Pierce Redevelopment from start to finish - Devex Conference · Pierce Field Development Plan May...

Copyright of SHELL UK UI May 19, 2011 1

Pierce Redevelopment from Start to Finish (almost)

Presenter: Ash Holland

Acknowledgments:- Pierce Team- Pierce Partners

- JX Nippon E&P UK Ltd.- Summit Petroleum Ltd.

Use this area for cover image

(height 6.5cm, width 8cm)

Partners:

Copyright of SHELL UK UI

Cautionary Statement

This [presentation, report or speech] contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. Also included as a forward looking statement is our disclosure of reserves, proved oil and gas reserves, proven mining reserves, organic reserves, net reserves and resources. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this [presentation, report or speech], including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this [presentation, report or speech] are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2007 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of [insert date of presentation, report or speech]. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this [presentation, report or speech].

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this [presentation, report or speech] that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

Also in this [presentation, report or speech] we have aggregated our equity position in projects for both direct and indirect interest. For example, we have aggregated our indirect interest in the Pluto project via our 34% shareholding in Woodside Energy Ltd.


Contents

� Introduction to Pierce

� Complexity

� Development History

� Re-development #2

� Summary

� The Future?

Introduction Development History Strategy WRM New Wells


Pierce Background

May 19, 2011 4

4

16 E & A Wells

8 Oil Producers

3 Gas Injectors

3 Water Injectors

Field History and Development

� Partners: Shell (operator), Nippon,

Summit

� South Pierce discovered by Ranger in

1975

� North Pierce discovered by BP in

1990

� Production began in 1999 under



Pierce Background

May 19, 2011 5

5

� Distal turbidite field

� Twin salt diapirs with dips >70°

� Gas re-injection and Water Injection

� Gas Compression Constraint

� Highly heterogeneous permeability 0.1-400 mD

� STOIIP ~ 450 MMbbls, Np ~100 MMbbls

� GIIP ~ 450Bscf

� Phased Development – Oil first followed by Gas

export



Pierce Complexity

� High Heterogeneity

� Steeply dipping reservoir

Topographic High

Topographic Low

Sediment Pathway

� Graded Oil

� Areal changes in Oil and

Water chemistry


N


Pierce Complexity

Oil-water Contact

� Different theories throughout the field’s history

� Few OWC drilled and vary between 9700 – 10140 ft tvdss

� Pressure and fluid changes observed while drilling across faults

N S N S

Water

Oil

Gas

• Tilted OWC contact schematic • Stepped OWC contact schematic


Copyright of SHELL UK UI8May 11CONFIDENTIAL

Development

History


Pierce Field Development Plan

May 19, 2011 9

Initial FDP (1997)

� 6 horizontal oil producers

� 2 Gas injectors

� Gas-Cap expansion drive

� Pressure support from aquifer? Option to install water injection retained




May 19, 2011 10

Initial FDP (1997) Water Injection FDP (2005)

� North Pierce pressures ok

� South Pierce pressure support weak

� Reduced from ~4,800 psi in 1999 to ~3000 psi in 2002

� Drilled a horizontal water injector to pair with each producer



Redevelopment #1 – Water Injection

May 19, 2011 11

~ 3 out of the 4 wells

+ Successful in re-pressurising South Pierce

+ Successful in reducing GOR decline for 2 years

- Fractured into A1 which resulted in premature lift die-out



Redevelopment #2 – GOR again

May 19, 2011 12


Copyright of SHELL UK UI13May 11CONFIDENTIAL

Redevelopme

nt

#2

Copyright of SHELL UK UI May 19, 2011

Summary

�Value of Data

� “Threshold” decision

making

�Going Back to Basics



Initial Projects

May 19, 2011 15

New producer

North Pierce Appraisal Well

-Tilted vs. Stepped OWC



Field Operational Strategy

May 19, 2011 16

From

To

WRM New

Wells



Wells and Reservoir Management

May 19, 2011 17

� Fixed the Well Test

Separator

� Altered gas re-injection

ratio between North and

South

� Maximise offtake points to

minimise pressure

gradients in the reservoir

� Reduced water injection

� Added an additional Gas

From

To



Gas Injector

Recompletion of A10 - March 2010

� Enabled a reduction of injection

rate at the other two injectors

� Improved sweep of oil between A1

and A5

� Up-dip pressure support for the A1

well

A10A5

A1A8z

A2y

8

South Pierce



Results

May 19, 2011 19



Results

May 19, 2011 20



Locating the Remaining Oil

Development Team started from

scratch

� Collected and put together all the

raw data

� Mainly focussed on OWC’s

� Material Balance

� Static Polygons

� 4D seismic

21

N

KEY

E&A WellOil Producer

Water InjectorGas InjectorFault

5x

22z

3z3

A4

A9A3x

A7

A7z

A5A1 A8

zA10 4

5

1

6

B310B2

B4a

3

A2y8

B1

4D Water Sweep Signal



LTRO Results

Targets, Risks and

Uncertainties

� Portfolio of targets; each

with a range of recoverable

volumes and associated

risk

�High Case

�Mid Case

�Low Case

NNP

A9

4

5

110

A11

B5




May 19, 2011 23

Initial FDP (1997) Water Injection FDP (2005) Redevelopment

� Following re-pressurisation and a two year stabilisation the GOR began to rise

� Lowest risk opportunity developed and an appraisal well drilled

� Initiated a proactive operational strategy focussed on optimising GOR

� 1 additional gas injector

� A redevelopment study was initiated which identified

� 3 additional oil producers



Target #1: B5 New Drill - July 2010



Target #1: B5 New Drill - July 2010

Targeting volumes up-dip of

watered out B2 well

KEY

E&A WellOil Producer

Water InjectorGas InjectorFault

6

B3

1

B5

B2B1

5

4

A2y

8z

8

A10z

South Pierce



Target #1: B5 Results

May 19, 2011 26

35% initial increase in production



Target #2: A11 New Drill

Targeting volumes Down-dip in the saddle & Gas lift installed in Pierce



Target #2: A11 Results

May 19, 2011 28

TD at 14,890ft MDKO at 10,300ft MD



Target #3: NNP Development

5x

North Pierce

A3xA9

A4

A6

A7

3z3

2

2z

MDS

Targeting undeveloped part of the

field



Summary

� Value of well testing

� “Threshold” decision

making

� Back to basics

methodology

� Good results from 1st wave

of redevelopment wells

� 2nd wave of LTRO

opportunities currently



Acknowledgements

� The authors would like to acknowledge the Pierce

partners Summit Petroleum Limited and JX Nippon

Exploration and Production (U.K.) Limited for their

permission to publish.

� The authors would like to thank the Pierce team for

their input and hard work during this project.

May 19, 2011 32

Pierce Redevelopment from start to finish - Devex Conference · Pierce Field Development Plan May...

Documents

Transcript of Pierce Redevelopment from start to finish - Devex Conference · Pierce Field Development Plan May...