Gaslift Management in PDO Northern Directorate By Adi

Gaslift Management in PDO Northern Directorate By Adi Al Naamani Harith Al Naabi Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 1

Gaslift Management in PDO Agenda • Introduction • Designs, Improvements, Opportunities and challenges • Gaslift management and processes • Automatic Validation Tester (AVT) and Wireless gaslift trial • Overview per area and examples • Conclusion Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 2

Location IRAQ • Eygpt Sudan Petroleum Development Oman Gaslift Management in PDO Population 2. 3 million • Accelerated development • Saudi Arabia Country size 312, 000 km 2 • Turkey Libya IRAN 75 % income depends on hydrocarbon Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 3

People Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 4

People Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 5

Beaches & Wadis Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 6

Petroleum Development Oman GULF OF OMAN Sohar MUSCAT Sur • PDO (since ‘ 66) is a JV between 60 % Government of Oman 34 % Shell 4 % Total. Fina 2 % Partex • Shell is technical advisor § Production 700 kb/d (90% of Oman’s N Oil production) § 66 producing stations ARABIAN SEA S § 117 oil producing fields § Over 3000 active wells 100 km Salalah § 620 gaslift strings. 28% of production, 200, 000 bbl/d § 85% of gaslift production from North § Majority of fields under water flood Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 7

Gaslift wells in the Northern Directorate • The North of PDO has primarily carbonate reservoirs with depths varying from as shallow as 800 m to 2700 m deep. • Now there approximately 500 Gaslift wells constituting 50% of the oil producers. • In the North, Gaslift wells produce 45% of the oil and 42% of the gross. Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 8

Design • Design in most wells has 2 to 5 mandrels, depending on well depth and expected deepest operating point • IPO valves are run in >95% of the wells • Mostly unloading valve sizes are the same as the orifice valve size. • Redesigns are done where well behaviour becomes too unstable, parameters change Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 9

Initial Performance Operating @ mandrel 2 (through unloading valve) Future Performance after on-stream of Water Injector Operating @ mandrel 3 (through unloading valve) Petroleum Development Oman Gaslift Management in PDO Later Performance Operating @ mandrel 4 Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 10

Optimisation and Challenges • Well by Well – – – Unstable wells Leaking valves or tubing Well integrity (e. g. leaking casing) Possibility to lift deeper Scale clean outs • Group optimisation – Surface controlled gaslift rates through SCADA / DCS – Set-points based on optimal distribution of liftgas using Win. GLUE – Deferment reduction through re-distribution of liftgas Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 11

Optimisation and Challenges • Challenges w. r. t. optimal distribution of liftgas – Measurements (especially gas) are of insufficient quality. Flowing surveys are therefore essential – Well integrity problems has Impact on well models – Continuous changes in the reservoir pressure, PI, water cut etc. – The dynamics of reservoir not captured in well models. – Young & bright, but in-experienced production engineers. • Solutions – Dedicated production engineers on well integrity – Surveillance engineers responsible for only 50 - 70 wells in total – Intensive training and bringing in coaches Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 12

Process • Dedicated gaslift process – – – – Monitor and trouble shoot using SCADA and test data Understand the problem and correct Further investigation Analyse results of investigation Determine improvement potential, costs and justify activity. Design new gaslift string and schedule activity Set valves, test valves before running & test retrieved valves with AVT tester and feedback – Kick off the well and evaluate the results – Review and file report Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 13

PDO Gaslift Management Set-up Tubing pressure Casing pressure Gaslift Control SCADA SGAS-CAO Direct monitoring & Control of Individual Wells Gaslift Metering DCS Controls Gaslift rates to the wells Well Data Reservoir Data Win. GLUE Gaslift optimisation Software Production Data Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 14

Process Improvements • Win. GLUE gaslift QC database set up • Automated links • Central storage of gaslift analyses • Most wells available in the SCADA system (RTAP / SOFS or the latest PC based FIELDWARE). • AVT tester is used for QC valves before running and recently pulled valves Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 15

Decker’s Automatic Validation Tester (AVT ) • Implemented in the well services workshop • TROP, stem travel, R ratio etc. • • Rejected at agreed tolerances, e. g. TROP difference < 15 PSI >25% of the valves were rejected on TROP. Visible improvements Testing of pulled valves just started. >60% fail on leaking bellows. • Keep track of a “problem log” to increase understanding • Network connection is essential • Staff in the well services more conscious Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 16

Specific Overview per Area A • Constrained due to flaring restriction (no compressor ullage) • Workshop was organised • Deliverables of the workshop: – Coaching / training – Saving of 3. 6 million scf/d of liftgas – Well integrity problems found and repaired – Detailed gaslift surveillance was carried out and many wells were stabilised – Many gaslift measurements wrong and corrected – For 2003 the estimated impact on production is approximately around 1200 bbl/d. Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 17 L

Specific Overview per Area B • In Area B, test data quality is an issue • Some wells were found quit • Some wells found with scale obstruction. Cleaned out and restored. • Total increase in the Area B was 600 bbl/d or 10% of the total gaslift production. 3% 2002 & 2003 year average impact. Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 18 Q

Example of importance of F/S Well was tested 2000 bbl/d net oil, low BSW through 3 1/2” 200 bbl/d gain from switching on gaslift Tubing upsize was expected to double production Actual pressures Petroleum Development Oman Gaslift Management in PDO Theoretical pressures Flowing survey could only be matched with 1200 bbl/d and tubing upsize was canceled Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 19

Specific Overview per Area C • Area C consists of two large fields • Field N has mostly natural producers. – Flow limited by Gas Oil Gravity Drainage (GOGD) – N compressors are full. Cutting back liftgas investigated. • Field C is partly water-flood and partly GOGD • Workshop held. Opportunities found: – Reduce liftgas consumption to free up compressor space (cutting back lift-gas, running velocity strings, 3 1/2” to 2 7/8” tubing) – Some wells without RTU’s Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 20 F

Wireless Gaslift Valves Trial Area C • Wireless gaslift valves (2) were installed in a well in Field C in 2002. • Communication through a modem with PC in CCR and Main Office • Down-hole pressures and temperatures displayed • Full control from the desktop was achieved • Live optimisation • Modem on bottom valve broke down, but still operating. • Confirmed batch of modems (50%) Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 21 F

Wireless Gaslift Valves Trial Area C • Business case for large scale implementation being made, but – 15 - 20 times higher costs than conventional gaslift – Even with one third of costs, large scale implementation means 16, 000 bbl/d extra production is required or 8% of production. • Most promising to replace PPO valves & IPO running it as part of new well or existing well work-overs. Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 22 F

Specific Overview per Area D • Advanced automation; surface control valves linked to the DCS & SCADA. Full control and optimisation. • Main challenge is well integrity and continuously changing well performance. • Additional people have been put on the job in Area D (surveillance engineers). They complement the work of the other production engineers. • Coaches brought in Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 23 Y

Specific Overview per Area D - Well Examples Surging pressure before Optimisation 5000 4500 4000 3500 3000 2500 700 2000 600 1500 1000 500 400 0 25 -Apr 25 -Apr 300 Tubing Pressure Casing Pressure 200 100 6000 Gross m 3/d 3000 Net m 3/d 03 ay M M ay - 03 3 Ap r-0 Ap r-0 M ar -0 3 3 ar -0 M 4000 3 0 5000 Gas Lift x 100 m 3/d 2000 1000 0 28 -May 28 -May Tubing Pressure 28 -May Maintain Production with 50% less Liftgas 28 -May Casing Pressure Stable operation after Optimisation Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 24 Y

Specific Overview per Area D - Well Examples Surging pressure before Optimisation 7000 6000 500 450 5000 4000 350 3000 250 200 150 100 5000 Net m 3/d 3 Ap r-0 3 3 ar -0 M 3 M ar -0 M b- 03 03 Fe 03 b. Fe b- 03 Gross m 3/d Fe b- 03 Fe n. Ja Ja n- 03 0 03 Casing Pressure 50 n- 22 -Sep 03 22 -Sep Ja Tubing Pressure 22 -Sep Ja 22 -Sep n- 22 -Sep 03 22 -Sep Ja 22 -Sep n- 0 22 -Sep Gas Lift x 100 m 3/d 4500 4000 3500 3000 2500 Production increase of 350%. 2000 1500 1000 500 0 28 -May Tubing Pressure 28 May 28 -May Casing Pressure Petroleum Development Oman Gaslift Management in PDO 28 -May Stable operation after Optimisation Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 25 Y

Conclusion • Reduction in Liftgas usage (~36 mln scf/d) • Cost savings on Gaslift compressor requirements. • Enabled production of high GOR wells • Create compressor capacity to handle new oil producers. • Stabilising wells, Reduce flaring • In some cases lifting deeper • Sum of the measurable initial production increases after activities in 2003 is around 4500 bbl/d (2% of total North) Year average value is 0. 7%. Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 26

What is happening next …. . ? • Further enhance staff competence and skills • Complete implementation of the AVT tester • Trial new technology such as Bubble breaker, Bubble gaslift and surface controlled gaslift valves • Bringing in a dedicated production engineer for gaslift • Continue with the efforts, because it pays back. Petroleum Development Oman Gaslift Management in PDO Adi Al Naamani and Harith Al Naabi PDO 2004 Spring Gaslift workshop Houston - 10 & 11 February 2004 27