dS

eis

mic

Ad

va

nc

ed

,c

he

ap

er

we

lls

Ch

ea

pe

r,e

ffe

cti

ve

fra

cc

ing

Ge

o. m

od

els

/a

na

log

ue

s

Sa

nd

ma

na

ge

me

nt

Co

mm

erc

ial,

co

ntr

ac

tua

l

Un

de

ve

lop

ed

re

se

rve

s (

%)

Oil

Gas

Relative importance of solutions

Technological Solutions Commercial

slide no. 24

Conclusions

• Primary technical barriers:– Uncertainties in reservoir characterisation

– Compartmentalisation

– Low permeability

• Solutions exist in many cases– Relatively few technology gaps

• Significant contractual / commercial barriers

• Future opportunities - what is required:– Change in culture

– Strategies to manage risk

slide no. 25

Recommendations

• Evaluate progress in key technological areas– Quantify potential benefits– Report successes / failures– Disseminate best practices

• Reduce risk– Collaboration– Field trials

• Review procurement practices– Focus on value

• Raise awareness– Technology champions

slide no. 26

Current strategies (1)

• DTI / PILOT– Fallow blocks /discoveries initiative

slide no. 27

Fallow process

Four years of no drilling, or no Development Programme four years after discovery

Doing all that canbe expected

Misalignment, Not economic,Commercial barriers

Market testing (12 – 18 months)

Divest/ReassignRelinquish

Retain

CLASS A CLASS B

Renewed activity?NO

YES

slide no. 28

Current strategies (2)

• DTI / PILOT– Fallow blocks / discoveries initiative

– Shortened licence terms for new licences

– Access to infrastructure

– Consultation on “promote” licences

– Availability of regional data

– UK-Norway North Sea co-operation

slide no. 29

Current strategies (3)

• DTI / PILOT– Commercial “Code of Practice”

– Study on technology uptake

• Brown field work group

• ITF solutions to low permeability

• Show-case events

slide no. 30

Potential timeline

2002 20032002

ITF Low perm. solutions

Code of practice

DTI fallow initiative Fallow assets onto LIFT

2004 2005

Increasing impact of specialist companies

PILOT 2005 target

Continuing efficiency and technology improvements

slide no. 31

Further information

• www.og.dti.gov.uk

• www.pilottaskforce.co.uk

• www.indigopool.com/publicchannel/uklift

• colin.cranfield@dti.gsi.gov.uk