People and Partnerships Delivering a World‐Scale Field Development

Richard H. StraussChevron Energy Technology Company

June 25, 2009

Agbami Field Overview

Nigeria

Benin

Lagos

Warri

Port Harcourt

Escravos

Bonny IslandBrass

OML127

OML128

Gulf of Guinea

100 km

AgbamiAgbami

~ 200

km

N

• 965+ MM bbl reserves• 47° API (sweet crude)• +/- 4,800-ft water

depth

10 Years fromDiscovery to Production

1993OPL 216 license award

1998Agbami #1 discovery well

1999 – 2004Appraisal drillingFront‐end engineering

2004 – DecemberFirst Nigeria Deepwater Unit agreementFPSO contract award

2007 – OctoberFPSO sailaway

2008 – JulyFirst oil production

2008 – OctoberGas injection

2009 +

Development drilling continues

Concessionaires

Nigerian NationalPetroleum Corporation

Famfa Oil Limited

Agbami Unit Operator

Star Deep Water Petroleum Limited (an affiliate of Chevron Corporation)

Other Funding Participants

Statoil Nigeria Limited

Petróleo BrasileiroNigeria Limited

Texaco Nigeria Outer Shelf Inc. (an affiliate of Chevron Corporation)

AGBAMI FIELD

Field Development Plan

• Floating production storage and offloading vessel (FPSO)

• Flexible risers

• 38 subsea wells

• Crestal gas injection and peripheral water injection

• Offloading buoy with U-shaped pipeline

Agbami Field Size (If in Houston)

5

South Loop Fwy

North Loop Fwy

AGB-08WM L3

AGB-04

WOL2

W M B

AGB-11(PJL3)

PNL2

PLL3PM C

PQL2

PM DGM D

GAM 1AGB-13(GGL2)

PM EAGB-10(PIL4)

PPL4 AGB-14(PHL4)

PM F AGB-06

PBM 2PAM 3

AGB-15(GDL4)

GM G

GHL6

AGB-12(PGL4)

PDL6 PFL5

W M C

AGB-09

WJL3

WNL3

W M D

AGB-05(WAL4)

WEL5

WDL6

W M AWFL7

WUL1

PVM 1 AGB-07(PDL1)

AGB-03

PAL7

WGL7

PCM 1GEL1

WM B

WM B1

GBM 6AGB-

02

Agbami Contractor Locations

6

KONGSBERG

KOS SS ControlsEng'g & Manuf.

MOSS

PARIS

LE TRAIT

MONACO

OKPO

UAE

NIGERIAAGBAMI FIELD

BRAZIL

HOUSTON

NEWCASTLE

Kvaerner Dynamic UmbilicalDesign & Manuf.

KvaernerPM & EngineeringRisers, Flowlinesand Umbilicals

Acergy Offloading LinesEngineering

Flexi-France

Risers & FlowlinesDesign & Manuf.

SBM Suction Pile Design

Hull EngineeringHull Construction

Topside FabricationHull/Topside Integration

DSME

Lamprell Buoy Turntable

Grinaker SS Manifolds and Piles Manufacture

FMC Operations Support Base

NETCO FPSO TopsidesDetailed Eng'g

DNL FPSO Modulesand Flare Fab'n

Nigerdock FPSO Modulesand Piles Fab'n

Nigerdock Offloading Buoyand Piles Fab'nShore FacilitiesInstallation Site

DSME FPSO

SBM / Acergy Offloading System

TEF Fowlines/UmbilicalsManifold Installation

FMC Installation andHUC Support

MODU Drilling/Completion& Tree Installation

FMC Flowline Swivels

KBR FPSO TopsideEngineering

SBM FPSO MooringEngineering

FMC SS Engineering &Tree Fabrication

SBM OSC Project Mgmt& Buoy Eng'g.

DUCO UmbilicalsDesign & Manuf.

Critical Success Factors 

• Establishing a worldwide Incident‐ and Injury‐Free®

culture

• Achieving schedule benchmarks

• Setting new standards in Nigerian content• Maintaining high production reliability

• Managing a challenging cost environment

Creating an Incident‐ and Injury‐Free Culture

• Agbami was delivered safely; however, every injury was clearly preventable: Five days away from work (DAFW) injuries in 18 million work‐hours 

• Commitment and belief in working injury‐ and incident‐free across the global Agbami team

• Creative approaches to safety procedures and practices

Delivering a New Standard in Nigerian Content

• Strategic objective embraced by all project participants

• 10,000 tons fabricated in Nigeria

• 3 million work‐hours with zero DAFW injuries

• 300,000 FPSO Nigerian engineering work‐hours

• 100+ Nigerian engineers trained worldwide

1,700-ton Flare ModuleDaewoo Nigeria Ltd., Warri

Nigerian Content Successfully Delivered

Offloading Buoy, Suction Piles, Two FPSO Modules, Nigerdock, Lagos

First Fabrication of Subsea Manifolds in Nigeria GrLTA, Port Harcourt

Drilling Program:Decades of Commitment

17DOC ID© Chevron 2005

Typical Agbami IWC…

Field level: 2 separation trains, complex network of 8 sub-sea manifolds & risers (prod/inj)

At the reservoir level, multiple lobes within the same reservoir

At the well level, 2 valves forzonal control plus a number ofmeasurement devices- (6) P,T,Q

Well level

Reservoir level

17D

17E

17F

ZONAL / WELL SURVEILLANCE & MONITORING

WPO-Well Perf. Optm.

Drilling = ~ 50% of total project investment

•Stage 1 

– 22 wells to reach plateau production

•Stages 2 & 3

– 16 wells to extend plateau and increase water and gas injection

Intelligent well completions to maximize oil recovery

Agbami Subsea System

Subsea Highlights

•One of the largest flexible subsea systems 

•Design conditions pushing technology limits

•Interface design challenges led to construction success

•Marine vessel breakdowns required creative contingency planning

Agbami FPSOAGBAMI Production CapacityTotal Liquids (B/D) 450,000Oil Rate (BOPD) 250,000Produced Gas (MMscf/D) 450Injection Gas (MMscf/D) 415Gas Lift (MMscf/D) 50Produced Water (BWPD) 250,000Water Injection (BWPD) 450,000

FPSO ParticularsNew build construction 20-year life in field2.15 MM bbl storage capacityOffloading 45,000 bbl/hr1.0 MM bbl approximately every four daysDimensions 317 m 58 m 32 mDisplacement 404,811 tAccommodations 153 POB

Offshore Hookup and Commissioning 

Offshore Highlights

•Offshore work‐hours greater than planned

•Interface management success

•No major technical problems

Simultaneous Operations (SIMOPs)Left to Right: Accommodation Vessels, FPSO, Diving Support Vessel, Riser Installation Vessel

Startup ReliabilityHigher Than Forecast

• Excellent teamwork between commissioning and operations

• Phased startup of nearly 100 systems:January 2008 – FPSO Arrival

July 2008 – First Oil

October 2008 – Gas Injection

February 2009 – Water Injection

• Production rampup continues through 2009

Forecast vs. Actual Production Efficiency

Month

0%

20%

40%

60%

80%

100%

1 2 3 4 5 6 7 8 9 10 12

ForecastForecast

ActualActualProduction Efficiency

16

Subsea Design, Installation and Lessons

Learned

Base Case Concept

17

M

TT

T

T

M

T T

TT

T

M

T

T T

M

TT

T T

Infield UmbilicalsWater InjectionSystem (Blue)

ProductionSystem (Red)

Piggy-Back Production

System (Red)

Gas InjectionSystem (Green)

Main Umbilical

DrillCenter

Piggy-Back Drill Center

18

Subsea Equipment – SEV Scope5x2 – 10 ksi Horizontal Trees

(17 Production, 9 Water Injection & 6 Gas Injection)

4 Slot Manifolds(Suction Pile Mounted)

• MUX Controls (Top Sides & Subsea)

• Flowline & Jumper Connectors• Electrical & Hydraulic Flying Leads• IWOCS & Tooling

Loading Trees onto Installation Vessel – Onne Port

Tree Being Lowered into Water, Drilling Rig in Background

Tree On Wellhead

22

5 Subsea Lessons Learned spanning a wide range of topics

1. Retrievable Flowmeter Issues

2. Flexible Flowline & Jumper Kits

3. Flow Assurance & Insulation

4. Cathodic Protection of Trees

5. Tree Installation

23

Lesson #1:Retrievable Flowmeter issues

– Issue: Unexpectedly complex, expensive, long‐lead ROV tooling.

Flowmeter with ROV retrievable instrumentation

24

Lesson #1:Retrievable Flowmeter issues

Ensure all parties understand scope of Company-required items prior to award.

– Issue: Unexpectedly complex, expensive, long‐lead ROV tooling.

Flowmeter with ROV retrievable instrumentation

25

Lesson #2:Interface Definition in FEEDDirect Connect Flowlines

– Cross‐Contract Situation:

• FMC to provide Flowline & Jumper end Kits

• Installation contractor  to provide Flexible flowlines / Jumpers and installation responsibility

– Issue: Installation engineering details arriving late in fabrication program

– Analysis:

• 2nd End Flexible Flowline Connectors have integral padeyesresulting in one‐piece elbow/padeye forging

• Swivels required for all Jumpers and Flowlines 2nd end connections.

26

Early, continuing communication between contractors to identify and avoid costly and time consuming interface clashes.

Lesson #2:Interface Definition in FEEDDirect Connect Flowlines

– Cross‐Contract Situation:

• FMC to provide Flowline & Jumper end Kits

• SIC to provide Flexible flowlines / Jumpers and installation responsibility

– Issue: Installation engineering details arriving late in fabrication program

– Analysis:

• 2nd End Flexible Flowline & Jumpers have integral padeyesresulting in one‐piece elbow/padeye forging

• Additional swivels required for all Jumpers and Flowlines

27

Lesson #3:Flow assurance and Insulation

• Ten Hour target cool‐down period specified, 2” thick insulation calculated for trees.

– Issue:More conservative assumptions were introduced late.

– Result: Insulation thickness increased to 3” and less aggressive cool‐down period of 7 hrs agreed.

28

Lesson #3:Flow assurance and Insulation

• Ten Hour target cool‐down period specified, normally require 2” thick insulation for trees.

– Issue:More conservative assumptions were introduced late.

– Result: Insulation thickness increased to 3” and less aggressive cool‐down period of 7 hrs agreed.

Assumptions for thermal analysis should be agreed in early phase to avoid potential delays and costs.

29

Lesson #4:Cathodic Protection – Trees

• Insufficient Cathodic protection on trees

– Issue: Calculations for cathodic protection of trees initially did not include for subsea well.  

– Solution:

• Additional anodes added in‐country to several trees already shipped, as well as all trees still in Houston.

• FMC determined tree funnel could be removed in‐country, anodes welded to funnel & re‐attached.

30

Lesson #4:Cathodic Protection – Trees

• Cathodic risk to sensitive tree sensors

– Issue: Initial calculations for cathodic protection of trees initially did not include for subsea well.  

– Solution:

• Additional anodes added in‐country to several trees already shipped, as well as all trees still in Houston.

• FMC determined tree funnel could be removed in‐country, anodes welded to funnel & re‐attached.

Assumptions for cathodic protection analysis agreed in early project phase to avoid potential delays and costs.

31

Lesson #5:Tree Installation

• Planned Tree deployment from A‐frame from edge of drilling rig.  

– Issue: Concerns raised as to safety on rig and offshore transfer of trees to rig. 

– Better solution: Trees loaded out onto surface support vessel and installed from same vessel offshore from wire rope.

32

Lesson #5:Tree Installation

• Planned Tree deployment from A‐frame from edge of drilling rig.  

– Issue: Concerns raised as to safety on rig and offshore transfer of trees to rig. 

– Better solution: Trees loaded out onto surface support vessel and installed from same vessel offshore from wire rope.

Careful consideration of safety issues in conjunction with alternatives can save costs as well as lowering risks!

Thank You!