Fields of dreams

The Middle East region has the smallest geographical footprint of any of the Halliburton regions, but over half of the world’s known reserves. With giant fields including the largest oil reservoir (Gawar, Saudi Arabia) and largest offshore gas reservoir (North Field, Qatar), historic finding and lifting costs have been very low.

To meet ever increasing global energy demand, key countries such as Saudi Arabia, United Arab Emirates and Kuwait have plans to increase oil production by an additional 6.9 million barrels of oil per day (bpd) over the next 13 years (to put things in perspective, this increase is more than the current total US production). To do this they have to improve productivity and recovery rates from existing fields, as well as develop smaller and more technically challenging reservoirs.

Improving recovery rates in existing fields and developing new fields will allow the application of a wide variety of new products and services from the oil services industry. Mature fields will require increasing artificial lift, water management technologies, reservoir characterisation, improved drilling efficiency, extended reach drilling and process optimisation to minimise production decline and increase efficiency. The new fields offer an opportunity to apply new technologies such as efield, smart wells, reservoir monitoring, multilaterals and under balanced drilling to better plan for ultimate recovery.

In addition to striving for increased oil production, many Middle East countries have a lot of capital available for reinvestment with oil pricing pushing the US$100/bbl mark. There is a trend to diversify the GDP from a reliance on oil and LNG exports. This diversification is spread in different areas around the region from real estate to tourism, finance and industrialisation. All of these activities are increasing the countries’ energy needs and thus the need for natural gas as well as alternate energy sources.

Although the Middle East has plenty of natural gas reserves, this has not been the focus area in the past outside Qatar. Some of this demand will be met with projects such as the Dolphin pipeline to bring natural gas from Qatar to the UAE, but many governments are now focusing efforts on natural gas. This is an area international operating companies have capitalised on through their global natural gas production expertise and technology in order to gain access to Middle East reserves. This trend has seen the entry of Shell into Saudi Arabia for gas exploration; BP, BG and PTTP into Oman for gas field development; and the recent invitation to tender for the sour gas field in Abu Dhabi. Pressure pumping technology widely utilised in the US will see increased activity as the demand for gas increases in the region.

To accomplish the increases in oil and gas production, our clients have increased rig count by more than 40 percent over the last two years. This increase in rig count and capital spend has been great for Halliburton and our competitors. However, this growth has also stretched the industry’s capacity to supply qualified personnel and applicable technology safely. It’s an issue that we at Halliburton are taking very seriously.

On the people front, we have increased our national content substantially, supplied experienced expatriate personnel where required and utilised real-time operations to ensure operational service quality. The rig count growth was most prevalent in Saudi Arabia, where we saw an increase of over 60 percent in two years. With the award of the Khurais project we needed to ensure we maximised the use of our most experienced personnel. In late 2006, we opened the Remote Operations Centre (ROC) in Saudi Arabia where we can bring multiple rig operations to one central location. This has allowed us to have our most experienced personnel monitor multiple rigs, and as a result we have already realised a reduction of over 50 percent in human error related NPT for Sperry in 2007. The real-time operations have not only enhanced our capability to provide a quality service, but operators are using real-time services such as INSITE to improve well placement and make better decisions faster. This was apparent when an operator in Saudi’s Empty Quarter utilised INSITE Anywhere to bring real-time pressure testing data to experts in their hotel room while travelling.

The supply of applicable technology is another area where we are seeing an increase in demand. The wells are getting more complicated, and to counter increasing costs the operators in the Middle East are looking for efficiencies. There has been an increase in utilisation of rotary steerables and performance motor driven rotary steerables such as the Halliburton Geo-Pilot GXT to reduce drilling time. This technology has increased the drilling rate by more than 30 percent in most applications, and much higher improvements have been seen in many fields. Also, with the increased well complexity, there has been an increase in the utilisation of logging while drilling (LWD) tools to replace wireline in many applications. LWD tools have always provided a rig with time savings, and with improved sensor measurement in gamma ray, resistivity, density, porosity and formation pressures, wireline replacement is now becoming a reality. Even resistivity imaging is moving to the LWD platform, with new tools like the Azimuthally Focused Resistivity AFR tool from Halliburton.

Improved drilling and evaluation tools are being combined with improved mud systems and bit designs to continuously push the technical limit from an efficiency standpoint, as well as improving production and reducing environmental impact. High performance water-based muds such as Baroid’s PerformaDril-N are being used to provide the benefits of improved rate of penetration, hole stability and low formation damage without the waste handling issues of oil-based mud. Bit design processes such as Security DBS’s Design at the Customer Interface allows rapid bit design and refinement, and has resulted in many recent record-breaking runs.

The technology climate is changing in the Middle East. National oil companies are looking to collaborate with service providers to develop technologies that meet the specific challenges encountered here in the region. Operators such as Saudi Aramco, for example, have recently announced multiple collaborative developments with service providers, and are looking to ensure tomorrow’s technologies will address their challenges.

2008 still looks to be another year of high activity, with smaller targets, smaller reservoirs, re-entry, depleted pressures, extended reach drilling, under balanced drilling, multilaterals and maximum reservoir contact wells. Key technologies and our innovative workforce here in the Middle East will help us meet our client’s ever increasing challenges, and in turn help them meet the increasing demand for oil and gas.