VOLUME 06 ISSUE 07-JULY 2013 07-JULY VOLUME 06 ISSUE

OILFIELD TECHNOLOGY MAGAZINE JULY 2013 www.energyglobal.com  UVUV_PKPaPUN HTLYPJHZ'^H[LYHKKP[P]LZJVT ¶OPNOS`LMMLJ[P]L  )PVJPKLZ Ž (U[PZJHSHU[Z  Ž *VU[HJ[\Z[VKH`!   HZPHWHJPÄJ'^H[LYHKKP[P]LZJVT  TPKKSLLHZ['^H[LYHKKP[P]LZJVT  L\YVWL'^H[LYHKKP[P]LZJVT  ^^^^H[LYHKKP[P]LZJVT  )>(Z\WWVY[ZVPSHUKNHZZLY]PJLJVTWHUPLZ  )LSSHZVSZJHSLPUOPIP[VYZHYLLU]PYVUTLU[HSS`  5L^)LSSHJPKL )LSSHJPKL  :\Z[HPUHISL:VS\[PVUZMVY :L]LYL:LY]PJL*VUKP[PVUZ )LSSHZVS  IPVJPKL[OH[PTWYV]LZOLHS[OHUKZHML[`>PKLS`\ZLK  PUO`KYH\SPJMYHJRPUN ‹ )>(>H[LY(KKP[P]LZPZ[OLNSVIHSSLHKLYPUZ\Z[HPUHISL ^H[LY[YLH[TLU[ZVS\[PVUZMVY[VWZPKLVYKV^UOVSL WYVK\J[PVUZLH^H[LYPUQLJ[PVUVYZX\LLaL[YLH[TLU[ ‹ ‹  PUV]LY JV\U[YPLZ  MYPLUKS`OPNOWLYMVYTHUJLHU[PZJHSHU[WVS`TLYZ 

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| 03 | EDITORIAL COMMENT | 41 | CLEANING UP CRUDE PRODUCTION Jay Keener, Produced Water Absorbents, USA, reveals the | 05 | WORLD NEWS development of a new water treatment technology designed to help ‘clean up’ the hydrocarbon industry.

| 10 | RISING INSECURITY | 45 | PLUGGING THE GAP IN LEAK DETECTION Keri Leicher, Consultancy Africa Intelligence, South Africa, takes a look Dr Frances Metcalfe, Cambridge Consultants, UK, looks at the range at West Africa’s slippery oil future. of automatic leak detection techniques currently in use and points out some key opportunities for improvement. | 14 | AFRICAN ADVENTURES Didier Lluch, , Spain, explains the importance of | 49 | A GUIDE TO OPERATING IN THE UNCONVENTIONAL supercomputers in the analysis of seismic imaging data as the global Sheldon Jahn and Jennifer McMurtry, KUDU, Canada, provide a oil and gas industry turns its focus towards offshore West Africa. troubleshooting guide for the use of PCPs in CBM operations.

| 18 | LOOKING INTO LA LUNA | 52 | Y NOT TAKE THE NEXT STEP? Edward Tovar & Nelbett Marfisi, Ecopetrol, and Elizabeth Diaz & Evan Sheline, ESP Completion Technologies, USA, shows how a new Joel Walls, Ingrain Inc., use digital rock physics (DRP) for reservoir approach helps solve the problems caused by weaknesses in the characterisation in the La Luna formation. standard ESP bypass system (Y-tool) design.

| 23 | EXCEED EXPECTATIONS | 57 | HAMMER TIME Alexander Darishchev, Pierre Lemouzy and Patrick Rouvroy, Jack Kolle, Oil States Energy Services/Tempress, USA, provides an Beicip-Franlab, France, outline some of the practical aspects of overview of some extended reach tools. modelling and flow simulation in the context of tight and reservoirs. | 62 | EXTENDING THE LIFE OF AGEING ASSETS | 31 | LIQUID GOLD Dr Liane Smith, Wood Group Intetech, UK, shows how integrity management and corrosion modelling tools provide a systemic Water usage in the O&G sector is growing rapidly – as are constraints. approach to ensuring the safe and reliable operation of ageing assets Oilfield Technology correspondent Gordon Cope explores some of the for oil and gas operators looking to squeeze more from mature challenges and solutions. reservoirs and facilities.

| 35 | KEEPING WATER SOFT | 66 | AVOIDING ARC FLASH AFTERMATH Michael Dejak, Eco-Tec Inc., Canada, unveils a next generation water Marty Trivette, GE, USA, outlines various strategies and technologies filtration technology for the oil and gas industry. that can be deployed to protect workers and speed recovery from arc flash incidents in oil and gas operations.

| 69 | BLOW YOUR WHISTLE? David Lawler, Forensic Risk Alliance, UK, reveals everything you wanted to know about whistleblowing, but were afraid to ask.

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Copyright © Palladian Publications Ltd 2013. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK. Images courtesy of www.bigstockphoto.com. Powerful. Proven. Dyna-Drill. Rotor Elastomer Stator

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Anna Scordos Editor

n the world of international business dealings, the newly deposits, is the subject of a territorial clash between China and emerging relationship between China and Iceland seems to the Philippines, with China consistently claiming that it has, Ibe fl ourishing. China’s state-owned oil company, CNOOC, “Indisputable sovereignty over the West Philippine Sea islands has been progressing its interest in exploration in the Arctic and their surrounding waters.” China is currently favouring region, and has recently joined with Eykon Energy, a young investment into gas resources and moving away from more Icelandic company, in a bid for an offshore exploration licence polluting resources like coal, as the country endures domestic in Northeast Iceland. If the partnership qualifi es for the round, and international pressure to clean up air pollution problems the licence is expected to be awarded this Autumn. Earlier and diversify its energy mix. this year, Iceland became the fi rst European country to sign CNOOC’s multi-billion dollar takeover of Canadian oil fi rm a free-trade agreement with China, and China has since Nexen, approved late last year, marked another movement by become a permanent Observer at the Arctic Council; an China into Canada’s oil reserves and China’s biggest overseas intergovernmental forum for Arctic governments and peoples, acquisition to date. However, Canadian Prime Minister which currently only admits 12 non-Arctic countries as Stephen Harper intimated that the deal was done with some ‘Observers’. Observers may propose projects through an Arctic reluctance on behalf of his Administration. When announcing State or a permanent participant, but fi nancial contributions the outcome of the deal, he said, “This is not the beginning of from Observers to any given project may not exceed the a trend, this is the end of a trend […] to be blunt, Canadians fi nancing from Arctic States. have not spent years reducing ownership of sectors of the China is certainly making proactive efforts to fi nd partners economy by our own governments only to see them bought in O&G ventures around the world. CNOOC and other Chinese and controlled by foreign governments instead.” Investment oil companies held meetings with Russia’s state-controlled by China, on a large scale, into the Canadian O&G industry OAO head, Igor Sechin, during his visit to China earlier is still an unknown undertaking for both parties, and future this year about potential offshore projects in the Russian Arctic. investment possibilities rely on the skilful management of In addition, Philippines-based company Philex Corp. existing deals. has said it has been holding discussions with CNOOC to form China does seem to be making some moves towards a partnership to explore and develop the gas-rich Recto Bank increased transparency in its international business dealings, (80 miles from Palawan in the Philippines) although these talks although it will continue to come up against oil producing remain preliminary, and any agreement formed between the nations suspicious of its motivations and reluctant to cede too two companies would have to respect the laws and regulations much control to China. This will undoubtedly change in time, set by their respective nations. Unfortunately, the target with the ebbs and fl ows of the global political and economic exploration area, which contains a large amount of gas-rich composition. Some things just need a little getting used to.

Managing Editor: James Little james.little@oilfi eldtechnology.com Editor: Anna Scordos anna.scordos@oilfi eldtechnology.com Editorial Assistant: David Bizley david.bizley@oilfi eldtechnology.com Rod Hardy Advertisement Director: Contact information >> rod.hardy@oilfi eldtechnology.com Ben Macleod Annual subscription £80 UK including postage/£95/e130 overseas (postage Advertisement Sales Executive: Oilfield Technology subscription rates: ben.macleod@oilfi eldtechnology.com airmail)/US$ 130 USA/Canada (postage airmail). Two year discounted rate £128 UK including postage/£152/e208 overseas Chris Lethbridge (postage airmail)/US$ 208 USA/Canada (postage airmail). Business Development Manager: eldtechnology.com chris.lethbridge@oilfi Subscription claims: Claims for non receipt of issues must be made within three months of publication of the issue or they Production: Natalie Callow will not be honoured without charge. natalie.callow@oilfi eldtechnology.com Applicable only to USA & Canada: Oilfield Technology Magazine (ISSN No: 1757-2134, USPS: 025-171) is published Website Manager: Tom Fullerton monthly by Palladian Publications Ltd GBR and distributed in the USA by SPP, 17B S Middlesex Ave, Monroe NJ 08831. tom.fullerton@oilfi eldtechnology.com Periodicals postage paid at New Brunswick, NJ. Website Editor: Callum O’Reilly Postmaster: Send address changes to Palladian Publications, 17B S Middlesex Ave, Monroe NJ 08831. [email protected] Victoria McConnell Circulation Manager: Palladian Publications Ltd, 15 South Street, Farnham, Surrey GU9 7QU, UK eldtechnology.com victoria.mcconnell@oilfi Tel: +44 (0) 1252 718 999 Fax: +44 (0) 1252 718 992 Subscriptions: Laura Cowell Website: www.energyglobal.com laura.cowell@oilfi eldtechnology.com Catherine Gower Reprint/Marketing Assistant: eldtechnology.com catherine.gower@oilfi OILFIELD TECHNOLOGY Publisher: Nigel Hardy July 2013  MULTI-STAGE FRACTURING

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// // Success in East African oilfi elds inbrief KAZAKHSTAN The East African-focused explorer, it had made another discovery in Kenya Uzuakbai Karabalin, the former boss Tullow Oil has announced positive flow at the Etuko-1 well. of KazMunaiGas (KMG), has replaced testing results from two wells drilled in Tullow has previously found Sauat Mynbayev as Kazakhstan’s Oil Kenya’s South Lokichar Basin. success in East Africa with its assets in Minister. Mynbayev resigned and moved According to a statement from Uganda’s Lake Albert Basin; Tullow and to a top role in KMG. the company, “In Kenya, [Tullow its partners have discovered more than Sources with links to the ministry has] significantly upgraded resource 1.2 billion bbls. of oil equivalent in the claimed that the change, which could be estimates for the South Lokichar Basin region. According to Tullow, “In Uganda, perceived as a demotion for Mynbayev, following the highly successful flow we have made substantial progress came about as a result of delays to testing of Ngamia and Twiga-South.” with partners and the Government commercial production at the giant The boosted resource estimates and expect to sign a Memorandum of Kashagan project. mean that the South Lokichar Basin Understanding, which will outline the Kashagan is predicted to produce could hold as much as 250 million bbls. key principles for the development of 370 000 bpd in its first phase, with an of oil with the potential for this figure the Lake Albert Basin development.” eventual ramp up to 450 000 bpd. to rise even higher. The Ngamia and The company went on to add that it Twiga-South wells are predicted to have expected results from its exploration a flow-rate of up to 5000 bpd. and appraisal programme across wells UK London’s mayor, Boris Johnson has Tullow’s CFO, Ian Springett said, in Kenya, Ethiopia, French Guiana, come out fully in favour of shale gas “We see the Lokichar Basin well on Norway and Mauritania in the second operations in and around the UK’s the way to commerciality and with the half of the year. capital city in order to meet growing potential to be similar in scale to the Despite the recent success, some energy demands in the future. Lake Albert Basin.” analysts have warned over the dangers Johnson was quoted as saying, The company also announced that of the company’s rising net debt. “Many people have not yet woken up to the reality that the population of // Shell // New GoM // // Wins London is growing faster than any city in Europe. ... if reserves of shale can be oil discovery US$ 50 million contract exploited in London we should leave no stone unturned, or unfracked, in the has announced a Petrofac has been awarded cause of keeping the lights on.” new deepwater oil discovery in the a US$ 50 million contract by . Oman Oil Company Exploration and BRAZIL Shell holds a 75% interest in the Production (OOCEP), a subsidiary Newly released figures show that Vicksburg ‘A’ well, located 75 miles of Oman Oil. The contract, which is has reached a new pre-salt offshore, which uncovered 152 m of net sceduled to last three years initially, production record of 322 100 bpd - a oil pay at a depth of just over 8000 m. will see Petrofac organise operations 11 000 bpd rise on last year’s figure. Early estimates have predicted and maintenance at two production The company also hit record output that the discovery may contain facilities currently under construction: at the Espírito Santo field, producing recoverable reserves of approximately The Musandam Gas Plant and the 322 700 bpd. 100 million bbls. of oil equivalent. Abu Tubul gas facility. Despite the record pre-salt output, This latest discovery comes in The Musandam plant will be made Brazil’s actual overall oil and gas addition to the potentially recoverable up of onshore facilities designed to production figures for May marked 500 million bbls. of oil equivalent receive fluids from offshore platforms the 14th consecutive month of decline. found in the neighbouring Appomattox in the West Bukha field; Abu Tubul will Total hydrocarbon output for May was discovery. Shell Upstream Americas be made up largely of production wells 1.892 million bpd, a 1.7% drop from Exploration’s Executive Vice President, conntected to a gas plant. April’s 1.924 million bpd. Mark Shuster said, “The results of the According to OOCEP, the facilities Vicksburg well strengthen our existing are “critical assets for developing deepwater [GoM] exploration portfolio.” Oman’s oil and gas capability.”

OILFIELD TECHNOLOGY July 2013 05 world news

diarydates // Egypt // Oil prices // Rosneft // Buys rest stabilise after coup of Itera for US$ 2.9 bn 3 - 6 September Offshore Europe climbed to a 14 month Rosneft has announced that it has Aberdeen, UK high of US$ 105.76/bbl as the Egyptian purchased the remaining 49% of the E: [email protected] President, Mohammed Morsi faced gas company, Itera for US$ 2.9 billion. www.offshore-europe.co.uk sustained unrest and mass protests. The deal comes as part of Rosneft Whilst Egypt itself does not contain CEO Igor Sechin’s plan to make 22 - 27 September globally significant oil and gas reserves, the company a global energy giant SEG International Exposition and 83rd approximately 2% of the world’s oil and reach gas production levels of Annual Meeting flows through the Suez Canal; there 100 billion m3 by 2020; by way of Houston, USA were also fears that the unrest could comparison, Rosneft only produced www.seg.org/web/annual-meeting-2013 spread further across the Middle East 13 billion m3 of natural gas in 2012. and potentially affect up to 25% of Sechin’s plan is likely closely tied in global production. with the Russian government’s scheme 30 September - 2 October Prices stabilised somewhat to maintain global influence and counter SPE ATCE after the Egyptian military staged a the effects of the US shale boom by New Orleans, USA coup on 4th July and promised new exporting vast amounts of natural gas E: [email protected] elections. According to the BBC, the to emerging markets in Asia. www.spe.org/atce/2013 Suez Canal Authority was quoted as A statement from Rosneft said that saying that it “has all the authorities the purchase “forms a stable platform 29 - 31 October needed for running the Canal without for [the] implementation of Rosneft’s OTC Brasil being limited by the laws and the gas strategy aimed at gas production Rio de Janeiro, Brazil systems of the Egyptian government.” increase.” E: [email protected] www.otcbrasil.org/2013 // Chesapeake // Sells US$ 1 billion of assets to Exco Resources

webnews Chesapeake Energy, the US gas producer has agreed to sell highlights US$ 1 billion worth of shale assets to Exco Resources as part of an ongoing process to increase liquidity and reduce long term debt. Ì Piper Alpha – Learning from major The assets covered by the sale include acreage in the disasters prolific Eagle Ford shale, covering approximately 55 000 acres spread across several counties with an overall production of Ì Cuadrilla exploration plan update 6100 boepd. Also included in the sale are 9600 acres of the 3 Kashagan production facilities start Haynesville shale which currently produce 114 million ft /d of Ì gas. up The completion of the sale should bring the total amount of money raised by Chesapeake this year to approximately US$ 3.6 billion. According to the company, the proceeds of the sale and net cash flow will allow Chesapeake to fully fund its To read more Scan for the about ENERGY GLOBAL 2013 Capex budget. The company’s end goal for asset sales these articles and for iPhone/iPad App this year is somewhere between US$ 4 billion and US$ 7 billion. more event listings go to: Chesapeake has been working to restore its finances after the collapse of US and significant debts built up by former CEO Aubrey McClendon left the company in Get the free mobile app at http://gettag.mobi financial difficulty. McCledon, was replaced earlier this year over shareholder concern about his personal finances.

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// Neft// // BP // Asks court to review Macondo compensation Arctic oil ready by Q4

BP is currently in the process of the US in future. The financial implications Gazprom Neft has announced that its asking a US court to reject a specific are also massive, with a ruling against BP initial oil production from the Arctic interpretation of a partial settlement over costing the company billions of dollars in Prirazlomnoye field will begin in Q4 this the oil spill caused as a result of the additional claims. year after delays. Deepwater Horizon disaster in 2010. A spokesman for BP, Geoff Morrell Start-up of the field had been BP’s argument is that Claims was quoted as saying, “We are asking delayed over safety fears after the rig was Administrator, Patrick Juneau has the Fifth Circuit to follow established legal boarded by Greenpeace activists last approved millions of dollars worth of false principles of contract law and interpret year. The development of Arctic oil and claims made by businesses as a result of the agreement as written and intended: gas reserves remains highly controversial, working to an incorrect interpretation of paying only those claimants who suffered with many claiming that risks posed by the agreement BP reached with lawyers actual losses.” adverse weather conditions and icebergs in 2012. Not only is the Claims Administrator’s are simply too great to ensure safe If the judgement goes against BP, misinterpretation contrary to the plain production; Shell’s recent difficulties with it could have significant long-term language of the settlement agreement its Kulluk drilling rig offshore Alaska have repercussions for the company in the and the intent of the parties, but it has done little to help sway public opinion. region; some analysts have pointed out ignited a feeding frenzy among trial Prirazlomnoye is Russia’s first that if BP feels it was treated unfairly and lawyers attempting to secure money for offshore Arctic oil development and is not subject to due process then it is likely themselves and their clients that neither expected to reach a peak production to be less confident about operating in deserves.” level of 19 000 bpd by 2019. // Tethys Petroleum // // Saudi Arabia // Gas // Brazil // Libra to net Buys Georgian assets drilling to intensify US$ 7 bn from bidders

Central Asia-focused Tethys Petroleum It has been revealed that Saudi Arabia Brazil’s ANP has said that it expects to has reported that it has made a has begun to increase its efforts to receive upwards of US$ 7 billion from series of asset purchases in the access new supplies of natural gas in a the winning bidder at the upcoming Republic of Georgia. bid to reduce its domestic oil demand. auction of the Libra offshore field. The The company will acquire a 56% A report by the Finanical Times states US$ 7 billion figure has risen considerably interest in production sharing contracts that analysts expect the world’s largest from the ANP’s earlier estimate of across the ‘Iberia’ project blocks XIA, XIM oil exporter to have increased its number US$ 4.6 billion and XIN in eastern Georgia, not far from of active rigs to 200 by late 2013/early With estimated recoverable reserves Tibilisi, the capital. The total area covered 2014 - up from 134 at the beginning of of 12 billion bbls. of oil, equivalent to the by the blocks is more than 6400 km2. this year. crude consumption of the US for a period The three production sharing Some of the increased rig activity can of approximately 18 months, Libra is the contracts are to cost Tethys be attributed to boosted production at the world’s largest single prospect to be put US$ 9.6 million, which will be paid Manifa oilfield, yet a significant portion of up for auction. It is expected that it will through the transfer of 12 million the increase is down to intensified efforts take roughly five years of development ordinary shares in the company and to access supplies of natural gas. Power before initial production from the field. US$ 4.4 million worth of funding towards stations in Saudi Arabia often use crude The sale is to be the first conducted the next US$ 10 million work programme. oil for fuel during the summer to meet under Brazil’s production sharing contract Tethys’ Executive Chairman and increased demand and this can tighten model, where the winning bidder will likely President, Dr David Robson, said, “The the availability of supplies for export. be the one that offers Brazil the largest independent evaluation carried out A former Aramco Executive Vice share of output to sell on its own behalf suggests a potential for several billion President, Sadad Ibrahim Al-Husseini, once development costs have been bbls. of oil in the acreage with direct said “The challenge is to maintain growth covered. Whoever wins, Brazilian law access to world markets and very in gas production and free more crude for states that Petrobras will be the operator attractive commercial terms.” export.” and put up 30% of all investment.

OILFIELD TECHNOLOGY 08 July 2013 CASING DESIGN FOR EXCEL "˜Ã œÀiÊUÊ- >œÜÊ7>ÌiÀÊ"vvà œÀiÊUÊ ii«Ê7>ÌiÀÊ"vvà œÀi >Ãi`ʜ˜Ê-Ì>˜`>À`Ê*Ê ˆ‡݈>Ê >VՏ>̈œ˜Ã Keri Leicher, Consultancy Africa Intelligence, South Africa, takes a look at West Africa’s slippery oil future.

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