Today’s constantly changing market dynamics combined with low oil prices are driving E&P companies to achieve greater capital discipline and improved production performance. Since 2015, our industry has seen a unique inflection in operator spending, where today, OPEX now often exceeds CAPEX due to a reduction in drilling programs. With the ever-present pressure to deliver cash flow, operators across the globe are looking for opportunities to do more with their existing assets, and intervention can play a key part in this.
Expert interview: Schlumberger well intervention expert Matthew Billingham explains how well interventions can help maximize the business impact of OPEX spending and how new technological innovations are reducing the risks commonly associated with well intervention opportunities.
As operators are driven toward increased capital discipline, why and how should they consider doing more well interventions?
Well interventions offer a prime opportunity to generate value based on the investment cost per barrel. According to the Oil & Gas Authority 2018 Wells Insight Report, in the United Kingdom sector, there were approximately 600 wells shut in, which was 30% of the active well stock. What is of key interest in the findings is that £285 million was spent on interventions with 43.5 million boe maintained or added to UK Continental Shelf (UKCS) production. This means that each additional barrel of oil came in at £6.48/boe. Considering that some 11% of the intervention was subsea activity, but accounts for half the spend, it is obvious that the value from intervention is even greater for nonsubsea wells. Operators with production targets and limited CAPEX should consider interventions as a key strategy element. Many operators do, but with perhaps 3% to 4% of total OPEX/CAPEX spend on well interventions.
Another thing to consider is that production brought in by intervention has a lower carbon footprint as opposed to drilling new wells. The asset is already there and any additional production generated by coiled tubing or wireline is going to be very light compared with a drilling rig.
How do interventions maximize production from existing wells?
As fields and wells mature, production declines for a variety of reasons. Studies show that there is a 50:50 mix between challenges caused by well integrity and reservoir-related production issues. The word intervention can implicate a drastic measure. We should perhaps think of intervention as proactive maintenance that occurs throughout the life of a field or well. If production targets are being met, then everything is satisfactory, but even in this case, it is likely that production can be optimized. Perhaps if we address a field’s production only when the production figures are significantly impacted, then we are additionally increasing the cost to resolve the issues. To use an analogy, we take our cars to be serviced and maintained regularly. They are expensive assets, and we want them to be as reliable as possible. Checking fluid levels and tire pressures regularly is analogous to monitoring fluid contacts and well pressures to intervene or perform maintenance as necessary.
How much more production can be recovered from existing wells? Is there any data that indicates how much operators can retrieve?
There has been some excellent benchmarking done in the North Sea and Europe. Several years ago, the Well Intervention Excellence Network showed what was possible. In an SPE paper, a group of 22 operators reviewed the success levels that could be achieved, and the results were enlightening. Their review of historic data found that on average about a 10% contribution to production could be achieved by performing interventions. On offshore platforms, the rate was as high as 16%. Onshore wells saw a 9% increase. If we consider the cost per barrel as demonstrated and the potential production increases, then the case becomes incredibly compelling. I would argue that these figures can be increased with the right focus and new technologies.
So why are interventions not being done as frequently?
This is the key question! We have discussed the value, but let us take again the North Sea as an example. In 2017, the OGA estimated there was an average 14% intervention rate, but the variance was huge. Some were at 30%, and others did no interventions or associated surveillance campaigns. We know the percentage of total spend on interventions is extremely small. We should absolutely ask why this is so that we can turn this around. I see three main reasons.
- Risk is a huge factor. Intervening in a producing well to increase its production can be perceived as a possibility to lose all production if something goes wrong. This is sometimes referred to as the asset mindset. The possibility of damaging the formation or leaving a fish in the well is too great of a risk. Perhaps service companies that perform interventions daily might underestimate an operator’s concern when the activity for them is not a regular exercise for them.
- Complexity is another issue. Many operators have workflows that are focused on production increases by drilling. Putting an intervention program together and executing it requires a diverse team comprising production technologists, completion engineers, asset managers, facilities managers, reservoir engineers, and more. A return of experience on multiple problems and the right solution is also critical. Well underperformance can occur for many reasons, and each requires an appropriate solution. Confidently choosing the right technology and applying it correctly is key for a robust, predictable outcome.
- Cost also plays a part. From the above value proposition, it could be argued that cost might not need to be a key focus, but operators are also looking at means to reduce spend. We can indeed do more to reduce cost, and technology plays an important role here. Reducing footprint, reducing deferred production, and increasing efficiency can all contribute to this goal.
Where do you see the most opportunities for well interventions?
I see opportunity everywhere when it comes at the right cost. Across all our possible intervention platforms and techniques, we can address a huge variety of problems. Be it paraffin scraping on a low-production land well to a highly complex lightweight intervention vessel intervening on a deepwater subsea well, we have the solutions. I see huge opportunity in collaborative efforts to address the issues on a larger field scale where economies of scale and risk reward incentives can be considered. The biggest opportunity is to realize the value that interventions can bring, especially when times are tough.
What kind of technological innovations do you think can improve well interventions further?
There has been a huge amount of innovation in the last few years that can be capitalized on already. I see two key elements where digital innovations are enabling the next leap in performance:
- The use of real-time downhole data to increase the probability of intervention outcome. For too long we have relied on surface measurements alone to make decisions as to what is occurring thousands of feet below us. This is changing with the advent of technology like digital slickline services, the CT real-time powered downhole measurements system, and the instrumented wireline intervention service. Each one of these has brought a rich amount of real-time downhole data to enable the right decision.
- The evolution of existing technologies to reduce risk. We have tool planners now that let us model with better accuracy the downhole conditions than ever before. Wireline tension modeling is a critical part of most of operations now but especially on deep, high-flow tortuous wells. Cable technology has been revolutionized where we can intervene in a deeper well. Our new polymer-locked cables reduce friction, meaning higher overpulls and greater reach. They hugely simplify pressure control with no risk of stranded wires and eliminate grease in the environment. They can also have distributed fiber sensing technology embedded. On-demand release technology can leave a clean fish if absolutely necessary, enabling a simpler and more successful fishing outcome. We are also seeing technologies that bridge between conveyances. Digital slickline can do most electric line work now. Electric line tools can do basic coiled tubing operations with no fluids introduced into the well. Coiled tubing can now deliver electric power with distributed fiber sensing, taking it to new levels of capability. For coiled tubing safety, the real-time pipe inspection system ensures pipe reliability with continuous monitoring and tracking of defect evolution throughout the entire coiled tubing service life. All of this can reduce cost and risk.
Looking at current developments and the future, I see the power of what we can do with this technology to take interventions to another level.
Digital platforms we are working on today enable us to select wells and provide an intervention program in a fraction of the time with a high degree of certainty of the outcome based on the ability to learn from both real-time data and historical data. We will also be able to incorporate automation, not only into job planning but also execution. Today, we’re already deploying our autonomous milling system on the electric line instrumented wireline intervention service, but we are looking way beyond this.
In the last five years, the time has come for intervention. We are addressing the challenges operators see today across all axes. In a cyclical industry, intervention-based production can deliver a steady cash flow stream.