The Wisdom of Maturity

7 April 2009 (Last Updated April 7th, 2009 18:30)

Global demand for energy is rising regardless of environmental concerns or the price of oil. Cost-effective production is the holy grail for the oil and gas industry, and many companies are looking to extend the life of existing production facilities and get the most out of their mature wells, says BP America vice-president Ed Heiberger.

The Wisdom of Maturity

Volatility in oil and gas markets makes it hard for the industry to cost projects against future prices. At a time when new exploration and development projects are increasingly focused on more remote or challenging fields, this makes cost control a critical issue.

These factors, along with continuing growth in global energy demand, have thrown the spotlight on existing production infrastructure and how it might be adapted to exploit wells that are mature but far from depleted.

"Fields are considered 'depleted' when only 50% of oil has been removed.

Extending the life of existing assets and getting more from reserves that are already developed is an area of significant investment among big oil and gas producers but they face many technological challenges to make such projects pay off.

"The revitalisation of infrastructure is a very urgent item on the agenda, especially among the big international players in the energy market," says Ed Heiberger, vice-president of BP America. "The oil and gas industry has done a very good job of getting production from deeper, more remote areas, and when oil prices are more than $100 a barrel it has the confidence to do that. Now that oil prices are lower the industry is focusing on getting more out of existing fields."

Mature wells hold great promise, not only because they are well understood at a practical level, but also because the reserves they hold could make a big difference to global energy supply.

"Even the best fields become 'depleted' when only 50% of the reserve has come out. There is a lot of potential in mature wells and they need to be part of the industry's long-term strategy," he adds.

Heiberger recently chaired a forum on technology in mature fields for the Society of Petroleum Engineers (SPE), during which he saw evidence that the industry has a strong appetite for the development of new systems to enable mature fields to produce more efficiently. He also realises, however, that there are many technical challenges to address.

Great attention has been paid to the need for project management methods, facilities and equipment development to help the industry reach deepwater and unconventional oil and gas reserves, often in hostile environments, but Heiberger is keen to ensure that the industry looks closely at how these ideas could benefit mature wells.

For now no stone must be left unturned in the search for technological solutions. "The SPE has put in a lot of effort on this issue and is trying to look forward. Discussions about what the industry needs to do are always flowing and dynamic, including some very practical ideas and off-the-wall thinking. There is no big product to emerge from these discussions, but there are a lot of good ideas that can be internalised," remarks Heiberger.

Taking on the technical challenge

Recent advances in technology will help the industry get more from its mature wells. The US Department of Energy has backed new models of hydraulic pump that help to prolong the life of assets and make production in offshore and mature oil fields more cost effective.

"There is a lot of potential in mature wells and they need to be part of the industry's long-term strategy."

One of the key factors that defines how effective such technologies are in mature fields is their ability to improve the water cut in these wells. Many mature fields produce far more water than others relative to the amount of oil produced.

Electric submersible pumps in these applications produce an emulsion of oil and water that must undergo a costly separation process. Hydraulic pumps produce a mixture that is easier to separate and therefore less expensive to process.

Despite such progress, however, there is much more to be done. As oil and gas fields mature the water cut tends to increase, but there are also problems with reduced pressure and the quality of the oil and gas produced. In many cases, mature wells need a more efficient alternative to the artificial lift system with which they were initially equipped.

SPE discussions have covered many areas, including primary separation and secondary processing, equipment innovation, emissions, project management, power generation, instrumentation, well testing and technology for surface facilities. For many reasons, deliquefying mature wells is a priority.

Liquid loading happens in gas wells as their production declines, as water enters the well bore as connate fluids or condenses from the gas stream. The additional fluids that result from declining pressure and temperature can result in more back pressure that could result in formation damage.

Liquid loading is also a problem for oil wells.

The key targets are to analyse well behaviour to ensure that liquid loading is detected, and to understand the sources of the water that enters the flow. It is also vital to understand the critical velocity to remove liquids.

According to Heiberger: "The US has drained all its easy oil and many of its gas fields. Less productive wells can face huge problems if there is water present, so deliquefying is a big concern. The main challenge is to match the demand for deliquefying with a cost-effective solution."

"There is a lot of concern about environmental issues such as water discharge and greenhouse gases, and mature wells need more energy as we must work harder to get more out."

For now, he believes that there is a need to keep the search for solutions as wide as possible so as not to miss valuable opportunities, and he sees many key targets emerging from the SPE discussions.

"The subsurface people are looking at how to get a lower viscosity for oil. At BP, the focus is very much on the facilities side.

There is a lot of concern about environmental issues, such as water discharge and greenhouse gases, and mature wells need more energy as we must work harder to get more out. People are also talking about heavy oil and tar sands, but they need a high oil price to be economically viable and we must look at how we could lower facility costs," notes Heiberger.

The scope of technological innovation must be broad as there are many problems to tackle. A high priority is the need to keep track of the ownership of volumes and to improve the metering of gas flows.

Flow from older wells is slower, and the owners of the reserves – often state governments – have high accuracy requirements that drive up costs.

At the same time, more people are working on reserve estimation. The industry knows that significant reserves remain in mature wells, and indeed it has developed sophisticated methods for accurately assessing the volume of remaining oil and gas.

The crucial matter, however, is how much of a reserve can be successfully and cost-effectively brought to the surface.

Surveillance is therefore a crucial area of development for older assets. Knowing how a well is flowing is the first step in taking corrective action.

"For now, the important thing is to look at a whole range of technologies. We also need to look at what is being used out there in deepwater applications or in other industries that apply to mature wells, especially in the field of automation," he adds.

He perceives potential benefits from many sources, including the development of systems for space exploration or the evolving applications of nanotechnology. Any ideas that can be adapted from existing systems may prove more cost efficient than developing tools and techniques from scratch.

Eyes on the prize

Heiberger is in no doubt that the industry must make a big effort in order to optimise the capability of mature fields to contribute to global energy supply, but these fields bring certain advantages in terms of technology development.

Many mature fields have existing infrastructure that enables new systems to be tested and evaluated on small sections of the overall facility. "Pilots work very effectively in mature wells," he says.

"We need to look at what is being used out there in deepwater applications and other industries."

Using this approach BP has been able to focus its efforts on improving productivity by examining new techniques for fracturing and horizontal drilling, and it has done so with great success in the past two years. In other areas there is a need to ensure that technology development is evolutionary and that it is evaluated over the long term.

In many cases cost will be the defining factor for new technology, but Heiberger believes that the industry can carve out quick wins that will fuel further investment in systems development.

"There is such a big prize on offer for oil and gas companies – and the whole world – that there will be big steps forward every now and then, but breakthroughs are very expensive to test, so many things must be done incrementally," says Heiberger.

No one doubts the scale of the challenge that lies ahead, nor the many years of effort, investment and innovation required, but willingness in the industry to identify and overcome difficulties looks strong. The potential prize of cost-efficient production from known fields is too great to ignore.

SPE Foundation

The SPE Foundation, composed of former SPE presidents, is dedicated to generating funds to support and augment key society programs, including distinguished lecturers, scholarships, continuing education, technical publications, textbook development and electronic publishing.

"There is such a big prize on offer that there will be big steps forward every now and then."

Established in 1977, the SPE Foundation works to supplement normal funding capabilities for key SPE programs in order to ensure excellence in these programs through a partnership among individuals, industry, and society. More than any other program, SPE.org, the leading knowledge portal for petroleum professionals around the world, delivers on the SPE mission "to collect, disseminate, and exchange technical knowledge".

SPE.org offers members and students a variety of technical, educational and interactive services, made possible in part through ongoing SPE Foundation support. SPE members are also engaged in educating the general public about the oil and natural gas industry – what we do, how we do it, and why it is important to the world economy.