Technology Multilateral drilling, seismic acquisition top upstream technology needs

Keith Rappold
Drilling Editor

High-impact technology needs for the U.S. upstream oil industry include advanced seismic acquisition, high-resolution depth imaging, cementing, and multilateral drilling.

The Department of Energy and the national labs have shown a definite willingness to work on oil and gas research projects, providing the research and development could not be accomplished by private industry alone. The key for upstream companies, therefore, is to make effective use of these research resources and funding by working with the appropriate national labs.

The national labs, however, should not become the national research and development organization for the oil and gas industry, says the National Petroleum Council. They should not assist the oil industry in developing technology designated both as high impact and amenable to collective technology development by industry on its own. For example, the labs are not engaged in development of subsea production technology or extended-reach drilling systems because industry research has progressed very well in these areas. The labs will work in a technology area only if a national lab has competence already in that area and if there is a clear industry consensus that private sector sources for the technology are inadequate.

According to the NPC study, the research priorities vary considerably among types of company and by types of technology. The major themes of technology needs were improved resource characterization (for both exploration and development), reduced drilling costs, and improved understanding of complex reservoirs.

Advanced seismic acquisition was identified as a high need for independent operators, and horizontal well technology was the highest ranking need for service companies. The highest areas of impact identified by majors, other integrated companies, and independents were high-resolution depth imaging and improved well productivity.

Technology will be a critical component to discovery and utilization of new oil and gas resources. Exploration and development activity in the U.S. is down considerably from the peak in the early 1980s. This drop resulted from lower oil and gas prices, but also because many of the most promising areas are closed to exploration. It is in these frontier areas that the largest discoveries are most likely in the long-term.

Deepwater exploration and production in the Gulf of Mexico will progress rapidly during the next 10-20 years, primarily because of achievements in technology and the high per-well producing rates. It is highly probable that the deepwater Gulf of Mexico will become the primary supplier of domestic oil and gas in the near future, according to NPC.

The U.S. arctic regions will continue to be an attractive alternative to the other sources of oil and gas. The advancements in deepwater technology, however, will push arctic development further back because of the high cost of development and lingering environmental concerns.

Exploration

During the past 5 years, the labs worked on 25 projects in exploration technology ($38 million in funding). In exploration, $10.4 million was spent on geographic information systems technology, and $9.9 million on specialized seismic processing technology (Nos. 15 and 4, respectively, in Fig. 1 (52917 bytes)). The figure plots various exploration technology areas according to industrys assessment of how likely the technology will become available and the relative need for that technology.

More precise characterization of the resource would have the greatest impact on exploration success. Specifically, in the short-term, advances in high-resolution seismic depth imaging and advanced seismic acquisition will have a high impact. More than 80% of the survey respondents said they would collaborate with outside sources to develop these technologies for the industry as a whole. 3D visualization tools, 3D basin modeling, and amplitude versus offset in 3D would also have a high impact in the short-term.

Improved seismic imaging of potential reservoirs would increase success rates and help achieve reserve addition goals for both independents and majors.

We explore for hydrocarbons in the U.S. Gulf of Mexico. Seismic imaging of sedimentary structures below salt has not been possible in the past, said one independent. Computational facilities and technical staffs of the national laboratories can expedite the rapid development of depth imaging techniques to exploit subsalt resources. Advances in multicomponent seismic, cross-well seismic, and improved models of fractured rock for interpretation of seismic observation will help industry exploit resources, such as some of the western U.S. gas fields which require fracturing to produce.

In the longer term, advances in high-resolution seismic depth imaging continue to be a technology need. The majors see more impact in the long-term from 3D visualization tools and feel these needs will probably be met.

The integrated oil and gas companies feel a greater need for advances in seismic acquisition and geographic information systems in the short-term.

Independent operators have the greatest need for high-resolution seismic imaging technology and advanced seismic acquisition. Most of the companies surveyed felt this technology would likely become available in the short-term, and about three-fourths of them would collaborate to develop this technology.

Some companies, however, said much of the new technology is too expensive relative to its benefit.

Several independents said their primary concern was the profitability of exploration and development activities. Technologies which could reduce exploration risk, reduce development cost, and improve production performance would have the greatest benefit and impact, said the independent.

An analysis of the survey results indicates there are several areas in exploration and drilling technology suitable for partnerships between industry and the national labs. Good matches between existing lab projects and industry needs were indicated by high-impact ratings along with a desire by some companies to collaborate with the labs.

The projects with the highest impact and largest funding included the following:

High-resolution seismic depth migration technology
Specialized seismic processing
Computer-based 3D geological modeling
Development-scale seismic applications
Cross-well seismic imaging.

Advances in these areas are highly valued by the oil industry. The geotechnical and computational strengths of the national labs can be of great value in developing these technologies.

Drilling and completion

During the past 5 years, the labs worked on 22 projects in drilling and completion technology ($36 million in funding). Deepwater offshore technology, which includes drilling, production, and transportation, had only 7 projects ($4 million in funding). In drilling and completion, $7 million was spent on slim hole drilling technology, and $5.7 million on cementing technology (Nos. 9 and 4, respectively, in Fig. 2 (57173 bytes)).

In the drilling and completion category, the two areas in which the survey participants ranked the highest research and development needs were well productivity and advanced fracturing techniques. In the production category, well stimulation techniques and new directional drilling were most important.

The majors, independents, and integrated oil companies all stated that high drilling and production costs were a problem in the short-term. Any technology to reduce these immediate costs would be of interest to them.

One major said any new technology must key on turning more prospects into commercial developments. This will require lower-cost exploration and development drilling and production technology, as well as more effective exploration (pre and postdrill) methods. To cut overall drilling costs, extended-reach and horizontal drilling techniques, slim hole drilling techniques for exploration and delineation, lower-cost workovers such as coiled tubing methods, and multilateral drilling techniques need to be improved.

Another major operator said it would like more research to develop technology to clean drill cuttings better when oil-based mud or near oil-based mud is used to allow for cuttings disposal overboard (in water).

The majors also considered advances in unconventional, slim hole, and multilateral drilling to be needed. The other integrated companies added coiled tubing to their priority list. The independents also considered perforating and well bore applications to be an important need.

The results for the service companies were quite different from the other groups. The only technologies with significant needs were multilateral drilling, measurement while drilling, and horizontal well bore applications. Fracturing and gravel pack technologies were added as a write-in by all segments except the service companies.

The barriers to technology for operating companies are mostly cost related. Many of the service companies contacted said that government intervention and environmental restrictions are large barriers to development of new technology. The general slow-down of business worldwide, the lower price of oil and gas, and a lack of access to capital or financial resources have slowed the service companies development of new technology.

The majors, integrated companies, independents, and service companies mentioned horizontal well bore technology as important in both the short-term and long-term. The service companies feel that horizontal well bore applications will have the greatest impact and will become available in the short-term, in part because the service industry has worked extensively and effectively in developing horizontal drilling and completion technology.

According to one independent operator surveyed, high drilling and fracturing costs were some of its main problems, and it would work to help develop technology to reduce costs in those areas. Other technology areas that need refinement are steering tools and measurement-while-drilling tools for conventional, horizontal, and slim hole wells. Improved drilling and production techniques are needed to help control costs.

The survey respondents indicated new directional drilling methods will be needed in the future, but there was a general expectation that this technology will be available. In particular, horizontal well bore applications, multilateral technology, and unconventional drilling technology would have a high impact in the short-term. In the long-term, horizontal well bore technology and well productivity were indicated as the most important needs. Short-term and long-term deepwater offshore drilling technology needs included workover and extended reach technology, but these had a lesser priority than pipeline and production technology.

There were several drilling technology areas that were identified by industry as having the potential for high impact but for which there is little effort by the national labs, in particular, extended reach drilling, directional drilling techniques, deepwater drilling, deepwater workovers, and arctic drilling.

According to NPC, the lack of activity in these areas is consistent with lack of relevant enabling capabilities at the national labs and with industrys ability to develop these technologies collectively. The same applied to much production engineering technology as well. The NPC said the labs should not be involved in these areas and commended the labs for not duplicating industry work in these areas.

The labs have used their theoretical and computational resources on several projects dealing with fluid forces on risers and deepwater eddies. These projects may benefit companies interested in deepwater drilling and production operations.

Arctic region

The arctic region activities received responses primarily from the majors, with only a couple of responses from independents and the service companies and none from the other integrated companies. Two areas received a medium-to-high impact rating: development and drilling.

These categories were very general, however, and did not define specific areas in which to focus research and development. There was skepticism that the technology would be commercially available in all categories, but arctic drilling seemed to be of less concern in the near-term than the other areas. According to the survey, the industry generally believes the arctic region is a long-range frontier to be addressed after 1999.