‘Big hitter’ technologies to be focus in ’09

Critical D&C issues with Abdul Munim Saif Al Kindy, ADCO

By Katie Mazerov, contributing editor

Abdul Munim Saif Al Kindy is general manager the Abu Dhabi Company for Onshore Oil Operations (ADCO). It’s the largest operating company in the United Arab Emirates, responsible for exploration, drilling, production and export of approximately 60% of the country’s production.

DC: What are the key drilling and completion challenges facing ADCO and the industry today? Are there any issues specific to the Middle East?

Al Kindy: ADCO will face a number of key challenges, for example, effectively drilling older fields with losses and wellbore instability, drilling new sour-gas developments and complex workovers with extensive fishing operations to the niche application of intelligent well completions. In addition, we always have the challenge to drill wells more efficiently at lower cost, while not jeopardizing safety, quality and well objectives.

We also face resource challenges that are related to the competent and sufficient manpower within the contractor and operator communities. The necessary skill sets vary for different kinds of completions. The more sophisticated intelligent completions require different skill sets both in design and execution, as well from an analysis point of view during the well’s life cycle. This all goes against a backdrop where all organizations are trying hard to recruit personnel in an environment where there is an overall shortage of experienced and skilled staff.

An important yet different challenge is related to the way people of different disciplines work together. We have drilling engineers, reservoir engineers and geologists all involved in well construction, using their discipline engineering models and data sets. We need to fully capitalize on the technology that allows these models to be fully integrated. This allows our people to contribute in an optimum manner to each other’s work. However, solving this challenge is not just about the technology. It is equally important that we be receptive to new ways of working.

Specific to the Middle East, we are drilling and production-testing operations of so-called “high H2S” (sour gas) wells. ADCO has developed very strong local experience and capability in drilling and testing these wells.

DC: What technologies have proven themselves in meeting challenges such as these?

Al Kindy: ADCO is deploying a number of technologies based on the best and latest practices gained through our local service providers, as well through our shareholders. To further reduce well costs, ADCO is making a big impact with changes in well design, such as lighter casing designs. Technologies that are compatible with these design initiatives that will enable a further step change are casing and liner drilling, expandable technologies and swellable elastomers. All these feature in our 2009 technology plan. We will focus on a few “big hitters” that have wide applicability in our business plan.

ADCO also implements rotary steerable system (RSS) drilling technology in most of our wells supplied through our directional drilling providers. RSS leads to an optimum drilling process because the well trajectory drilled is smoother, there is better hole cleaning and the ROPs are higher. Therefore, ADCO is able to drill most hole sections very efficiently shoe to shoe. There are also great safety benefits because of the reduced number of round trips needed. As we know, good operational performance and safety go hand in hand.

We are planning to implement a real-time operating centre (RTOC) in 2009. Again, this is not just about the technology. It is foremost about the way our people collaborate, contribute to each other’s work and equally learn about each other’s work and, in the end, challenge each other’s paradigms.

A real-time operating centre is an immense learning environment that offers tremendous potential to provide fast-track training for our young engineers.

DC: What specific advances in drilling and completion technologies are you looking for from the service companies? What rig technologies are you seeking from drilling contractors?

Al Kindy: For each field, we have a large number of technical challenges for which we are seeking technology solutions. For example, we are looking at LWD technology with a resolution that is on par with e-line tools. Looking ahead of the bit technology will assist our geosteering in thin oil reservoirs. Intelligent completion technology will deliver “instrumented wells” that support our “Vision 2010+.” We require swellable packer/ ICD technologies for some of our long horizontal wells, and underbalanced drilling in 2009 for some of the wells.

We also are looking at novel technologies that make our workovers more efficient, particularly in the area of tubular recovery. Our completions are old and often corroded, and therefore difficult to recover with conventional fishing technologies. So we are redefining the way we do our workover business. Bear in mind that any new technology we adopt is always risk-assessed with HSE considerations in mind.

In terms of rig technologies, we are working very closely with our main business partner National Drilling Company (NDC). Our strategic choice for future rigs is a fast-moving modular desert rig that has basic automation and high-specification main components. These include a top drive system for optimum drilling performance; off-line tubular makeup; high-specification shale shakers with online monitoring for optimizing and controlling the mud properties; and consumption and PLC for better driller control of the operations of the main rig functions, like drawworks and mud pumps.

DC: How are you focusing on enhancing exploration and production in existing/mature fields?

Al Kindy: In the exploration area, we are working on the concept of the disposable exploration well. The idea is to keep it simple and fit for purpose. That means we drill the well, we log the well and we abandon the well. This results in a slim wellbore, which is good for logging and easy to abandon. For existing fields, there are many high- and low-tech options. Some examples of what ADCO is doing include:

• Achieving maximum reservoir contact through long horizontal wells in order to tap low permeable reservoirs. We plan this for 2009 in Asab.
• Stimulating programs for wells during their production life cycle.
• Activating strings with closed-in potential. This is a key area of focus in our business plan.

DC: What are some of the key challenges you face in sour-gas drilling? How can new technologies provide solutions in this area?

Al Kindy: These are related to material selection, safety systems, including well control and staff competence, but also production testing. Often in high-concentration H2S wells, the H2S goes together with CO2, and with this combination we are pushing the boundaries of the material compatibility envelopes for metals and elastomers.

Technology enablers are related to optimized and enhanced kick detection systems, avoiding sour-gas well control situations. Taking it even further, for large development campaigns, there is a role for customized “sour gas drilling rigs” with all the safety systems fully integrated. At ADCO, we maintain a core group of people who are highly skilled in sour gas drilling and production testing. We are making sure these skills are being transferred to our younger-generation United Arab Emirates National Drilling supervisors.

DC: What are some of the challenges you face in tight-formation drilling? How can technology help in this arena?

Al Kindy: For tight-formation drilling, we plan long horizontal wells. The key challenges are related to the drilling of these wells. We need rigs equipped with top drive systems and adequate hydraulic horsepower for these applications. Due to the low permeability, it is prudent that we do not introduce formation damage (skin), so novel low-damaging mud systems are preferable.

DC: What role do oil prices play in the need for new technologies in drilling and completions?

Al Kindy: ADCO is not in a very high-cost environment, like deepwater, remote jungle or harsh offshore. But irrespective of oil prices, there will always be a focus to deploy fit-for-purpose technology in our wells. Our needs are typically related to three technology drivers. The first involves technologies that can be deployed as a response to the asset-specific technical challenges. To improve production performance in an area where we are experiencing high water cuts, we deploy an ICD/swellable packer completion.

The second driver relates to technologies that respond to drilling-specific challenges, such as aerated mud drilling when losses are encountered, low rheology muds and pressure-while-drilling technology for ECD management. The last category includes emerging technologies that have high potential and on which we want to capitalize, such as expandable technologies. If we apply them smartly, these will become a “game changer” in well construction in ADCO, something we are committed to accomplish.

DC: Beyond technology, what other trends or solutions do you see on the horizon?

Al Kindy: Today’s oil industry comprises more new and less-experienced personnel than 10 or 15 years ago. Current demographics show a significant number of personnel will retire from the industry in the near future (“the big crew change”). We need to ensure that experience does not leave with the individuals, and through training, automation and perhaps different practices, we are still able to deliver quality wells, with good safety and a smaller and less-experienced workforce.

ADCO is revitalizing the well delivery limit process. This is an integrated business improvement process with a discipline involved. If applied correctly, big gains will be made. For example, when applied in an RTOC collaborative working environment, there will be the benefit of the synergies between skills and accelerated learning, alleviating some of the concerns addressed earlier. It is an enabler to do more with the same amount of staff, thus creating more focus.

DC: How has the fluctuating price of oil impacted your plans for continued exploration and production? How does this impact the degree of risk you are willing to take?

Al Kindy: At ADCO we take a long-term view. Our growth target is aligned to our country aspirations, as well as to the targets of our six shareholders. Our growth plans are still very robust in the current oil price environment. Our plans rely on a rig expansion program and a massive increase in the number of wells to 1,500 over the next five years. It is not our intention to repeat exactly what we did in the past; we are committed to continuous improvements.

We plan to make a quantum leap in well delivery. We have very well-skilled and motivated drilling and subsurface teams. These teams will design and drill the wells safely and in budget, aided by technology advances with rigs that have higher capability. This will cater for any further downside in the oil price scenario, if there would be any. But we have less control over the rig-building program, particularly as it relates to our suppliers. That is where our risk is, and we are carefully analyzing this with our partner, NDC.

DC: How is what is happening in the financial markets and global economy impacting your decisions regarding exploration?

Al Kindy: This does not affect our exploration program. The price of oil is a function of supply and demand, as well as the strength of the US dollar. ADCO to date has not reacted, and plans are in place to take full advantage of the trends in the market. After the shake-out of the financial markets and a period of stabilization, the oil price will return based on its underpinning elements. This will trigger increased global activity.

DC: How are you ensuring you can meet energy demands in your region?

Al Kindy: First, we have the hydrocarbons for sure, and ADCO has a strong track record in developing, and indeed has never missed a shipment. This region will always be an active supplier of energy to the world, and the UAE and ADCO will play an increasingly important role. Our plans are quite detailed and point to a good balance for a long time. Secondly, methodology. We understand the energy needs and potential shortages. One of our high-focus areas is related to artificial lift, due to where we are in the life cycle of many of our fields. We are aggressively pursuing alternatives to conventional methods like gas lift. For example, we are embarking on CO2 injection, which we will pilot (in 2009). If we succeed, a lot of gas currently planned for reservoir pressure maintenance will be directed to local and possibly regional markets.

Abdul Munim Saif Al Kindy is a former member of the IADC Executive Committee.