OFFSHORE DRILLING OVERVIEW

CHALLENGES & SOLUTIONS

Presentation to the

National Commission on the

BP DEEPWATER HORIZON OIL SPILL AND OFFSHORE DRILLING

August 25, 2010

Joe Leimkuhler

Off h W ll D li MOffshore Well Delivery Manager

Shell Upstream Americas

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Deepwater Drilling Rigs & Platforms

Deepwater Platforms –

Drill ships

Semi – Submersibles

Deepwater Platforms

Floating Drilling &

Production Systems

Common Capabilities

Station Keeping – Mooring System or Dynamic Positioning (DP) enables you to safely stay over the well….stay put.

BOP/Riser System – How the rig connects from the surface to the wellhead on the seafloor.

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Wellhead System – Enables the well to safely withstand the pressure and tension from pipe loads.

Rig – Installs the wellhead, manages the riser, drills the hole, installs and cements the casing in place….what you see in the

pictures.

Deepwater Systems – Concept of Size

Semi-Submersibles

Drill Ships

Deepwater Drilling Rigs – Tension Leg Platforms Production/Drilling Systems

Drill Ships

Deepwater Floating Platforms –

Drilling & Production

Challenges Associated with Deepwater Drilling Operations

Station Keeping** - Keeping the rig/platform on location

BOP / Control Systems Timely Response

Riser/Tensioner Systems - Staying Connected to the well

BOP / Control Systems – Timely Response

Well Design – Wellhead & Casing Components

Rig**- Pipe Handling Loads, High Circulating Pressures, Materials & Equipment

ENTIRE SYSTEM MOVES – FLOATS – OPERATES OFFSHORE

** Will Cover if Time Allows

So how do you start drilling a Deep Water well?

1.Set up on location.

• Run Anchors

• Set Seafloor Beacons

2. Install Drive or Jet Pipe.

3. Drill Conductor or Surface Interval

• Install & Cement Surface Casing(s)

4. Run the Riser & BOPs

5. Test BOPs & DRILL AHEAD

• Connect the well to the rig.

Drilling a Deep Water well – Below Surface Casing.

1. Drill to the next Casing Point

• How strong is the rock at my casing shoe?

• Measure by pressure test.

• Determine maximum mud weight rock can hold

Rock Strength = 10.5 PPGDetermine maximum mud weight rock can hold.

• Drill to depth mud pressure will stay > fluid pressure.Max Mud Wgt = 10.0 PPG

2. Remove Drill String & Run Casing

3. Cement Casing in place, Test BOPs & CasingPressure = 9.8 PPG

4. Repeat Drill & Case Process to Well Total Depth (TD)

• Each Hole Size is typically a smaller diameter

Pressure = 11.0 PPG

What stops water, oil or gas from flowing

out of the well while I drill?

Primary Well Control

Mud Pressure > Oil Pressure

Final Product : The Well is Safely Drilled to TD

Depending on how fast Pressure

Increases……or how slow rock strength

increases, it may take numerous casing strings

to reach TD.

36”

22”28”

What started out as a hole 36”

across…..typically ends up ~7” in diameter.

13 5/8”

22”

16”18”

13 5/8”

11 3/4”

9 7/8”

7” – 8 5/8”

GOM Deepwater Drilling Challenges – Risers & BOP Systems

Challenges Industry SolutionsChallenges

Weight / BuoyancyRiser & Drilling Mud

Industry Solutions

• Syntactic Foam Modules for total range of water depths.g

Subsea Access Inspection

• Light weight alloys

• ROV Technology –Full range of operational capability.Inspection

function testing & maint.

O C

Full range of operational capability.

Electro M S stemsBOP ControlsResponse time

• Electro-Mux SystemsFiber Optics – Elec – Hydraulic

2 min or less response time for full disconnect sequence

GOM Deepwater Drilling Challenges – Well Designs

Industry Solutions

High Capability Well Heads & Casing P

Challenges

Narrow Margins between R k St th & Fl id P Programs

Expandable Casing Systems

Rock Strength & Fluid Pressures

Salt & Sub Salt Drilling

Managed Pressure Drilling

Dual Gradient Drilling

Wide Variety of Geologic Environments.

Temperature ChangesNon-Toxic Synthetic Based Drilling Fluids

Real Time Operating Centers

Temperature Changes– Drilling Vs Production

Transition From Drilling to Prod.

Rotary Steerable Drilling Systems

MWD – Measure While Drilling Systems

All of the above require flexibility

MWD – Measure While Drilling Systems

Barriers & ControlsPrevention

BarriersHA

Con

RecoveryControls

Loss of Primary Well Control

Loss of Primary Well Control

Loss of Primary Well Control

Minimize Mitigate

AZARD

seque

• Barriers are designed to stop the “Top Event” For well control they keep the wellbore

Likelihoodg

Consequences nce

Event . For well control they keep the wellbore fluids in place….until you want to produce the oil and gas.• Controls are used to mitigate impact if Outside

Barriersthe “Top Event” occurs (primary well control is lost and the fluids start to flow before production is desired.

• In terms of Primary Well Control BOPs

Barriers

In terms of Primary Well Control BOPs are a Control, not a Barrier.

• Relative to a Blowout top event, BOPs are a barrier to loss of Secondary Well Control.

Best Practice Design your well

Inside Barriers

• Best Practice – Design your well with sufficient barriers to reduce the use of controls.

What “Tools” are common to Deepwater?

Logistics

Boats, Boats, & Boats

Helicopters

Marine Terminals (Ports) Underwater ROV (Remote Operated Vehicle)

Automated Pipe Handling

“Hands Free”

Pick-up, Make-Up &

Racking Systems

State of the Art Drilling

Systemsy

Pressure While Drilling

Full formation Evaluation

While Drilling

Directional Drilling Control

Subsea Intervention Capability ROVs

Real Time Operating CentersReal Time Operating Centers

RTOC – Real Time Operating Centers

24/7 Monitoring of Critical Operations, Real Time Offsite Data Storage, Well Planning

Is all offshore drilling like deepwater? NO

N l PNormal Press

Near Normal Press

High Press

Copyright of Royal Dutch Shell plc CONFIDENTIAL

Very High Press

Offshore Wellplans - Deepwater GOM Vs Alaska

Conventional DW Well PlanConventional DW Well Plan 30”Typical Deepwater GOM Well

36"

26"

36"

26"

20”

20"

16"

20"

16"

13 3/8”

11-3/4"

13-3/8"

11-3/4"

13-3/8"

Shallower WaterSimpler

Typical Offshore Alaska Well

9-5/8"

7"

5-1/2”

9-5/8"

7"

5-1/2”

• Lower Pressure• Greater Margins

Pore Press – Rock Strength

Simpler wellplan

Copyright of Royal Dutch Shell plc CONFIDENTIAL

TD >25,000’TD >25,000’

Regardless of where you operate offshore you need to…Put it all together…… Operator + Drilling Contractor + Well Plan

Well Construction Interface Document

g p g

WCID - API Task Force Proposal

(In Draft)

Well construction interface / Basis of design— Location & environment issues— Geologic and geophysical risks/issues— Well designg— Well barriers (with much detail)— Casing design— Well execution plan (with detail)— Critical Well Risk Assessments

O t ’ M t Of Ch (MOC)

*

— Operator’s Mgmt Of Change (MOC) processDrilling contractor safety case and lease operator Safety Management System Interface— Mgmt structure / Roles & Resp’s / Acct— Drilling Contractor MOCg— Personnel management— Well control procedures— Rig Risk management processes— Emergency response

M i i di i d i

Copyright of Royal Dutch Shell plc CONFIDENTIAL

— Monitoring, auditing and review * API Task Force Document

Deepwater & Offshore Drilling

Starts & Ends with HSE – Health, Safety & Environment HSE is our “License to Operate”

Enabled by Technology & Operational Performance

Sustained by Production

Q&AQ&A

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GOM Deepwater Drilling Challenges – Station Keeping

Deepwater Mooring & Dynamic Positioning Systems

Challenges

Currents –

Industry Solution

Robust Mooring Systems – Up to 12-16 lines, Surface Currents, Loop & Eddy CurrentsDeep Abyssal Currents

suction piles & preset systemsOperating Conditions Criteria Established

Infrastructure Offset, Water Depth, Sea StatesEmergency Disconnect Systems

Storm Conditions

e ge cy sco ec Sys e s

Winter Storms – Suspend OperationsHurricane Evacuation Plans & ProtocolWinter Storms

Hurricanes Hurricane Evacuation Plans & Protocol

Secure Well & Rig – Fully Evacuate

GOM Deepwater Drilling Challenges – Rig Systems

Rig / Platform Challenges

Industry Solutionsg

Hoisting System – High Capability to manage heavy drill string & casing loads.

• Derrick & HoistCapacities

Circulating System - High fluid capacities

Capacities up to 2.5 mln• Automated Pipe Handling Systems

7500 PSI Hi h V l S tg y g pare required for wellbore & riser fluid volumes.

Space / Deck Load – Limited, must be

• 7500 PSI High Volume Systems• Up to 8000 Bbls of fluid storage

• Always monitored, shared resourcep ,monitored in 3 dimensions. Fixed & Variable Loads.

Vessel Stability – Constantly monitored,

y ,with other operations on therig/platform.

ProductionConstruction

ENTIRE SYSTEM MOVES – FLOATS – FUNCTIONS OFFSHORE

Construction

Back-UpBack Up Slides

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Purpose of Presentation

Provide an overview of Deepwater Drilling

Review Basic Offshore Deepwater Drilling Structures &Review Basic Offshore Deepwater Drilling Structures &

the Offshore Deepwater Drilling Process & Well Design

Review Deepwater Challenges & Solutions

Contrast Deepwater with Offshore Alaska

Presentation does not specifically address “Macondo” issues……that will have to wait until investigations are complete.

Tremendous amount of material in a short time period.

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Brief Perspective on Deepwater – Gulf of Mexico

Oil and gas exploration and production at water depths greater than 1 000 ftOil and gas exploration and production at water depths greater than 1,000 ft

Ultra-deep water is defined as water depths greater than 5,000 ft

Growing in importance as more supply is needed to fuel transportation & industry

Global deepwater production capacity has tripled since 2000

Gulf of Mexico accounts for 30% of US oil production, a 33% increase since 2008

80% of Gulf of Mexico oil production is due to deepwater oil fields

Loss of Deepwater Production has significant national economic & energy security impact.

Source - MMS

About Myself

Offshore Well Delivery Manager for Shell Upstream Americas

Over 23 years experience working in deepwater well engineering and drilling operationsOver 23 years experience working in deepwater well engineering and drilling operations

Previous President of the American Association of Drilling Engineers (2007 – 2009)

Member of the Society of Petroleum Engineers

2010 Chair – Gulf of Mexico - Deepwater Technical Symposium

Currently serving on Petroleum Engineering advisory boards for University of Wyoming & Montana Tech.

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To put this into perspective…

Auger TLP A16 Wellpath31 634 Feet (6 miles)31,634 Feet (6 miles)

Typical

Deepwater Well Barriers– Typical Well Using Production LinerWell At TD, Production Tieback Installed, Riser Displaced to Seawater

yp

Prod Liner

BOPs 

Drill String to set Cmt Plug

Kill

36”

22”

28”

Kill

Seal Assembly 

Locked in Pace*

KillMud or Sea Wtr

18” L

16” L

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C t B i i C i ID

KillMud

Surf. Cmt Plug / Packer Set 

13 5/8”Cement Barrier in Casing ID

Cement Barrier in Csg‐Csg Annulus

k

7” x 9 5/8”

11 3/4” L

Tieback Cement Plugs 

Liner Top Packer

Copyright of Royal Dutch Shell plc CONFIDENTIAL

7  x 9 5/8  Prod LINER

TD = 18,000 – 32,000’ MD

Open Hole Cement

How do Blow Out Preventers

(BOPs) work?

Pressure is applied to a piston which

forces a “Ram” to close on pipe or the

hole.

“Annulars” or Bag type Preventers, close

on any size pipe or an open hole.

Pipe RAMs – Close on Pipe.

Shear Rams – Cut the pipe & seal on

the open hole.

Casing/Pipe Rams – Close on pipe or

casing

Goal = Effective Barriers maintain the BOPS as a Secondary control

Fully Constructed, Deepwater Well