American Oil and Gas Reporter - January 2015 - 109

TECH TRENDS
The answer is through significant improvements in operational
efficiency through the intelligent use of technology to lower total
F&D costs without sacrificing health, safety and the environment.
In addition to the lower price environment, the technical challenges facing the business are getting more complex, and are very
different for each major segment of the exploration, drilling and
production business. The challenges in unconventional plays are
different from those in the conventional deepwater, and ultradeep
high-pressure/high temperature, plays around the world that represent the highest F&D cost profiles. While these segments of the
business may be more vulnerable to price declines, the fact is that
all segments can improve efficiency and lower the cost of operations through better integrating technology.
A detailed discussion of these challenges would require far
more space than is available in this venue, but examples in each
of the high-cost E&P segments will demonstrate how the business might lower its cost of operations and increase efficiency
to maintain profitability in the face of current market conditions.
There is a constant stream of new technology in all high-cost
plays-much of which has been discussed in AOGR's annual Tech
Trends issue in previous years. These include multicomponent
and wide-azimuth 3-D seismic, higher channel counts on 3-D surveys, and new horizontal drilling and completion techniques, etc.
These technologies can make a difference in operations on a
stand-alone basis, but they cannot by themselves effect the kind
of cost savings that will enable operators to survive a prolonged
downturn. The technologies must be integrated with critical
processes such as real-time operations (RTO) monitoring methods, new sensors and continuous monitoring technologies, advanced communications systems, and multidisciplinary workflows
that enable decisions to be made efficiently in real time to reduce
the risk of cost overruns from unexpected events that drive up operation costs, ruin efficiency, and disrupt production processes.
Conventional Reservoirs
In conventional plays, the two highest-risk segments are deepwater and ultradeep HP/HT reservoirs (e.g., the deep Shelf gas
play in the Gulf of Mexico). In deep water, new and more stringent safety requirements also require more sophisticated RTO and
integrated operations management to assure that failures in judgment do not lead to another major offshore safety incident.
All operators-no matter how careful they are-still can be surprised by unexpected subsurface conditions that most commonly result in nonproductive time (NPT), and in the worst case, catastrophic failures.
The single biggest source of cost overruns in deepwater drilling
is NPT from events that either could have been predicted a priori, or could have been recognized through the use of RTO methods and then mitigated before a serious problem developed. Such

events include such things as the onset of very narrow drilling
margins between the pore pressure and fracture gradient, rapid
changes in rock strength caused by pressure and stress fields-which
can result in massive lost returns during drilling-and wellbore stability in high-stress environments such as near salt bodies.
Safe and efficient deepwater drilling requires that predrill analysis and RTO monitoring be integrated into a process safety model that starts long before drilling commences and continues through
the entire drilling and completions exercise. This requires that the
people managing the operations also be integrated into teams that
communicate constantly to assure that all stakeholders have the
critical information required to do their jobs.
These same drilling operations issues apply in conventional
HP/HT wells, but they are exacerbated by the additional complexities caused by the presence of very high temperatures. In these
wells, the materials scientist must play a key role in developing
new materials that can handle both the high temperatures and the
corrosive chemical environments that are a natural byproduct of
the HP/HT world.
In both deepwater and HP/HT operations, there ultimately will
be a need for continuous monitoring of wells and fields using
downhole sensors that can be deployed within casing and production strings so that the operator can monitor the reservoir constantly for anomalous changes that can spell trouble. For HP/HT
reservoirs, these sensors will need to be capable of surviving the
high temperatures and corrosive environments for the life of the
well. Much like the electrocardiogram monitor that watches a sick
patient in a hospital, such RTO systems can be designed to warn
the operator when a critical reservoir parameter goes out of the
acceptable range of values.
By linking these monitoring systems from the field or offshore
platform to an operations monitoring center, the operator will gain
redundancy in operational excellence, and can ensure that experts
at the monitoring center can provide timely input to processes and
actions undertaken at the field location.
Unconventional Reservoirs
For unconventional reservoirs, the challenge to improve operational efficiency must start with the realization that shale development is an extraction business that is more akin to a mining process, in some aspects, than it is to traditional oil and gas
production. With this paradigm in mind, the primary question is
how the extraction operation within the shale reservoir can be made
more efficient and cost effective.
Given the price sensitivity of many shale plays, the goal of this
exercise should be to enable production to increase while lowering the cost per flowing barrel so that capital budgets do not
dry up and force the shale extraction operation to shut down when
prices drop significantly.
JANUARY 2015 109
American Oil and Gas Reporter - January 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2015
