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Monday, 29 March 2010

Bearing the Risk and Taking the Reward : Verkhnechonskoye

Kevin Wilson:
Drilling Director, VCNG

Back in 2007, Verkhnechonskoye (VC) project was considered uneconomic, yet today there's no doubt about the commercial potential of the field. First and foremost this is thanks to CAPEX optimization in drilling and infrastructure.

VCNG continues its drilling effort building the most complex wells in TNK-BP Geosteering to meet the unique geological challenges of the field. The company has recently achieved a record of 18 days per well thus reducing its initial drilling rate more than thrice! Kevin Wilson, VCNG Drilling Director, talks about the technological advances and work optimization approaches that ensured this remarkable acceleration.

The complexity of subsurface structure in Verkhnechonskoye (VC) field is unique and most of those complexities present challenges on drilling viewpoint.

To start with, the reservoir is very shallow (1,650 m deep), the productive horizon is less than 10 m. The reservoir is heterogeneous with areas of different permeability due to the mineral salt depositions. Therefore, the net pay zone in the 10-meter thin section is even smaller reaching about 3m.

These challenges impose the need for some front-end technology to ensure cost-effective drilling in VC field.

Hitting the Sweet Spot
When VCNG began drilling back in 2005, only vertical wells were built at the time. Considering the thin net pay of VC formation those wells did not show great productivity. Later, the drilling plan was thoroughly revised with a view to the geological structure of the reservoir. The project subsurface team proposed a development plan based on directional and horizontal wells rather than vertical wells. This helped halve the initially planned number of wells while maintaining overall productivity. However, due to the heterogeneous nature of VC formation some horizontal wells happened to be drilled in areas with poor permeability and had low flow rates.

The solution to boost the initial flow rates was found in 2009. The use of rotary steerable systems by Schlumberger while allowed the drilling bit to stay inside the sweet spot of the reservoir avoiding the salt depositions and poor permeability areas. The LWD technology ('logging while drilling') provides for the installation of sensors at the drilling bit that analyze the rock geophysics and identify the areas of best permeability to continue drilling. Thus, wells with a measured depth of 3,600 m and true vertical depth of mere 1,650 m are now being drilled in VC field.

Chin Seong Way, Operations Manager East Siberia, for Schlumberger Drilling and Measurement commented:
"In this field, PowerDrive was used in combination with the advanced LWD tools to enable optimum horizontal well placement. By utlising the systems high speed, real time data transfer system, experts within Schlumberger's DCS team could provide us updates and adjustments to allow the trajectory of the well to be optimized within the sweet spots for maximum reservoir contact. All of this was achieved with out compromising the ROP."

"Overall this has reduced the drilling costs and increased the oil production for our client."

The use of LWD geosteering increased the amount of oil produced from each well. The flow rates reach 200 tpd to 250 tpd per well as compared to the average flow rate of 100 tpd of the previously drilled wells. Obviously, the new technology proves cost-effective and helps pay back the investment much quicker.

Continuous Improvement
Yet another VC challenge facing the drilling engineers is the hard rock characteristic of Irkutsk Region. The hardest rock is in the surface sections due to the presence of chirts.

To increase the rate of penetration and thus reduce the number of days per well VCNG drilling engineers use high-torque slow-speed motors and put a lot of effort into the drilling bit design.

Originally VCNG used roller-cutter bits that were appropriate in the other areas of Russia where the rock is softer. Soon it was clear that those bits did not meet the challenge and harder bits were sought for. Success came with the use of PDC bits and since then VCNG drilling engineers have been refining the PDC design. Exact charts for each bit performance are developed to identify the areas for further improvement in bit run life, rate of penetration and rate of penetration gain versus cost of bit. So far the improvements are remarkable. A well section used to be drilled with four or five bits while now only one bit is used to drill a similar section.

However the fantastic success with PDC bits refers to the lower sections only. The next challenge for VCNG drilling team is efficient application of PDC technology in the upper portions of the hole where the rock is extremely hard.

Time-Based Approach
The use of high-torque slow-speed motors and PDC bits improves the rate of penetration and thus reduces the number of days per well. Introducing the innovative technology to VCNG required a new contractual business model that in itself is a huge factor that helped boost the drilling rate over the last several years.

Traditionally, the drilling contracts in Russia have a turn-key basis. Similar approach was used in VCNG to drill vertical wells back in 2005. The average drilling time was 150 days. The responsibility for drilling a well was entirely on the contractors, so the companies preferred to play on the safe side and follow Russian norms rather than take risk to introduce front-end international solutions. There was no real incentive for the contractor to optimize the drilling rate and productivity. This is where the day-work contracts come in.

Today VCNG takes all the risks of drilling decisions and engineering and the contractor is paid for the rental of its equipment and crew only. This concerns contractors working in all areas related to drilling, e.g. directional drilling, muds, cementing. The contractor's objective is to provide VCNG with a 100-percent working equipment (a rig, a mud pump, tools, etc.) to the required specification and follow the instructions exactly. If this objective is met the contractor is paid the rent no matter whether VCNG drilling decisions have been taken or the crew has to wait and whether these decisions prove efficient or not. If the work is done ahead of plan the contractor is paid a bonus. However there is a list of penalties for the contractor in case he fails to provide all the necessary equipment.

Today VCNG takes all the responsibility for drilling a well and reaps the reward of the innovative decisions taken. The company obtains the opportunity to use the equipment provided by the contractor to its full advantage and thus identify the most efficient approaches to reduce the drilling days.

Thus, in 2007 the drilling time in VCNG was reduced to less than 60 days and today an average well is drilled for about 24 days with a drilling record of 18 days achieved by KCA Deutag. However, VCNG drilling staff is continually revaluating the technical limit for the wells; they believe it is technically possible to drill even faster!

The day-work contracts serve yet another purpose, i.e. reducing the cost of construction per well. Following this new approach the contract cost is identified based on the number of working days rather than the number of wells. Therefore, the faster the wells are drilled, the more wells are built in a period of time, the cheaper each well is. The average cost per well today has nearly halved and is getting in the $3 mln range.

The use of innovative technology and the new approach to contractor management helped reduce the drilling time more than thrice over the last four years. The outstanding result provided for the update of 2009 drilling plan. Initially, 32 wells were planned to be built this year, yet the increased drilling rate made it possible to drill 10 more wells in 2009.

At the same time, VCNG drilling engineers have no doubt that there still remains areas for technical improvement that will bring about new success in the future.

Yaroslav Gordeev,
Subsurface Director, VCNG

Verkhnechonskoye (VC) is a field of a complex geology. It is acknowledged to be unique not only by the shareholders, TNK-BP and Rosneft, but also by the statutory authorities. The oil-bearing formations have areas of various productivity and there are sections with salt deposition.

Reservoir uncertainty is very high; a well may be very much unlike its neighbors.

Practice shows that while drilling in such complex environment half of a well bore may go outside the net pay.

Geosteering significantly improves drilling efficiency in the high reservoir uncertainty thanks to timely adjustment of the designed well trajectory. Geosteering equipment consists of two logging devices installed next to a bit and transmitting data to the surface. They measure resistivity, density and porosity and other geophysical parameters of the rock and thus identify the reservoir heterogeneity and assess productivity of the section drilled. If drilling is outside the net pay then a real-time decision can be made as to changing the well trajectory and going into a better reservoir.

Therefore, geosteering helps increase the length of the bore in the net pay, thus improving initial flow rates, reducing well construction payback period and improving the project’s overall economics.

Currently, there are six wells drilled in VC field using geosteering: well 1174 was drilled in 2008 and the other five wells - in 2009. Specialists say that geosteering increases the effective length of a wellbore and initial flow rates by 10 percent to 15 percent on average as compared to drilling 'blindly'. At the same time, analysis shows that this technology in good reservoirs is inefficient, while in reservoirs with high uncertainty it proves useful. One of the commissioned wells was drilled in good reservoir and had an insignificant flow rate increase, a little more than 8 percent, while a risky well had an increase of almost 40 percent.
posted by The Rogtec Team @ 14:51 


Anonymous Noah said...

Outstanding blog full of relevant details and real world applications of VDD, HDD, Directional Boring, Etc.

Kudos to you all!

3 April 2010 17:23  

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