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Issue 143 April 2011 ISSN 1449-8545
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#143
Contents 4 2011 Conferences & Courses 5

Coal Seam Gas
The Influence Of Coal Seam Discontinuities On Wellbore Stability And Productivity Overview Of CSG In Australia
Front cover: TSMarines DP2 DSV REM Etive on site preparing to undertake subsea work in waters off northern Australia.
12 Industry News
Two Is Better Than One WAs Onshore Industry In A Bind
14 View From The Top

ExxonMobil Chairman Shares His Thoughts
16 Young Professionals
A Young Professional Active In The Industry
18 APOGCE Abstracts 24 Company News

Drilling Engineer To Plug PTTEPs Tarnished Reputation
2009 Swagelok Company
In addition to tube ttings, we also make valves, regulators, lters, and happier customers.
Contrary to what you may think, were much more than a tube tting company. And we have our obsession with Customer Focus to thank for that. Yes, were known throughout the world for our tube ttings. And yes, weve been at it for over 60 years. But when companies are looking harder than ever for greater value, its our broad range of products, including orbital welders, modular systems, and a complete line of hose, that helps us offer more than you expect. See for yourself at swagelok.com/moreproducts.
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Council: Australia/NZ/PNG Tony Lake, Chairman Tel: +61 8 8338 2833 E-mail: Tony.Lake@beachenergy.com.au Copyright: SPE News (Issue No. 143) is published under the authority of the Western Australian Section of the Society of Petroleum Engineers. Reproduction of material in whole or part requires the customary acknowledgements. Disclaimer All expressions of opinion in SPE News are published on the basis that they are not to be regarded as expressing official views of the Society of Petroleum Engineers unless expressly stated. The Society accepts no responsibility for the accuracy of any of the opinions or information contained in this publication and readers should rely upon their own enquiries in making any decisions touching upon their own interests. Deadlines: SPE News is published 10 times a year. The deadline for submission of all editorial material to the Editor is the first week of the month prior to issue, i.e. first week of February for March edition. SPE News is published monthly except November/ December and January/February which are combined editions.
2011 Conferences & Courses
APRIL
19-22
Carbon Capture & Sequestration Brisbane, Australia www.spe.org
SEPTEMBER
19-21
SPE Digital Energy Conference and Exhibition Texas, USA www.spe.org
11-13
International Conference on Health, Safety and Environment in Oil and Gas Exploration and Production (12HSE) Perth, Australia www.spe.org
JULY
MAY
1-5
International Conference of Women Engineers and Scientists Conference Adelaide, Australia http://www.icwes15.org/
2-5
Offshore Technology Conference Houston, Texas www.spe.org
OCTOBER
3-5
Subsea Conference and Exhibition Malaysia http://www.subseaasia.org/
SEPTEMBER
8-13
Economic and Sustainability Challenges in the Future Development of Sour Gas Bali, Indonesia www.spe.org
20-22
Asia Pacic Oil and Gas Conference and Exhibition Jakarta, Indonesia www.spe.org
22-24
Asia Pacic Oil and Gas Conference and Exhibition Perth, Australia www.spe.org
JUNE FEBRUARY 2012
1-3
Asian Oil, Gas & Petrochemical Engineering Exhibition Malaysia http://www.oilandgas-asia.com/welcome.asp
26-29
ASEG Conference and Exhibition Brisbane, Australia www.aseg2012.com.au
SPE NEWS April 2011
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Coal Seam Gas
The Inuence Of Coal Seam Discontinuities On Wellbore Stability And Productivity

Daniel Moos, Baker Hughes International (Daniel.moos@bakerhughes.com)
Summary Coal seam discontinuities present both a problem and an opportunity for Coal Seam Gas (CSG) exploitation. In drilling, multiple cleats sets and bed-boundary discontinuities promote instability, and increasing mud weight can exacerbate their effect. On the other hand, near-well transmissivity can be increased by appropriately exploiting these same weak planes, and the most productive regions of many plays are those that are the most heavily fractured. Introduction Considerable quantities of gas are stored within coal seams worldwide, adsorbed onto fracture surfaces and within the matrix. Coal matrix permeability is quite low, and so production primarily occurs by drainage through preexisting fractures (cleats). Well productivity is higher where cleats are densely spaced, and the most productive wells tend to be those that are oriented so as to maximise cleat/ well intersections. Furthermore, the success of cavity completions (see Mavor and Logan, 1994; Palmer et al. 1996) appears greater where cleats are more closely spaced and weaker. This has led to a focus on locating and exploiting the most intensely fractured zones within a given coal seam, and drilling wells based on the orientations of the primary (face) and secondary (butt) cleat sets. However, this can be problematic as closely spaced cleats can cause severe problems while drilling due to disaggregation of the coal along their surfaces. The most productive wells are therefore likely to be the most difcult wells to drill. While the above assertions are generally accepted (Laubach et al., 1998), there have been few quantitative analyses of the effects of cleats on coal properties, and thence on the impact of various drilling, completion, and production strategies. This paper presents a geomechanical approach to understand and predict how cleats affect coal properties, and how to exploit that understanding to minimise problems and maximise production.
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(a)
(b)
Master Cleat Coal Bed
Primary Cleat
Noncoal Interbed
Spacing 0 Face Aperture
Secondary Cleat 2 in Tertiary Cleat
5 cm 0 Approximate
Fig.1. Diagrammatic views, from the top (left) and the side (right) of cleats in coal (Laubach et al., 1998), illustrating the relationships between bedding, face, and butt cleats.
Taking A Geomechanical Approach Geomechanics, broadly speaking, is the study of the forces that act in the earth, their causes, and their effects. While the geological structures we see today are largely a consequence of past geomechanical effects, oileld operations are affected by the forces that act on those inherited structures. Utilising geomechanics to predict the response of the earth to oileld operations requires knowing both the magnitudes and orientations of the in-situ stresses, which act in three mutually perpendicular directions, and the structural geometry and rock properties, including bedding, fault, and fracture orientations. Cleats in coals occur as two mutually perpendicular sets of opening-mode fractures, both of which are perpendicular to bedding (Figure 1, after Laubach et al., 1998). Face cleats tend to be continuous and are formed rst; butt cleats form subsequently and terminate on face
Coal Matrix UCS Friction Stress Pore Pressure Mud Weight 10 MPa 13 MPa 20 MPa 0.6 Cleats 2 MPa 0.5 SV
cleats. These three mutually perpendicular planes are considerably weaker than the intact coal in which they occur (TerraTek, 1996). Wellbore Stability The process of drilling a well causes a stress concentration in which the stresses previously supported by the rock removed by drilling are re-distributed around the wellbore (see Zoback, 2010). This stress redistribution extends only a short distance away from the well, but it results in a four times amplication of the far-eld stress difference at the wall of the hole. If the rock is sufciently strong or the mud pressure provides adequate support, the well will stay open. If the rock is weak, failure of the rock occurs at the wall of the hole. If the rock is strong but contains weak discontinuities, those discontinuities may fail leading to formation of a damaged zone around the well, and, if the failed surfaces intersect, causing cavings and hole enlargement.
SHmax Shmin aziSH
23 MPa
18 MPa
14 MPa
90
Table.1. Properties used in the example analyses of the behaviour of coals presented in this paper. April 2011 SPE NEWS 5
Coal Seam Gas

cleats can fail, and the likelihood and severity of failure is a function of the orientation of the well and the orientation of the cleats with respect to the stress orientations (Figure 2b, 2c, 2d). These and all of the other examples in this paper are for a normal faulting state of stress typical, for example, of the San Juan Basin in the western United States, in which both horizontal stresses are less than the vertical stress Sv and the intermediate stress SHmax is approximately the average of Shmin the minimum horizontal stress and Sv. Deviated wells drilled into cleated rock are the most likely to experience problems, and problems may be more or less severe depending on the drilling direction and the orientations of the cleats with respect to the horizontal stress orientations. Furthermore, there is for many highly deviated wells the possibility that more than one cleat set can fail at the same time. For example, if both of the cleat sets illustrated in Figures 2b and 2d are present, failure can occur on both at the same time in wells drilled to the ENE or WSW, leading to formation of blocky cavings. If cleats begin to fail, which can occur if the nearwellbore stress exceeds their strength, invasion of the drilling mud could occur, which would then lead to further growth of the failed zones. Figure 3 shows in a series of cross-sections of a well drilled towards Shmin the effect of uid invasion into the cleats for the same scenario as in Figure 2d, ie. cleats striking 150 to the minimum stress. While the zones of failure get deeper with time, they dont get appreciably wider. This amount of failure surrounding the well can be problematic unless good hole cleaning practices are observed. One solution to decrease the amount of failure is to raise the mud weight. Figure 4 compares failure immediately after drilling with a higher mud weight to the failure developed after a few hours. Almost no failure is predicted immediately after drilling, as shown on the left. If the drilling mud is allowed to penetrate into the cleats, as shown on the right, the failed zone will grow and after a few hours is virtually identical to the failure zone for the case shown in Figure 3, for which the overbalanced is smaller. Thus it makes little sense to adjust mud weight unless steps are also taken to prevent uid penetration into the cleats. Under circumstances such as these it is worth investigating using under-balanced drilling. This has multiple benets, including increasing drilling rate, eliminating mud invasion and the accompanying near-well permeability damage, minimising the effects of surge and swab, and enabling testing while drilling to identify gas-producing zones.
Failure Width, degree
Fig.2. Stereographic plots of the width of the failed zone around a well drilled at 1 km depth as a function of wellbore orientation for various scenarios (see Table I for a list of the parameters used in this analysis). In (a), cleats are absent. In (b), cleats strike 60 to the minimum stress, ie. N60E. In (c), cleats are perpendicular to the minimum stress. In (d), cleats strike 150 to the minimum stress, ie. N150E. The colour varies according to the amount of failure, from no failure (blue) to 180 (red), ie. half the wells circumference. Vertical wells plot in the centre of each gure; horizontal wells plot along the edges. Wells deviated towards SHmax plot to the left or right; wells deviated towards Shmin plot towards the top or bottom.
Fig.3. The growth of zones within which weak cleats oriented oblique to a horizontal well drilled towards the minimum horizontal stress can fail. From left to right is shown the zone of failure immediately after drilling, one minute after drilling, and 100 minutes after drilling. While the failed zones get deeper for this set of conditions they dont get appreciably wider, and failure stabilises within a few hours.
The presence of three mutually orthogonal weak planes in coal could, if more than one plane fails, cause signicant problems while drilling.
Modelling (Figure 2) reveals that for typical coals there is little likelihood of failure of the intact rock for wells drilled at a moderate depth of approximately 1 km (Figure 2a). However, weak
SPE NEWS April 2011
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Coal Seam Gas
Figure 5 shows that a well that is drilled 1 PPG under-balanced develops a larger failure zone immediately after drilling than the over-balancedd well shown in Figure 3, but as near-well pore pressure drains into the well the failure zone is actually reduced and the well becomes more stable. This offers the opportunity for signicantly increased working time with decreased risk if the initial instability can be managed. Taking Advantage Of Cleats To Enhance Production (Shear Stimulation And Cavity Completion) While instability, due to failure of cleats, can lead to severe drilling problems it can be advantageous once wells are put into production as failure and slip can lead to enhanced cleat permeability due to offset and self-propping of rough cleat surfaces. The extent to which this persists depends on the properties of the coal. Once gas begins to desorb from the coal the resulting shrinkage (eg. Terratek, 1996) could cause a decrease in the effective normal stress holding cleats closed, maintaining or even enhancing opening and perhaps leading to further shear slip or triggering slip on previously stable cleat surfaces. Coal shrinkage is, in this regard, similar to the effect during stimulation of shale gas wells of elevated uid pressure in the zone surrounding the primary hydrofrac, which enhances the permeability of natural fractures within that zone. The same stimulation approach can be used in coals, but the same caveats apply. Cleats must be sufciently weak, and must be misaligned with regard to the principal stress orientations sufciently that the shear stress resolved on their surfaces is fairly large. If so, injection of uid at pressure can lower the effective normal stress sufciently to trigger slip. Shear-Enhanced Cleat Permeability Under natural conditions cleat permeability is low, although not as low as matrix permeability. Hydraulic fracture stimulation can enhance cleat permeability, but maintaining that enhanced permeability requires some form of proppant. It is not clear how far proppant can be carried by injection away from a stimulated well, nor is it clear that sufcient proppant turns the corner away from the main hydrofrac to explain the sustained enhanced productivity that results from stimulation. An additional cause of the enhanced permeability due to stimulation that occurs away from the primary hydrofrac may be that increasing the uid pressure in the cleat system causes shear
Fig.6. Mohr-Coulomb sliding model that can be used to predict the pressure required to trigger slip on a fracture or cleat. Triggering slip requires overcoming the cleats intrinsic strength. So plus the increased strength due to the effective normal stress holding it closed (Sn-Pp). Raising the internal uid pressure decreases the effective normal stress increasing the likelihood of slip. Fig.4. By comparison to Figure 3, an increase in mud weight signicantly reduces the instantaneous zone of failure, developed around the well (as shown on the left). However, after a few hours (as shown on the right) mud invasion results in failure that is almost as severe as predicted for the lower mud weight. This reveals the need not only to adjust mud weight to manage the immediate risk of wellbore instability, but also to minimise invasion of the mud into near-wellbore cleats.
Fig.5. By comparison to Figures 3 and 4, that although the initial zone of failure around a well drilled with a 1 Ppg under-balance is greater than for an over-balanced well (as shown on the left), an under-balanced well quickly stabilises (as shown on the right).
slip due to the inability of the pressurised cleats to support shear tractions applied to their surfaces by the in-situ stress eld. That slip causes misalignment of rough cleat surfaces creating
additional permeability. To achieve sufcient shear stimulation it must be possible to cause shear slip at pressures that are lower than the fracture extension pressure, and it is not always
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April 2011 SPE NEWS
Coal Seam Gas
clear which would occur rst. A more invasive stimulation uid eg. gas might be preferred in cases where shear stimulation is likely, whereas in cases where cleats are difcult to stimulate the focus should be on creating and propping hydrofracs. The conditions for slip on a cleat plane can be computed using a simple Mohr-Coulomb failure analysis (see Figure 6), for which the slip condition is that the shear stress must be larger than the cleat strength which is the sum of its cohesion So plus the effective normal stress Sn-Pp times the coefcient of sliding friction . Using this model, it is possible to predict the conditions for which shear slip can occur (a linear Mohr-Coulomb model has been used to explain the enhanced permeability achieved by slick-water stimulation in shale reservoirs and in enhanced geothermal systems). Figure 7 shows the effect of stimulation on the relative productivity of a well as a function of wellbore orientation for a situation in which cleats are 60 and 150 to the principal horizontal stresses, as in previous gures. This example assumes that the more common face cleats strike NE-SW, and the less common butt cleats strike NW-SE. Each is within a few degrees of vertical and there is a small variation in their orientations. The black dots on the stereographic projections are the poles to these cleat planes. The lefthand gure shows the relative productivity of wells achieved by stimulating the cleats using a stimulation pressure equal to the least stress. This is identical to the productivity of wells under natural conditions, as the cleats are too strong to be stimulated under these conditions. In this scenario wells should be oriented horizontally and drilled towards the NW or SE, as there is
a signicant improvement in the production from these wells compared to wells with other orientations. Note that this is not the worst direction to maintain stability during drilling (see Figure 2), as instabilities associated with the butt cleats which strike N150E are less severe than those associated with the more ubiquitous but also more stable face cleats which strike N60E. Given their strength, these cleats could not be stimulated without exceeding the least stress which would lead to hydraulic fracture extension. If the cohesion were lower (half as large in this example) ie. if the cleats were weaker, the centre gure shows that stimulation at a pressure equal to the least principal stress can signicantly enhance well productivity due to stimulation of the face cleats (stimulated cleats are plotted in white), but sufciently high pressure to stimulate the butt cleats could probably not be sustained in the rock surrounding a primary hydrofrac at a pressure below the fracture extension pressure. In such a circumstance the best method to enhance productivity is to drill in the direction of the minimum stress and create a series of transverse fractures, relying on the increased conductivity of the face cleats which cross the hydrofracs to provide access to economic quantities of gas from the surrounding rock. The right-hand diagram in gure 7 shows the effect of stimulation on the weaker cleats if the maximum horizontal stress is greater than the vertical stress. The face cleats can be stimulated in this situation at a pressure which is signicantly below the frac pressure. This situation is conducive to stimulation without hydro-fracing. Keeping stimulation pressure below the least stress virtually eliminates the possibility of uncontrolled fracture growth. This offers
the opportunity to generate production while minimising the risk of water inux in situations where there is a risk of fracing into adjacent aquifers. In such a case an open or slotted liner completion would maximise productivity by maximising access of the well to the cleat system. During production, both horizontal stresses will decrease due to coal shrinkage as gas is desorbed, leading to natural enhancement of cleat productivity over time. If only one set of cleats has been stimulated, the stress decrease will be different for the two principal stresses due to the likely larger pressure drop along the more conductive set. This could cause an increase in shear stress possibly resulting in slip-enhanced permeability later in the productive life of the well, or could offer an opportunity to re-stimulate wells to take advantage of the changed stress state. Cavity Completions Cavity completion is often used to enhance the productivity of CSG wells. While the general explanation for the increased productivity is that drawing down the well causes plastic deformation leading to growth of an enhanced permeability zone (eg. Palmer et al., 1996), this explanation does not provide guidance on process design nor does it explain the mechanism by which the enhanced productivity is achieved. One possibility is that cavity completions cause enhanced permeability by causing cleats to fail in the near-wellbore region. This is supported by Laubach and Tremains (1991) observation that cavity completions in the San Juan Basin are most successful where two well-developed cleat sets overlap and interfere. Ramurthy (1999) further states that of ve different parameters studied the minimum
Fig.7. Stereographic projections in false colour of the normalised productivity of wells drilled in any orientation into a cleated coal. If cleats are strong, as shown on the left, stimulation at a pressure equal to the minimum stress does not change cleat permeability stimulation in this case has not increased well productivity. The gure in the centre shows the effect on well productivity of the same stimulation pressure on weaker cleats signicant increases in productivity are predicted for well-oriented wells. The plot on the right shows the effect of stimulation at a lower pressure on weaker cleats if SHmax is greater than Sv, ie. a strike-slip stress state.
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Coal Seam Gas
and the orientation of the cleats with regards to the in-situ stresses. Cavity completions rely on intersecting networks of cleats to maximise near-wellbore permeability, and in some cases it is also possible to maximise permeability within the reservior away from the well through shear stimulation. In other cases, however, connection to economic quantities of the gas in place requires creating and propping open new hydraulic fractures. However, even in this latter case it is worth considering the opportunity to re-enter older wells and attempt to stimulate the cleats surrounding older hydrofracs. References Laubach, S.E., Tremain, C.M., and Ayers, W.B.Jr. (1991). Coal fracture studies: Guides for coalbed methane exploration and development. Journal of Coal Quality, v.10, pp. 8188.
Fig.8. The effect on stability of a set of three weak orthogonal planes (two cleat sets and bedding, for example) of two different approaches to cavity completions. The upper series of plots shows the amount of failure by pressure drop alone; the lower set shows the amount of failure caused by injection and then removal of the injection pressure. Similar results are achieved.
Laubach, S.E., Marrett, R.A., Olson, J.E., and Scott, A.R. (1998). Characteristics and origins of coal cleat: A review. International Journal of Coal Geology, v. 35, pp. 175207. Mavor, M.J., and Logan, T.L. (1994). Recent advances in coal gas-well open-hole well completion technology. Journal of Petroleum Technology, v 46, 587593. Palmer, I., Khodaverian, M., Vaziri, H., and Wang, X. (1996). Mechanics of openhole cavity completions in coalbed methane wells. In: Aubertin, M., Hassani, F., Mitri, H. Eds., Proc. 2nd North American Rock Mechanics Symposium, Balkema, Rotterdam, pp. 10891096. Ramurthy, M., Rogers, R.E., and Weida, D. Analysis of the Success of Cavity Completions in the Fairway Zone of the San Juan Basin, SPE 55603. Presented at the SPE Rocky Mountain Regional Meeting, Gillette, Wyoming, 1518 May 1999. TerraTek. (1996). GRI-95/0432 Project Final Report. Wold, M.B., Davidson, S.C.B. Wu, S.K. Choi, and Koenig, R.A. Cavity completion for coalbed methane stimulation an integrated investigation and trial in the Bowen Basin, Queensland, SPE 30733. Presented at the SPE Annual Technical Conference and Exhibition, Dallas, 22-25 Oct, 1995. Zoback, M.D. (2010). Reservoir Geomechanics, ISBN-9780521146197, Cambridge University Press.
April 2011 SPE NEWS 9
in-situ stress is the most important in predicting the success of cavity completions. Wold et al. (1995) earlier demonstrated using a numerical model that anisotropic stresses enhance the damage caused during cavity completion. Their work also highlights the fact that the cavity completion process is risky as the wellbore can collapse if the rock surrounding the well completely disaggregates. Thus the success of cavity completions is a balancing act between insufcient enhancement and total loss of nearwellbore rock strength. The same analysis as was used to assess the stability of wells drilled through cleated rock can also be used to assess the extent to which cavity completions are likely to be successful, as long as we recognise that a major difference between these processes is the rate of onset of under-balanced. An advantage of utilising a simple analysis is that it enables us to investigate whether processes other than rapid pressure drop may achieve a similar result. As illustration, Figure 8 shows two plots of the amount of cleat failure surrounding a well drilled through identical rock. In the rst, a xed under-balanced is achieved virtually instantaneously. In the second, the same amount of over-balanced is rst applied to raise near-wellbore pressure and then rapidly released, to achieve a virtually identical result. The analysis in Figure 8 shows, from left to right in each series, the zones surrounding this
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well in which all three planes fail (on the right), in which at least two fail (in the centre) and in which any one plane fails (on the left). At least one plane will fail completely surrounding both wells, whereas in both cases the zones where all three planes fail are more localised. While the drawdown only case is likely to be more stable, this analysis could be utilised to study the effect of varying the amount of over-balanced or the length of time during which over-balanced is maintained. An advantage of using release of over-balanced for near-wellbore cleat stimulation is that it may be easier to carry out the process in a controlled manner, compared to using under balance. Summary Cleats form the most efcient permeable pathways to provide access to CSG, but their presence has both positive and negative consequences. The foregoing discussion demonstrates that while cleats pose a risk during drilling, this risk can be reduced through appropriate mud weight adjustments and by reducing drilling uid losses into weak planes. It also reveals that under-balanced drilling may be an option in situations where the coal matrix is sufciently strong to support the stress concentration without over-balanced. Once the well is completed, the optimal stimulation method depends on the strength
Coal Seam Gas
Overview Of CSG In Australia

By Wal Muir, MBA Petroleum Consultants (An AWT Group Company) Introduction For this latest article in the continuing series about Coal Seam Gas (CSG) in Australia, we will turn our attention to the poor second cousin of the oil and gas industry, NSW. Although a powerhouse of the Australian economy, and the most populous state in the country, NSW has never really made it in terms of oil and gas. No discoveries of great note have been made (when compared to the other states), although they are a great user of gas through pipelines coming from the Cooper Basin (SA and Qld) and the Gippsland Basin (Vic). This could be on the cusp of signicant change as NSW continues with exploration and appraisal drilling of mainly CSG wells, with a smattering of conventional drilling too. There are six main companies who are operating this work in three basins in the state. The companies are AGL, Dart, Eastern Star Gas, Metgasco, Planet Gas and Santos, and the basins in which they work are the Clarence-Moreton, Gunnedah and Sydney (Figure 1). There are other companies working in these and other basins in NSW but in this article I will concentrate on the ones listed above. The coals in the ClarenceMoreton Basin are Jurassic and Triassic in age while in the Sydney and Gunnedah basins, Permian coals are the target. The Gloucester Basin is also Permian aged. Reserves And Resources As can be readily seen from Table 1, NSW is beginning to build quite a gas bank. These numbers are those reported ofcially by the companies and therefore available publicly.
Fig.1. NSW permits
Company AGL* Dart** Eastern Star*** Metgasco* Planet Santos* TOTALS 1P NR NR 115.0 2.7 NR NR 117.7 2P 1062.0 NR 11520.0 397.0 NR 739.0 3718 3P 1301.0 NR 2797.0 2239.0 NR NR 6337 2C Resources NR 1400.0 3515.0 1177.0 NR NR 6092 GIP NR 3300.0 NR NR NR NR 3300
Table 1. Reserves and Resources, NSW Only (Pj) 10 SPE NEWS April 2011
*At 31Dec10 **Feb11 ***Dec09 NR=Not Reported www.spe.org
Coal Seam Gas
Companies
AGL Energy AGL has three main projects in NSW. They are the Camden, Hunter and Gloucester gas projects. The Camden project (Figure 2) has been producing and delivering gas into the Sydney market for a number of years. AGL is the largest marketer of gas in Sydney. 2P reserves, at the end of last year, were in excess of 150 Pj, and work was continuing to extend the eld and increase production. In 2009, the latest gures available, more than 130 wells were producing gas into a low-pressure gathering system before entering the Rosalind Gas Plant and onto market. The Hunter and Gloucester gas projects are in the appraisal and development stages but arent producing gas yet. Signicant reserves are attributed to these projects (Table 1) and further drilling of both pilots and exploration wells, as well as seismic data acquisition, are envisaged. Dart Energy Dart acquired Apollo Gas in late 2010 to give them a solid foothold in the Sydney and Gunnedah Basin CSG province (Figure 1). Although there isnt any production from the Dart permits to date, they have an aggressive campaign of drilling to assist in unlocking the gas assets expected to be present. In 2011, Dart expects to drill 10 exploration wells across six of the seven permits it holds in NSW. 2D seismic was acquired in late 2010 and the results are currently being incorporated into their mapping. Pilot drilling is planned for both PEL 456 and 458 (Fullerton Cove) in Q2, 2011. Eastern Star Gas Eastern Star Gas (ESG) has most of its six permits in the Gunnedah Basin, of which three are operated by Santos. Over the years they have grown from a small conventional explorer and producer, at Wilga Park and Coonarah, to a signicant player in the fortunes of CSG development in NSW and elsewhere. With 2P reserves in excess of 1500 Pj, with signicant growth potential, ESG has signed an agreement with Hitachi to study the feasibility of building an LNG plant at Newcastle to take the gas. Current plans call for rst gas in 2015. This will require a new pipeline from Narrabri to bring the gas down into Newcastle.
Fig 2. AGLs Camden Gas Project.
Metgasco Metgasco has been exploring in the ClarenceMoreton Basin in northeast NSW (Figure 1) since their oat in December 2004. Since then, a signicant amount of seismic data and wells have been drilled. Appraisal programs of pilot wells has allowed the booking of reserves (see Table 1). These include a number of potentially productive elds in the Walloon Coal play in the basin. The development paths which Metgasco are moving down include: Local gas market with possible sales of up to 2 Pj per year; Gas supply to southeast Qld through a proposed Lions Way Pipeline (Figure 1) where there is a market size of up to 95 Pj/year; Richmond Valley Power Station 30 MW, using up to 2.5 Pj/year for which development approval has been received; Northern Rivers Power Station 200 MW which is being studied; and LNG developments, both small and large which depend on the volumes proved. Planet Gas Planet is a relative newcomer to CSG in NSW. It is earning interests by operating in three permits currently held by Leichhardt Resources. These are PELs 468, 469 and 470. The licenses
are prospective for CSG. Target seams will be the Illawarra Coal Measure (or equivalent) and the Shoalhaven Groups in the Sydney Basin tenements. Target seams in the Gunnedah Basin (adjacent to the ESG CSG gas development project) will be the Maules Creek coals. Planet has an aggressive campaign of both new seismic and drilling of up to four wells planned for 2011. Santos Santos holds three permits in the Gunnedah Basin, and operates and is farming into three of the ESG permits. Santos also owns 20.97% of ESG. Exploration drilling has commenced and successful pilots have been drilled. The exploration program for 2011 calls for at least one new corehole in each of PELs 1, 433 and 462. Conclusion This brief overview demonstrates that although NSW seems unlikely to produce the CSG volumes which Ql has on offer, it is relatively early in the exploration cycle for NSW by comparison, and the coals in NSW appear thick and gassy. This will be an interesting play to watch as it develops, with its access to large markets (Sydney, Newcastle, gas red power stations etc) and the possibility of LNG as well. The next overview will discuss the issues which CSG has with the stakeholders in both NSW and Qld such as water, fraccing, land access and others.
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April 2011 SPE NEWS
11
Industry News
Two Is Better Than One
TSMarines DP2 DSV REM Etive on site preparing to undertake subsea work in waters off northern Australia.
TSMarine and SMIT Subsea Australia (SMIT) have entered into an agreement in which SMIT will provide TSMarine with diving services. Under the agreement SMIT (a wholly owned subsidiary of Boskalis) will install a state-ofthe-art S4 12-man saturation dive system on the TSMarines multi-purpose offshore vessel REM Etive, equipped with onboard work class ROVs and a 140 t crane. The SMIT dive system will be installed on the mezzanine deck, providing the vessel with more than 500 m of clear back deck space, making it well-suited to subsea construction, inspection maintenance and repair operations for oil and gas projects. The subsea system, which includes a hyperbaric rescue chamber and an onshore hyperbaric reception facility, is capable of working to depths of 300 m.
The SMIT S4 saturation dive system will be installed on TSMarines offshore support vessel REM Etive.
12 SPE NEWS April 2011
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Industry News
WAs Onshore Industry In A Bind

Western Australias onshore oil and gas industry is facing rig availability issues and may be destined for a crisis if companies and government cant work together to address the problem. Currently WA only has one deep capacity drilling rig, the Weatherford 826, but the state has commitments for 92 wells over the next three years which would keep four rigs busy. The WA Department of Mines and Petroleum (DMP) has been working with oil and gas companies to determine what the companies need, when they need it, and when theyll be able to fund their programs so the department can go to service providers and broker a deal for a rig. DMP Director of Petroleum and Environment Bill Tinapple said there are a lot of rigs being built and packaged up with modern equipment that could be modied to comply with Australian standards and mobilised here, but its a matter of nding a common ground between the companies on when and what type of rig is needed. With the Weatherford 826 being contracted to QGC for its Queensland drilling commitments at the end of 2011, the WA sector is nervous about what will happen to its multi-billion dollar industry. After recent talks the department and about seven companies agreed on contracting a rig to be mobilised here by the end of the year or early 2012. Tinapple said the target now is to get one or two rigs here as soon as possible. Weve got two different packages, ones more of a light, mobile rig and the other a deeper, but more difcult rig to move, he said. We would like to have both types of rigs but we dont know what were going to be offered from the contractors. They may have a rig that can drill very deep thats still mobile.
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Working hard on the Weatherford 826 rig. Image courtesy of Latent Petroleum.
The department is looking for rig contractors worldwide and has already had some interest from almost a dozen companies from the US, Canada and Australia. Tinapple said the Australian regulations for onshore rigs are a factor that needs to be taken into account when selecting a rig contractor because it is an added cost that has to be paid. It will take $4 or $5 MM to get a rig here, and 12 months of contracts, he said. The service providers wont mobilise a rig without having some contracts to back them up. The department is waiting on operators to raise capital by having big production successes, Tinapple said. The only really substantial success the state has had over the past year is at Empires Oil and Gas Red Gully-1. But Tinapple said that if the state gets successes from shale gas wells,
like Latents Warro-4 which will be drilled in May, then it will really encourage companies to raise the capital they need to advance the departments initiative of bringing at least one rig to WA by the end of 2011. In the worst case scenario where companies and the department cant reach an agreement on a rig contract, Tinapple said that individual companies (or clubs) may have to bring in equipment themselves. However, the most likely impact is that companies will claim force majeure and apply for deferrals of work commitments, he said. DMP would have to appraise these on their individual merits but could cancel titles for non-performance. But the department doesnt believe the industry will have to go into crisis mode and is adamant that WA will have an onshore drilling rig mobilised here before next year as planned.
View From The Top
ExxonMobil Chairman Shares His Thoughts

Over in the west, we are a 25% foundation partner in the iconic Gorgon Project which is developing the Greater Gorgon gas elds located 130 km off the WA coast. This is a fast-moving project, construction began on Barrow Island just over a year ago and much work has already been done on preparing the site for the LNG plant, building accommodation, and getting ready for drilling. Already some $10 B has been committed to Australian companies across the country and the total spend arising from the Gorgon Project is expected to reach $20 B during the ve year construction period. Also in WA, we are a joint venture partner with BHP Billiton in the Scarborough project. We are currently in the concept select stage of development. What does the companys future look like? The company here in Australia has a very strong future. Our operations in Bass Strait have been producing for over 40 years and theres signicant oil and gas resources still to be produced in the Gippsland Basin. In 2001 we commissioned the largest 3D survey ever recorded in Bass Strait. We threw a 3,900 km seismic blanket over our northern oil and gas elds, which brought a massive ow of information into our dataset, and resulted in a series of successful eld drilling programs. Were still taking full advantage of this data and will continue to do so to nd further resources. As Ive also just mentioned, we are currently involved in some of the largest oil and gas projects in Australia and these all have a long-term outlook these are resources that will continue to produce for the next several decades in some cases. What is the most important technological advancement you have seen/experienced in your career? Where to start! This industry is renowned for innovation and introducing new technologies to meet ever-increasing challenges. Drilling technology advances just keep extending the viable depths and distances that can be reached, as well as cutting the time involved. Wells longer than 11 km are not exactly routine
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ExxonMobil Australia Chairman John Dashwood at his Melbourne based ofce takes some time out of his busy schedule to speak with SPE.
What does your position entail as chairman on a day-to-day basis? ExxonMobil is a large company, and we operate in many countries around the world. Globally, we have a functional structure. In Australia, my primary responsibility is managing our production business, providing oversight of these operations our Bass Strait oil and gas elds which have been producing for over 40 years to ensure it is operating effectively and efciently. I also have the role of chairman of all the ExxonMobil businesses in Australia. In this position I make sure the company is effectively represented to all our external and internal stakeholders, including government, business leaders and our employees. I also ensure that all the parts of our business including exploration, development, production, rening and supply are working coherently to meet our business goals. All these businesses must adhere to standards and procedures so that the company is successfully managed. How did you become chairman and what do you hope to achieve in this role? I was working in London as the UK-Netherlands Joint Interest Manager for ExxonMobil International Limited and when I was asked to take on this role I couldnt refuse. At that time Id
been out of Australia for eight of the 10 previous years so I considered it a great opportunity to come home and be with family. This is where I started my career with ExxonMobil so its nice to be back in the country where Ive spent two-thirds of my working life. We have a very strong business here in Australia, so when I took on the role of Chairman, my main goal was to maintain this, but also look for ways to grow the business further. I want to be able to take advantage of all the opportunities placed in front of the company and utilise all the companys technical, financial and commercial capabilities. What projects is the company involved with and how are they going? The Kipper Tuna Turrum project is currently being developed in Bass Strait and we have made significant progress. This year is a big year for the project most of the offshore equipment is already fabricated and will be installed in 2011. This project involves the development of both subsea equipment and a new platform, Marlin B, which will be linked by a bridge to the existing Marlin A platform. This project will develop cleaner-burning natural gas supplies to help secure Victorias energy future, and holds enough energy to power a city of a million people for 35 years.
View From The Top
but they are viable today. I can imagine 40 years from now, someone looking back and saying: 11 km? We did that easily. But perhaps the most signicant change has been the deployment of computing and communication capabilities enabling advances in geoscience, engineering and commercial applications. And that means that we can now process information faster and more accurately. Im always astounded by the possibilities of science and how people put ideas into practice. What makes the company successful? Weve been operating in Australia for over 100 years were the countrys oldest petroleum company, operating since 1895 through both our upstream and downstream businesses. But whats made us so successful for over a century? Our experience and that comes down to the people who work for us. We have some of the most experienced oil and gas engineers in Australia and, indeed, in the world. Our people are constantly selected for ExxonMobil assignments all around the world because of their talent. And then they return to Australia to share that experience and what theyve learned, which ensures that we are constantly using best practices and employing the latest technologies. We also hire the best engineers through our graduate recruitment programs, and these young people bring with them fresh ideas and enthusiasm to the job they do. Where did your interest in engineering come from? Ive always been interested and fascinated by mathematics it was one of my best subjects at school so it was a natural progression for me to start a Bachelor of Engineering after nishing high school. It wasnt until the third year of my degree that I actually realised electrical engineering had a practical application to humanity and how we live. I recall realising this after Id made a digital clock as part of an assignment. The outcomes of engineering enhance peoples lifestyles and solve problems. It creates things that we use each day and take for granted whether thats a piece of furniture, a bridge or the gas that comes out of your stove to cook your dinner each night.
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During university, I took a vacation job with an oil and gas services company in the jungles of Kalimantan in Indonesia. It was there that I got really interested in oil and gas and realised the sheer scale of the industry and the impact that energy has on the lives of people every day. As an engineer, I found that incredibly stimulating, and later pursued a career in the area. What has been the challenging aspects of this industry? As a company, we always take a long-term view. And our recently published Outlook for Energy shows that global demand for energy is expected to increase by about 35% by 2030, as compared to 2005. This signicant, long-term increase in global energy needs is perhaps the most important reality our industry faces. Its not a matter of whether we meet this demand using oil, gas, coal, wind or solar to fuel the world, we need them all. One of the real challenges associated with this is how we can meet this demand in economic, efcient and environmentally responsible ways. As we in the industry already know, this is no easy task, and will require a combination of enormous nancial capital, technological ingenuity, engineering skills and management expertise. What are the trends in the industry? Five years ago in Australia unconventional gas projects were talked about a lot but nothing had been developed. Last year alone three or four unconventional projects took FID, including the worlds rst CSG-to-LNG project. For an industry thats primarily been Victoria and WA-based, were now seeing many projects up the eastern coast, with more planned. This means there are gas projects in communities which typically have had no history or experience of these, so a lot of community consultation and education will be required. And vice versa, industry needs to learn about the issues facing the communities in which we operate. Within ExxonMobil we announced the acquisition of XTO in the United States in late 2009, which will enhance our position in the development of unconventional natural gas and oil resources. The other trend that springs to mind is the ever-increasing speed of the introduction of new technologies. Over the years weve seen so many
innovations, and I couldnt even begin to predict what will come next. One of the exciting research projects that ExxonMobil is working on is developing biofuels from algae. With our joint venture partner Synthetic Genomics Inc were exploring whether algae can be a viable source of renewable fuels. Who would have thought this was possible 20 or 30 years ago? Its so exciting to think what kinds of technology well be creating and using in another decade. What are your career highlights and your proudest moment? Ive had many highlights and most of them revolve around the sense of achievement that you feel when somethings completed, whether thats a negotiation of an agreement between several parties or reaching a milestone in a project. Ive also learned a lot over the years and have always found ways to use that knowledge to improve future projects. By far my proudest moment would be being present at the birth of my two daughters, and watching them grow up and turn into young, independent women. I learn a lot from them every day. Children have a way of opening your mind and removing boundaries that can constrain novel approaches to issues. What advice would you give to graduates? Keep an open mind, in every sense: culturally, in terms of the career paths available, when dealing with people. Dont set boundaries as to whats achievable because youll only limit yourself there is so much that can be achieved through engineering, providing energy to the world and the application of your personal efforts. What do you enjoy doing outside of work and how important is it to have a work/life balance? Spending time with my family is always my number one choice and as a family we do a lot of activities together. I also enjoy (trying to!) keep t. Leisure time is important it keeps my health and sanity! I always make an effort to keep weekends as free as possible to spend time with my family. And I always take my annual leave taking time off work for a breather is so important to recharge the batteries.
Young Professionals
Maria on holiday in Greece.
Extended periods of time away from home, sharing a room with workmates and working in exceptionally hot environments may not sound too appealing to the average 25-year-old woman. However, for Maria Ward, a LWD engineer for Halliburton, its all a part of the job, and the fact that she gets to travel the world denitely makes a career in the oil and gas industry more appealing. Ward has gained extensive industry experience while seeing the world in her short career, which
she worked hard to achieve throughout her ve-year engineering and commerce degree at the University of Western Australia (UWA). She was determined to get involved in the industry and associate herself with various organisations, where she organised events, attended meetings and networked with industry professionals. I was involved in SPE, but lately I havent been able to go to any events as Im always away, Ward said. SPE is a benecial organisation to join
for a petroleum engineer. I was the SPE Student Committees events coordinator, then secretary for about three years and we hosted some great events. UWA has a Young Engineers group, and I was on that for a couple of years as well. I was also the UWA representative for Young Engineers WA. Being involved in such organisations and committees not only helped Ward pursue a career in the industry but, she said, it was fun as well. One of the benets of being on the committees
Okanagan Valley in British Columbia. 16 SPE NEWS April 2011
Monastries on top of big rocks in Meteora, Greece. www.spe.org
Young Professionals
is that you get to run the events and industry professionals get to know who you are, Ward said. When we were organising events, usually we would go to the oil and gas companies, but often companies would approach us to come and arrange to talk to the students. In her fourth year of university she studied abroad in Norway. In that same year she fed her travel bug by backpacking through Europe and travelling through Central America. Norway exposed Ward to a completely different way of looking at the industry and applying the best solutions for situations that companies in the industry can often face. She said the experience was incredible and she continues to run into young professionals she met four-and-a-half years ago on the other side of the world. Since graduating as a petroleum engineer, Ward has worked for Halliburton in her current role. She wanted guaranteed field experience and felt working for a services company like Halliburton gave her the opportunities within the industry that she had worked so hard for.
Ward said the UWA course was very broad in the rst year and branched out into more niched disciplines in the following years to allow diversity in students future engineering careers. So once you get out in the workforce youre not really pigeon-holed, she said. There are other petroleum engineering specialities that Ward said shes attracted to, and she feels that if she wanted to move into another role she has the knowledge to do so. Ward believes the opportunities for young engineers are extensive and, after having such a well-rounded degree, she can chase the job thats best suited to her and right now, thats as a LWD engineer for Halliburton. As a petroleum engineer, youre trained to analyse whats under the ground, but you often dont get sent to the rig, she said. Some do, but some dont. Theres a lot of competition for that and I wanted to make sure I got eld experience. I thought it would be weird trying to design something and never really seeing how it works. Its not for everyone, Ward said, because not everyone likes sharing a room and being away from family. Having to y-in/y-out for work doesnt bother Ward either. Her current role also
allows her to escape winter and globe-trot for about four weeks each year. Last year she went backpacking with friends through Greece and Turkey. While working for Halliburton Ward has gone to Singapore for training, and worked on elds in Canada, Korea and Australia. Working in Korea was a once-off one-month project. Everyone was from other districts because they dont often drill in Korea, she said. It was quite isolated and there were only 10 ex-pats working there: we had no phone or internet in our unit. Ward said shes generally been lucky with the eld locations shes been sent to, and this year shell be heading to Houston for more training. However, she expects this year she wont be escaping the drizzly Perth winter to go on any holidays because shes just bought her rst house, something her career has allowed her to do at a young age. For someone who used to want to be an architect, owning her own home is very exciting for her. Opportunities are endless for Ward in the oil and gas industry with the experience she is gaining in her current position. When asked where shell be in the next ve years, Ward said she nds it exciting not knowing what the future will bring.
Houses in fairy chimneys and caves in cliffs at Cappadocia in Turkey. www.spe.org April 2011 SPE NEWS 17
APOGCE Abstracts
X Field Development Matures

A. Al-Harrasi, Y. Rathore, J. Kumar, K. Bhatti, M. Al-Salhi and H. Al-Subhi from Petroleum Development Oman. X eld located in the west central Oman is in a mature stage of development from the Permian Gharif formation reservoirs. These stacked reservoirs have been historically produced commingled since 1984 with natural depletion until 1998. Since then the eld is under waterood. Produced water is mainly re-injected and gas is used for gas lift and the rest is liqueed and exported. The need for effective pressure maintenance was recognised only when the eld pressure depleted under primary development and GOR increased. The FDP proposes peripheral injection in the northwest due to better sand connectivity and pattern injection in areas of low sand connectivity. The articial lift mechanisms are mixed of ESP and gas lifted wells. Waterood management is highly challenging in this complex and heterogeneous reservoir. Water front conformance causes challenges with impact on vertical and horizontal efciencies. The sands that are not supported by water injection cause wax and scale deposition in the producers. The eld separation facilities are constrained by gas handling design capacity. Future challenges are expected as well and ow line integrity issue due to the age of the eld. Despite all challenges, the waterood is actively supporting production in most areas. Surveillance is the key to managing this complex waterood. Additional drilling is used for further development with well and reservoir management practices to
X eld map.
target by-passed oil, improve waterood efciency and increase oil production. The surface and subsurface integrated system optimisation is helping stabilise the system, and delivering improved oil production and gas export with ongoing implementation of new articial lift strategy. This paper documents a case history of waterood management in X eld and the challenges that have to be overcome.
This is an abstract of paper SPE 145663-PP to be presented at 2011 SPE Asia Pacific Oil and Gas Conference and Exhibition. Copyright 2011 Society of Petroleum Engineers. The material doesnt necessarily reflect any position of the Society of Petroleum Engineers, its officers, or members. Any unauthorised use, dissemination of the information, electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited.
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APOGCE Abstracts
Malaysian Assets
Ron Cramer, Shell Global Solutions; Martijn Hooimeijer, Shell India Markets Pte. Ltd.; Michael James Dolan, Shell Oil Co.; and Derek Gobel, Sarawak Shell Bhd. Shell has designed and implemented a suite of real-time software applications that are currently operational in 60% of global production, known as FieldWare. The purpose of this paper is to describe Shells experience with FieldWare real-time optimisation and surveillance of oil and gas wells/reservoirs offshore Malaysia for which the following benefits have been confirmed: Increased availability of gas/condensate asset by 30% due to improved liquid loading management - equivalent to incremental 60 MMscf/d gas and 1200 bbl/d condensate. Increased efficiency of staff, with benefits quantified at US$500,000. Additional benets include better understanding of real-time well/reservoir behaviour, more accurate allocation, improved instrument accuracy, stabilised production and reduced HSE exposure. The net effect is fast and cost-effective implementation as the application uses, for the most part, existing field instrumentation and SCADA/Historian systems. The value/cost ratio is in excess of a factor of 40. The paper will also describe future plans inclusive of site-wide optimisation for oil, and optimisation of gas and condensate production with CO 2 and water handling constraints.
Development Of New Sand Consolidation Fluid And Field Application In Shallow Gas Reservoirs
Vladimir Chaloupka and Rio Descapria,Total EP Indonesie; David Coulon, Total; Michael James Fuller, Schlumberger WTA Malaysia S/B; Ricardo Andres Gomez, Chevron Corp.; Joel Gill, Cesar Roberto Guimaraes De Carvalho and Ardestya Ferta Abdurachman, Schlumberger Extensive laboratory testing was conducted to qualify a new internally catalysed consolidation system. The tests were conducted using both sand packs and core samples, to measure post treatment compressive strengths, regained permeabilities, rheological properties and working time of the uid. The results of the tests will be presented as well as uid eld trials performed in shallow gas reservoirs in Tunu giant gas eld located in the Mahakam river delta in the province of East Kalimantan, Indonesia. Applications The development of the uid and its eld application were driven by the search for an effective alternative to conventional primary sand control methods that would allow developing marginal reserves where the conventional methods might not be economical. Results, Observations And Conclusions Signicance Of Subject Matter Unconsolidated sand packs treated with the new consolidation fluid led to high compressive strengths and regained permeabilities. The tests performed on Tunu core samples showed similar improvements in UCS and regained permeability. This was despite the fact that these formations can have very undesirable properties for sand consolidation as per common industry belief with high shale content up to 25% and d50 of formation being as low as 30 microns. Two treatments The new consolidation uid was successfully qualied through a series of core ooding tests and eld tests. As apposed to the comparable products currently available on the market the uid has low ammability rating, signicantly improving the safety aspects of the treatment. The treatment using this new consolidation system showed that it can provide a viable primary sand control option for developing marginal gas reserves. were successfully performed on shallow unconsolidated layers using coil tubing. The reservoirs produced sand free up to 2.8 MMscf/d and 4.0 MMscf/d.
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April 2011 SPE NEWS
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APOGCE Abstracts
Ensuring Well Integrity In Deep Water Using A Fit For Purpose Advanced Cement System
Salim Taoutaou, SPE; Cinto Azwar, Rakesh Pathak, SPE, Schlumberger; Prakash Ajwani, ONGC Deep water is one of the most technically and logistically challenging environments for cementing operations because of the risks associated with the conductor and surface casing cementing. Understanding these technical challenges, such as waiting on cement time, is critical to keeping costs down and mitigating the geological risks such as low temperature at seabed and fracture gradient, as well as shallow ow hazards such as shallow water ow and gas hydrates are key to designing cement slurries that can meet deep water specications and provide required zonal isolation. This paper will discuss the real challenges faced during the cementation of critical surface casing for a major operator in India. The maximum operating water depth was 2965 m. Shallow gas ow, was encountered during the drilling of top hole sections. A low seabed temperature of 2C was also encountered in all the wells, and the narrow margin between the pore pressure and fracture gradient necessitated the requirement of lightweight cement slurry of 11.5 ppg. All of these challenges were resolved by using an innovative cement system based on Optimised Particle Size Distribution (OPSD), combined with a proprietary low temperature gas migration control additive, used for the rst time in India. Cementing Deepwater Challenges Low Temperatures Water depth has a direct effect on the temperature at the seabed. In the cold temperatures of the deep water environment, cement takes longer to set and achieve the required compressive strength. Consequently, the waiting on cement time is longer. Low Fracture Gradient OPSD Cement Systems To avoid the risk of inducing losses due to the narrow margin between the pore pressure and the fracture gradient in the unconsolidated formations below the seabed, a low-density cement system is required to ensure cement coverage across the zones of interest. Shallow Flow Hazards The next biggest challenge is the high potential for shallow gas hydrates. Failure to control these problems can lead to serious consequences such as well control risks, excessive hole washouts, and destabilisation of near-wellbore formations. Evaluation Of Cement Solution To mitigate the above mentioned hazards, the slurry must have the following features: The zonal isolation was achieved using the OPSD system and a proper gas migration control additive system. OPSD cementing slurries offer rapid cement setting and control of potential gas ows, and ensures long term zonal isolation. The cement system isolates a formation and develops compressive strength faster than conventional Portland cement systems. The above system is combined with proprietary gas migration technology; it will allow the control shallow gas ow. Gas migration technology provides low uid loss and low permeability when coupled with the particle size distribution technology of OPSD cement, thereby inhibiting migration of uids. Light weight with a density of 1.37 SG with high strength; Early compressive strength development; Slurry must be gas tight; Low transition time; Cement system with least heat of hydration during the curing Zero shrinkage; and Slurry that can withstand 6500 psi bottom hole pressure.
Gas Lift Injection

A. Maijoni and A. Hamouda, University of Stavanger Gas lift injection increases oil rate in production tubing. Gas lift injection causes production instability, hence volume variation to the topside equipments and transportation in pipelines. Although factors affecting the instability have been investigated in literature, little attention has been paid to the effect of gas/liquid properties. The associated increase of the liquid flow rate has shown discrepancies in the trend obtained by transient (dynamic) and steady state simulations for a continuous gas injection regime. A suggested mechanism is addressed in the paper for correct liquid rate with gas lift.
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APOGCE Abstracts
Advanced Spectrometry And NMR Based Porosity Partitioning Integrated Technique In Evaluating Cretaceous Pinda Formation, Offshore Angola
Claire Jacob, Dhruba J Dutta, Jim Grau, Prince Abangwu, Mirza Hassan Baig, Prodip Saikia Schlumberger; Celia C. Santos, Kilamba Diogo Contreiras Sonangol P&P
Characterisation of complex Cretaceous reservoirs of offshore Angola, West Africa, poses similar uncertainties of evaluating carbonates as in other parts of the world. The formation is a mixture of clastics, with carbonates at varying fraction that changes with depositional environment. With horizons of complete carbonates with the main fraction of dolomite and anhydrite, it becomes a real challenge for any petrophysicist engaged in evaluation of these oil bearing formations. The primary evaluation problem becomes even more complicated with porosity related issues since the primary oil reservoirs in general fall in the
carbonate sections with moderate porosity, and with varying secondary porosity like vugs and occurrences of fractures at different intervals. There is often a significant difference in permeability between testing results and those estimated from formation evaluation results or computed from formation tester data. These observations have also been verified with core results. A need for integrated evaluation could therefore be easily established, with proper matrix evaluation to generate a better estimation of intergranular porosity and a complementary method for accurate estimation of secondary porosity from vugs, and then
incorporating the results to generate a more realistic permeability. Apart from evaluation challenges with conventional logs, the drilling mud system and acquisition generates some environment affect on the acquired data which impedes its efcient use. Photoelectric factor is an important measurement in complex lithology, but its accuracy is very sensitive to mud systems and to borehole rugosity. The measured photoelectric factor is often not sufciently accurate for proper evaluations. New generation elemental logging devices are extremely benecial in Continued on page 22
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April 2011 SPE NEWS
21
APOGCE Abstracts
Quantication Of Drill String Integrity Failure Risk Using Real-Time Vibration Measurements
Y. I. Arevalo and A. Fernandes, SPE, Schlumberger Vibration measurements have traditionally targeted the improvement of downhole tool reliability. This paper discusses the effects of vibration on the complete drill string. Failures associated with drill string vibration continue to happen in spite of the sophistication of todays measurements. These failures represent a very signicant amount of lost time which we look to improve. The industry has a limited knowledge database or tools for managing and quantifying the risk of vibration to the complete drill string. Operators are then faced with an unknown quantication of the risk severity when attempting to mitigate vibration. By quantifying the risk, this work demonstrates how the prevention of incidents can be achieved. These incidents include, but are not limited to, twist-offs, back-offs and BHA component failures. The proposed solution is based on real-time measurements of drill string vibration to sensors to discriminate between different types of vibration. This was critical to estimate realistic cumulative damage to the drill string, which is highly dependent on the type of vibration suffered by the assembly and the onset of vibration modes coupling. This paper shows that approximately 80% of drill string integrity failures analysed can be identified and prevented using the proposed risk quantification solution. This result has been obtained despite the fact that fatigue or wear of drill string components prior to run is unknown and vibration sensors were located at a single position in the drill string. This indicates that the primary contributor to drill string failures are the current drilling conditions. This paper describes how this solution has been used to evaluate and quantify real-time risks and presents the validation through field application ultimately reducing the risk of catastrophic drill string failures.
Two runs which have a very similar apparent behaviour when looking at their drill string vibration logs. When the integrity failure risk is quantied, an indication of the higher risk scenario is clear and the safer way to proceed can be selected.
estimate an ongoing drill string integrity risk which is used as a guideline to improve decisions while drilling the well. This solution has been developed using advanced vibration
Continued from page 21 providing accurate elemental concentrations. The method of estimation of carbonates based on elemental yields has evolved signicantly, and in recent years magnesium can be separated out of the concentrations to provide a major input for estimating dolomitic fraction out of total carbonate in the formation. The remaining issue of porosity partitioning has been developed since 1995 with the incorporation of Nuclear Magnetic Resonance (NMR) data. For carbonates, the porosity systems were assumed in a completely different way to accommodate the larger vugular fraction in the evaluation schemes. This new approach has been generated based on the knowledge and experience acquired in evaluating carbonates throughout the world. Therefore the approach in estimating permeability takes advantage of the computation of vugular pore fraction from the NMR. The current method shows remarkable accuracy while correlating with other answers from testing and core results. Secondary porosity from resistivity imaging provides a separate data set to complement NMR results and to provide confidence in subsequent evaluation when a good match is achieved. Improvement of the results depends on the acquisition and the uncertainty could be reduced by proper planning. The acquisition for the current case was forced to a limit since the drilling was carried out with very saline mud. Although environmentally challenging, a proper approach in cancelling the effect of borehole chlorine generated very reasonable data. Integrating all data and information with a proper workow, the uncertainties in evaluation were reduced considerably.
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APOGCE Abstracts
History Matching And Permeability Increases Of Mature Coal Bed Methane Wells In San Juan Basin
Ian Palmer, Higgs-Palmer Technologies; Robert Lloyd Moore and Debbie Fay Loftin, BP America Description This paper present detailed well history matches, from the San Juan Basin, of Coal Bed Methane (CBM) gas rates, water rates, and pressures. In the sweet spot (fairway) the matching includes permeability that increases exponentially with depletion, consistent with independent well tests spaced over time. The permeability increases are well matched by the Palmer-Mansoori (P-M) model with cleat porosities of 0.1-0.2%, which are consistent with observed water rates. North of the fairway, permeability increases are similar and infer similarly low cleat porosities, but some water rates are too high and not consistent. Results And Conclusions The P-M model provides an extra constraint on the cleat porosity. This paper presents statistics of permeability matched to field results by the P-M model, both in and north of the fairway. First, the permeability increases to zero reservoir pressure are predicted to range from 22-63. Second, large permeability increases are not consistent with large cleat porosities. Third, the average matrix shrinkage parameter is somewhat higher than recent lab measurements. Fourth, cleat-volume compressibility mostly increases with depletion when matrix shrinkage becomes dominant and cleats open wider. Signicance At low reservoir pressures (<400 psi), the exponential permeability increase attens. This is interpreted as coal failure due to stress changes caused by matrix shrinkage. The P-M model for stress changes can predict the onset of shear failure with depletion, which generally agrees with the attening observed. This adds validation to the applicability of the P-M model in CBM plays. The modelling is important to better forecast gas rates in mature CBM wells. Where CBM wells have relatively high water rates, and standard history matching leads to cleat porosities greater than 0.2%, there is probably water inux to the coal from a source outside the coal.
Best Practices And Lessons Learned In The Construction And Maintenance Of A Complex Gas Asset Integrated Production Model (IPM)
Chidi Amudo, Martyn Clough and Ramzy Sawiris, Chevron Australia Pty. Ltd; Joshua Paul Beinke, Chevron Corp.; Daniel Ian OReilly, University of Adelaide
The Petroleum Experts Integrated Production Model (IPM) software suite is widely used in the E&P industry, especially for project evaluations that require integration of both surface and subsurface models. There is evidence in literature to show diverse applications in eld development planning, integrated forecasting, surveillance and production system optimisation. Perhaps less reported are the lessons learned and best practices in using the IPM software. This paper focuses on these issues using Chevrons IPM model of a non-operated producing gas asset as an example. The NOJV Sub-surface Team began developing an IPM model for a gas asset located offshore northwest Australia in 2005. With explicit modelling
of critical components like compressors, dozens of wells and reservoir tanks, platforms, uid characterisation, gas-water contact movement, pipelines, sub-sea manifolds and separators, this is arguably the largest and most complex IPM model in Chevron. The model continues to play a critical role in Chevrons effective capital stewardship of the gas asset. The need to maintain the credibility of this model cannot be over-emphasised, and the model has undergone several phases of enhancement to ensure that it continues to meet business objectives. This paper describes some of the best practices and lessons learned in constructing and maintaining a complex IPM model. It is intended as a resource for IPM practitioners. Examples
cover all aspects of the IPM from the nontechnical (eg. framing the problem, case denition and naming convention) to the technical (eg. model construction, model maintenance, software limitations, constraint violations, production optimisation and quality assurance checks).
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April 2011 SPE NEWS
23
Company News
Drilling Engineer To Plug PTTEPs Tarnished Reputation

Ken Fitzpatrick, who began his career in 1979 as a drilling engineer with Esso Australia Ltd in Victoria, has been appointed as Chief Executive Ofcer of PTTEP Australasia (PTTEPAA). The recently troubled company has been getting publicity for all the wrong reasons, but it is hoped Fitzpatrick, who comes onboard in May, will improve their tarnished reputation. He is currently Senior Vice President Assurance and Controls at Woodside, with responsibility for the assurance and controls teams across a range of projects including Pluto, Browse and Sunrise. In the six years he has worked at Woodside he has also held the positions of Senior Vice President Drilling/Subsea and General Manager Operations. As Woodside General Manager Operations, he was accountable for safe, clean oil production from the Cossack, Laminaria, Corallina, Legendre, Eneld and Chinguettie elds. Earlier this year the Federal Government gave PTTEP permission to continue operating the Montara oil eld following the independent review, The Review of PTTEP Australias Response to The Montara Blowout, which
New Chief Executive Ofcer Ken Fitzpatrick will start with PTTEP in May.
assessed the companys Montara Action Plan as well as technical and governance issues. In 2009 almost 2 MM gallons of oil was spilled from PTTEPs Montara rig operations in 2009. The company is now under strict government regulations for the next 18 months. Anon Sirisaengtaksin, President and CEO of Thailand-based parent company PTTEP, said Fitzpatrick will provide new leadership in the companys Australian operations where his initial objective will be to oversee the effective continuing implementation of the Action Plan. He will bring a strong track record of handson technical experience and management excellence to the Australian operations, Anon said. His career has featured a commitment to safety training, team building and environmental management programs, plus bringing new development projects into production safely, on time and on budget. In 1996, while General Manager at Ampolex Australia, the company received the APPEA Safety Award for a safe working environment in recognition of the companys safety performance. Currently, he is a member of the APPEA Montara/Macondo Task Force Steering Committee and has previously served as WA State Chairman of APPEA.
An observer watches the re-boarding operation from the support vessel Nor Captain in November 2009. Courtesy of PTTEP Pictures. 24 SPE NEWS April 2011 www.spe.org
From concept to final product

TAMs metal-to-metal seal cementing Port Collar is proven technology that enables overall casing integrity throughout the life of the well. It features a full casing ID, and no cement drill-out is required. The M-T-M seal cementing Port Collar is built to meet or exceed the requirements of complementary equipment in hostile environment wells. To date, there have been over 100 successful installations in sizes 4-1/2 through 13-5/8. Product integrity, quality design, and service/support backed by over 40 years of experience. Thats value you can count on! www.tamintl.com
Total commitment why trust anyone else?
Integrated Project Management

Schlumberger IPM (Integrated Project Management) understands that when you outsource a project, you entrust its performance and your safety reputation to someone else. That responsibility is why IPM has developed industry-leading management systems and quality, health, safety, and environment assurance processes. The basis of our systematic, interactive project performance is the Integrated Project Management System. Our unique Quality Management System ensures the quality of our processes and technology and the competency and commitment of our people. This proven workflow, combined with worldclass knowledge and data management, provides unparalleled results. Our integrated systems are optimizing performance and safeguarding reputations in 5 languages across 20 countries, 35 projects, and more than 180 rigs and they continue to evolve as we meet new challenges.
E-mail ipminfo@slb.com for more information. www.slb.com/ipm

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SPE NEWS

Australia, New Zealand and PNG Sections

Justin Vinson, Engineering Manager

of completion technology is taking shape quite nicely.

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Contents 4 2011 Conferences & Courses 5

14 View From The Top

18 APOGCE Abstracts 24 Company News

2009 Swagelok Company

IFC 1 18 OBC 3 IBC 21

2011 Conferences & Courses

JUNE FEBRUARY 2012

SPE NEWS April 2011

Coal Seam Gas

The Inuence Of Coal Seam Discontinuities On Wellbore Stability And Productivity

Master Cleat Coal Bed

Spacing 0 Face Aperture

Secondary Cleat 2 in Tertiary Cleat

Coal Seam Gas

Failure Width, degree

Failure Width, degree

Failure Width, degree

Failure Width, degree

SPE NEWS April 2011

Coal Seam Gas

April 2011 SPE NEWS

Coal Seam Gas

SPE NEWS April 2011

Coal Seam Gas

Coal Seam Gas

Overview Of CSG In Australia

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Coal Seam Gas

April 2011 SPE NEWS

Two Is Better Than One

12 SPE NEWS April 2011

WAs Onshore Industry In A Bind

View From The Top

ExxonMobil Chairman Shares His Thoughts

View From The Top

Maria on holiday in Greece.

Okanagan Valley in British Columbia. 16 SPE NEWS April 2011

Monastries on top of big rocks in Meteora, Greece. www.spe.org

X Field Development Matures

18 SPE NEWS April 2011

April 2011 SPE NEWS

Gas Lift Injection

20 SPE NEWS April 2011

April 2011 SPE NEWS

22 SPE NEWS April 2011

April 2011 SPE NEWS

Drilling Engineer To Plug PTTEPs Tarnished Reputation

From concept to final product

Total commitment why trust anyone else?

Integrated Project Management

E-mail ipminfo@slb.com for more information. www.slb.com/ipm

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