Pushing the boundaries back

Applying breakthrough technology during increasingly complex exploration ventures and production processes can vastly accelerate success for energy companies – and utilising such tools has always been high on Shell’s agenda. For the international oil giant, technology implies much more than R&D – in fact, the company’s long-held belief is that it encompasses the whole sequence from creating scientific ideas, turning those ideas into technological innovation or tools, and then applying them in the field. This philosophy has helped to ensure that Shell remains a major force in the industry. With exploration and production ventures in more than 39 countries, including the Middle East, tapping into cutting-edge technology is integral to helping the company conquer even the harshest frontiers.

Game changer

Innovation is integral in the oil and gas industry. As exploration ventures into remoter and more challenging environments in search of resources, technology must evolve to meet the changing operating conditions and Shell has been a pioneer in the utilisation of cutting-edge solutions. Through its GameChanger programme, it has brought over 150 innovations to the industry over the past decade. “The ethos of the programme is to improve Shell’s business by stimulating and sponsoring the development of radical ideas that either fundamentally reshape an existing business, or allow it to explore wholly new directions,” says Raoul Restucci, Shell’s EVP for the Middle East, Caspian & South Asia regions. “At its most basic, GameChanger is a group of full-time Shell professionals with varied backgrounds in the business and technology of the energy industry. GameChanger teams exist in each of Shell’s primary business sectors and at the corporate level. Each GameChanger team invests a separate pool of funds in new and unusual technologies or business ideas related to the industry.”

Bringing together some of the company’s most creative people, the programme is an opportunity for the developing and nurturing of innovative ‘out of the box’ ideas outside the company’s regular R&D programmes. According to Russ Conser, the Houston-based manager of the project, GameChanger offers inventors a “safe” place to start. “Typically, radical inventions face what I call the ‘myth of the better mousetrap’,” he explains. “You think that you will invent something wonderful and that everyone will beat a path to your door, but the reality is that often inventors are faced with the attitude of ‘that’ll never work’ or ‘even if it works, no one will care.’ GameChanger is a place where people can get their ideas off the ground and we help them develop their inventions to a level where they can go to traditional outlets.”

Of course, not all ideas make it past the discussion table, but of those that do many have far exceeded expectations and provided a substantial return on investment. Out of around 1500 applications, approximately 10 percent have made it through to the funding stage. A notable success story is E-ZIP, or the Expandable Zonal Inflow Profile, an elastomer product that swells automatically when in contact with water and shuts off water-producing zones in reservoirs. Once fully tested, the company hopes to apply it to its field operations – believing this is the only way to evaluate the success of any new solution. “It is the field experience that boosts the value of new technologies,” confirms Restucci. “Obviously the risk of failure and problems is especially high in the early applications, therefore the initial rollout is the biggest challenge that needs to be overcome. The oil industry in general is rather conservative in deploying new technologies, as the risk is much higher than in other industries, therefore the penetration of new tools used to be slow. However, Shell has managed to reduce the time from development to commercialization through the foundation of joint ventures with service companies that market the technologies. Some successful examples of this are the commercialization of E-ZIP and expandable tubulars, where a rapid market take up was achieved.”

Innovative technologies

One technology that Shell is exploring the potential for is virtual source technology, a technique invented and patented by Rodney Calvert, Shell’s late Chief Scientist for Geophysics. The technology is instrumental in overcoming a common problem in seismic surveying and imaging – the blurring of the images due to complex overburdens and certain rock types, such as salt. There are ways of mitigating this problem and the technology is certainly helping. “One way to overcome the problem is to avoid it altogether by physically placing the source and receivers below the troublesome overburden in an existing well,” suggests Restucci. “Even better would be the ability to be able to locate the sources exactly where you think they will do the most good. Virtual source technology allows geophysicists to do just this.”

So far, the company is benefiting from applying virtual source technology in vertical seismic profiles. According to Restucci, these offer great advantages in areas where, for example, overlying salt bodies mean that the velocities obtained from check shots are expected to be inaccurate. “In producing fields with permanently placed sensors, these virtual check shots could be used to monitor for potential problems with the integrity of well casings,” he explains. A second great advantage of virtual source is that the technology can alert personnel to potential hazards lying ahead during the drilling of wells, a feature of obvious benefit for geophysicists.

Another technology that Shell plans to use extensively in the future is seabed logging. Frustratingly, seismic data normally highlights the structures that might contain hydrocarbons rather than a more accurate prediction about the actual properties of possible reservoir rocks and the fluids they contain. “Controlled source electromagnetic (CSEM) or seabed logging (SBL) surveys with anomalous readings may indicate the presence of hydrocarbons directly, giving additional confidence that there is a possible oil or gas field,” explains Restucci. “SBL surveys could also be used when only sparse seismic data is available (such as a 2D grid), to indicate that it is worthwhile continuing with more expensive 3D seismic surveys. Other than seismic, EM measures differences in conductivity rather than velocity/density. We integrate seismic and EM to de-risk exploration because two datasets allow a more accurate prediction/modelling of the subsurface. Shell has an edge in EM, since we are deploying EM more widely than other companies and have better proprietary algorithms to interpret the data.”

Initial responses to the technology by Shell have been positive, and the company is anticipating using the technology in shallow water and to extend the depth limit beyond the present 2500 metres below seabed.

EOR in the Middle East

Having recognised the potential rewards that utilising enhanced oil recovery (EOR) technologies can bring, Shell has been developing a number of such projects, five of which are under construction in the MENA region (as part of a joint venture with the Omani Government), which utilise the three main EOR technologies. Restucci is enthusiastic about the further adoption and development of these technologies. “Shell’s global R&D programmes aim to expand on these technologies, and include research into chemical EOR, foam injection, in situ combustion, contaminated gas re-injection, and steam in fractured carbonates,” he says. “Several proven techniques can enhance recovery, adding significantly to the amount of oil extracted from mature fields. For instance, if oil companies increase what they expect to recover from reservoirs globally by just one percent, it could yield 20-30 billion barrels of additional oil. That’s roughly equivalent to the proven oil reserves of the USA. Moreover, today’s elevated energy prices increasingly make these techniques economically viable.”

The Fahud oilfield at the Natih reservoir in Oman is just one location expected to benefit from improved techniques. “Using existing production methods, just 30 percent of the field’s original six billion barrels of oil in place can be produced,” says Restucci. Applying enhanced recovery techniques at the oilfield, however, is greatly anticipated to improve the recovery rate of oil by an extra 10 percent. Furthermore, at the Amal fields, 500 kilometres south of Fahud, the company is planning to test techniques such as ‘steam soak’ to help transform the thick, viscous crude oil. This involves heating the oil with the use of steam for a month to make it more liquid and then pumping it out from the well. Again, production is expected to increase.

Elsewhere, toxic gases have been a problem during production at the Harweel oil field, but by re-injecting the gas into the reservoir to force out more oil Shell has turned a potential problem into a solution. “Harweel represents a massive technical challenge because of the high concentration of toxic gas,” explains Restucci. “The reservoir contains about 50,000 parts per million (ppm) of hydrogen sulphide; breathing concentrations of just 600ppm would be lethal within three minutes, which makes safety an important priority for the project. Hydrogen sulphide is also highly corrosive, and pipes and other production equipment must be built using anti-corrosion materials.” Shell’s technique involves separating most of the natural gas from the hydrogen sulphide and CO2 before pumping these gases back into the reservoir. “This gas ‘cocktail’ blends into the oil, making it more fluid while maintaining the field’s pressure and making the oil easier to produce,” he continues. Using this approach, the company projects that about 30 percent of the oil can be recovered, compared to just 10 percent using conventional methods.

Finally, at the Marmul oilfield the company has introduced polymer flooding to help overcome the challenges associated with processing the reservoir’s heavy oil. “As in most oil fields in the world, the oil that flows from Marmul is mixed with water,’ says Restucci. “For each barrel of oil currently extracted at Marmul, eight barrels of water are produced. It is highly saline and unsuitable for agriculture, let alone for human consumption. Oil companies routinely re-inject water they pump from reservoirs to help force out more oil. However, conventional water-injection methods do not work in Marmul. The reservoir’s crude is so thick that the water tends to pass right through the oil, rather than pushing against it. The solution is to add a chemical polymer to the water to make it more viscous and help drive more oil to the producing wells.” Once impurities such as sand have been removed from the re-injected water then the process can be freely allowed to work.

Bigger and better

Restucci explains how, in previous years, Shell’s main focus was on exploration near existing oil and gas fields. Discoveries in known petroleum systems could be made with relatively low risk, and could be produced quickly through existing infrastructures. But this focus is changing. “The need to make large discoveries has moved the exploration focus towards new geological concepts or plays in existing areas, and also to new areas with geological basins new to Shell,” he says. “To achieve success with this new focus, exploration departments need fast ways to identify the new concepts and areas, and pursue the best prospects. This strategic change has profound implications for the development and implementation of technologies that are used in exploration, in particular in large and remote onshore areas.”

Indeed, delving into deeper water in search of hydrocarbons means that companies will need to adopt new technologies to cope with the specific challenges this task will entail. For instance, Shell’s Perdido project in the Gulf of Mexico will be the world’s deepest spar production facility linking some 22 wells from several separate fields when it comes on-stream around the turn of the decade. “One of these wells, at approximately 9600ft (2930m), will be the deepest subsea producer,” says Restucci. “Other challenges include exploring in subsalt and sub basalt environments, looking for smaller reservoirs, and covering large areas at lower costs (such as the ‘empty quarter’ in Saudi Arabia). Sensitive environmental areas like the Arctic pose unique challenges. These include the need for smaller rigs that reduce emissions and the overall operational footprint.” To mitigate the associated challenges, Shell has developed or acquired a suite of technologies ranging from fast screening of new basins and plays to the rapid appraisal and identification of confirmed reserves.

But beyond the technological challenges, Shell is also committed to sustainable development in new frontiers and developing solutions that enable increased production in a socially and environmentally responsible manner remains a key plank of this strategy. “Exploration success will come from an integration of seismic and non-seismic technologies, leading to improved sub-surface interpretations not possible with any single technology,” concludes Restucci. “By using novel technologies, Shell can extend its exploration from the traditional heartland areas to new ventures in more remote areas, and the remaining unexplored ultra-deep water regions. Large discoveries have already been made using this new approach and future discoveries will ensure further sustainability of Shell’s oil and gas business.”

Get smart with enhanced oil recovery

How is Shell combining EOR technologies with its Smart Fields approach? Raoul Restucci explains…

Shell is currently running 12 asset programmes with more than 25 component projects across the world. Brunei Offshore East, Sabah and Sarawak assets in Asia and Mars Basin in Americas are the locations chosen to demonstrate the total package of Smart Fields integration. Beyond technology, Smart Fields also requires a dramatic shift in work processes and people. Technology is the enabler but the benefits are only seen through the total integration of data collection and analysis with transformed decision-making and collaboration.

The Brunei Offshore East Asset is a prime example of Smart Fields technology at work. The asset is comprised of both a Greenfield (Champion West) and a Brownfield (Iron Duke) site fitted with Smart operations. Champion West was discovered in 1975 but due to its complex attributes, the field did not allow for an economically feasible development until Smart technology and workflows were introduced. Since the beginning of 2004, eight successful ‘Smart Wells’ have come online within the integrated field optimisation approach.

Crude oil production started in February 2006 from Phase III Champion West field. There, we applied the Smart Fields concept and reduced the development costs by $1.0-1.5 per barrel. The most recently completed phases ended in June 2007 with five new snake oil wells and three gas wells onstream. Each of the five wells achieved initial production rates in excess of 12,000 b/d of oil, some of the largest Brunei Shell Petroleum flowrates on record. The snake well campaign was completed 49 days earlier than planned and with around 21 miles (34 km) of hole drilled.