Over the past decade we have seen radical changes in the way we do business. However, for the most part we have been driven by incremental improvements to established products, and continuing along this tortuous path is not the way to do business. We need a burning desire to move forward – a concentrated, single-mindedness that comes from desperation, when one has no alternative but to move on with existing technology. It is then that we become most ingenious at developing new, improved alternatives. Think of the space race and how President Kennedy’s support for it impacted America’s psyche. If you don’t believe the search for reliable, inexpensive energy is just as important today as rocket science was then, you probably don’t belong in our business.

The extended well test on Jack 2 required new technologies, including advances in perforating, well control, and test tree equipment.

History

In the dark ages – that is, before the late 1980s – major operators had well-funded R&D facilities. These facilities were staffed by scientists who worked on long-range research, and by applications specialists, usually advanced-degreed geoscientists and engineers, who specialized in taking ideas from the lab and applying them to the field.

Although not terribly efficient, advances were effective due to the competitive nature of these centers. Corporate structures were typically monolithic, with physical infrastructures that relied on strong, multi-level technical staffs in separate functional departments. Technical specialists resided in separate research departments and were loaned to department in-line professionals to develop new technologies. The in-line workforce and their managers frequently butted heads with the technology specialists, who were inclined to spend monies on new ideas, sometimes without regard to the economic effect.

With the oil price collapse of the late 1980s, most operators put the monkey on the backs of major service companies to develop customized solutions for our problems. The trouble with this path lies in the limited profit motive, adverse risk, and high overhead costs associated with service company ramp-ups for such operations. Additionally, service companies failed to understand operators’ economic hot buttons, and all of industry did dismally in anticipating product price fluctuations. Finally, other stakeholders, namely Wall Street investors, pressed for short-term signs of growth and more efficient operations from operator and service companies. These factors doomed R&D development, at least in a classic sense, for the whole industry. In the past few years there has been a resurgence in R&D at the big operating companies. Once again, all of the majors and national oil companies, as well as many larger independents, are focusing on using technology to improve profitability. Operators have come to realize that we must cut our own path, that the service industry doesn’t have the wherewithal to go it alone, and that we each must pitch in to push new technologies.

This time it will be different

Although we all understand that there is something to be said for competitive advantages, in this market secrets do not stay secrets for long. Many of the technologies now being studied are quite costly to develop, and risky, to boot. As a result, nearly all operating companies are willing to share in the exploration of new and emerging ideas, except for the most closely held and highly rewarding R&D efforts. New risk-reward models are being utilized that are fairer to the involved parties.

We work with university staff members on similar issues in order to take advantage of first-class lab facilities, knowledgeable professors, and highly educated graduate students and research assistants. We hire firms to study specific site problems and develop alternatives. All the while, the major operators work on many of the issues in their own laboratory facilities, using the expertise they retained through the oil bust as well as more recently trained technical experts. The majors also continue to use outside firms for some projects, sometimes to develop them in-house, and other times to develop separate companies to sell their wares to other companies.

None of the above is happening in a vacuum. Each company has its own strategic plan. We learned from past mistakes. This time we should be in it for the long haul. We aim to be efficient in developing technologies, to be direct in our approach, and to share our knowledge when it behooves our companies and the industry. This life-cycle, well-modeling approach is being used to some extent by almost every company. Below are examples of improvements that make a difference.

- Among potential improvements in seismic interpretation are such items as horizon-based, curvature-attribute recognition to identify less pronounced faults and fractures; ocean-bottom-station nodes to improve blind-spot imaging; multi-component seismic monitoring and interpretation; wide-azimuth acquisition methods; time-lapse seismology; and other novel concepts. Another example concerns highly sensitive broadband instrumentation and processing methods that might unlock low-frequency ambient wave oscillations, thus providing spectral signatures to improve resolution and reduce risk. Industry needs more expertise and better systems to image ultra-deep structures and around salt cavities without the benefit of long, expensive, and sometimes impossible-to-obtain offsets.
- In drilling, we must embrace such advances as casing and slimhole drilling; expandable casing; improvements in running systems and hole-cleaning techniques; real-time computer controls; bit vibration analysis tools; just-in-time drilling fluids measurement and control for densities and viscoelasticities; invert-emulsion storage tanks for mud reuse; rotary steerable system improvements; fit-for-purpose bit designs and metallurgies; high-speed data transmission; and more efficient data interpretation and information exchange. Riserless drilling, which has the ability to allow deeper casing setting depths and thus simplified casing designs, shows continued promise for ultradeep water. The riserless mud recovery technology (RMR) method was recently successfully tested. We are still a few tools short; we need the ability to economically drill and set longer, heavier casing strings, as well as downhole tools and drilling fluids capable of surviving in ever-higher temperatures and pressures. It is time to turn drilling from an art form into a full-functioning science.
- Similarly, topsides facilities are not yet able to handle the ultra-high pressures and temperatures expected in future discoveries, especially in large quantities. Developments include new and better performing elastomers for improved flexjoint strength, new pulsation dampener designs to reduce vibration, modularization design improvements to decrease cycle time, multipurpose vessels, and 3-D engineering. In this field we stand ready to marry traditional E&P with gas-to-liquids (GTL), liquefied natural gas (LNG), compressed natural gas (CNG), and other emerging developments, which will result in the petroleum business being transformed into the energy business.

The Tordis Subsea Separation Boosting and Injection system is capable of separating water from the wellstream, and pumping it back into a nearby injection well.

- Subsea improvements include electric components, subsea separation, metering, processing, and/or pumping/compression – all of which could improve recovery factors and reduce topsides facilities weights. Several pilot tests are ongoing, as are service company trials. High integrity pressure protection systems (HIPPS) offer much promise in dealing with ultrahigh-pressured reservoir fluids. Compact modularization is a key feature of all subsea equipment because weight and size are critical. Also of critical need are three companion features: reliability, reparability, and contingencies. However, all three features add cost and complexity. The industry must address these issues head-on and develop a strategy specific to each.
- On the well completion side, tools are incapable of functioning at the next pressure and temperature threshold regime. But many improvements are paving the way toward increasing productivity, including ultra-lightweight proppant and gravel, expandable screens, (fluid-specific) swellable packers and plugs, and single-running completion tools and techniques. Nano-coatings that protect against abrasiveness, corrosivity, chemical incompatibilities, and heat and pressure, as well as those that lubricate moving parts better, are on the horizon.
- In production, intelligent wells continue to provide data to better manage wells and reservoirs. Improvements in remote control sliding sleeves enable companies to complete future horizons initially, thereby removing the necessity for later intervention. In-well seismic monitoring has the potential to revolutionize the sciences by marrying fluid flow and seismic monitoring real time. Oil sands recovery mechanisms, such as steam-assisted gravity drainage (SAGD) and other thermal enhanced oil recovery methods, are becoming more widely understood. Projects are needed to implement new tools and methods.

With regard to infrastructures, the exploration and production industry has come a long way. It recognizes the need for continual technological improvement and acknowledges that there are costs associated with progress on technical fronts. Operating companies admit that too little effort has been spent on furthering developments and improving tools, and they share the blame for the burden of development being placed chiefly on service and supply companies over the past two decades. The entire industry sees the need for coordinated technical development of the tools it needs, and to improve finding and development, reduce direct costs, and improve personnel efficiency, which is in short supply. We also have come to recognize that the education and development of skilled, highly trained minds is not only desirable but necessary in order to successfully compete with one another. As a result, operating companies have begun to take a more active role in technology development, both in the financing of projects and the hiring and training of personnel. They are strategically partnering with one another, with service companies, and with institutions of higher learning to more effectively develop solutions to difficult problems. They are restructuring their staffs so that they can quickly take advantage of captured knowledge and are rewarding personnel who develop improvements. In short, the industry is working both harder and smarter to use technology. Webs of knowledge and learning exist throughout the oil patch. However, despite all of these infrastructure-oriented initiatives, it comes down to the individual mindset.

James Pappas, P.E., is the Global Technology Coordinator for Devon Energy’s Drilling/E&P Services Group in Houston.

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