well intervention operations and compliance issues … · 2020. 2. 5. · •workover •well...
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E. AMADASU
Head, Upstream Monitoring and Regulations DivisionDepartment of Petroleum Resources, Nigeria
WELL INTERVENTION OPERATIONS AND COMPLIANCE ISSUES
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DEPARTMENT OF PETROLEUM RESOURCES
Content…..
▪ Role of the DPR
▪ Legal Framework for Intervention Operations in Nigeria
▪ Global dynamics of Industry Developments
▪ Regulatory value proposition for optimal Well Intervention
▪ Intervention Operations In Nigeria
▪ Distribution of Field Performance in Nigeria
▪ Compliance requirements
▪ Challenges
▪ Way forward
▪ Conclusion
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Role of the Department of Petroleum Resources
3
• Regulate and Monitor all oil and gas activities in Nigeria.
• Optimize government revenue earnings and stakeholder value creation
• Ensure efficient recovery and conservation of hydrocarbon resources
• Administer and provide accurate and reliable data for investors, strategic
planning and national development purposes.
• Promote and ensure a safe, secured and environmentally sustainable friendlyoil and gas sector in Nigeria
• Ensure sustainable development of the industry through effective regulationand implementation of government policies on oil and gas matters.
• Ensure efficient development, operation and maintainance of oil and gasfacilities in accordance with the provisions of the law.
• Conservation of the nation’s rich Hydrocarbon Resources.
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Legal framework for Resources Development, Production and Optimization in Nigeria
4
Field Development Plan (FDP)
•Section 37 of Drilling & Production Regulations 1969
•Resources/Reserves
•Wells Count
•Production profiles
•Well Test/ Production Accounting
•New Technologies
•Flow Assurance
•Gas Utilization
•Economics
Rig and Vessel Operations
• Section 34 of Drilling & Production Regulations 1969
• Expires 31st
December
• Not transferable
• Pre Shipment Inspection
• ACS
• Pre License Inspection
Drilling Activity
• Section 32 of Drilling & Production Regulations 1969
• Exploratory, Appraisal & Development drilling
• Sidetrack
• Redrill
• Well Deepening
• Change of Trajectory
Re-entry Operations
•Section 32 of Drilling & Production Regulations 1969
• Initial Completion
•Well Clean Up
• Injectivty Test
•Workover
•Well Stimulation
•Recompletion
Well Abandonment
• Section 35 of Drilling & Production Regulations 1969
• Well Suspension
• Well Plug back
• Well Abandonment
Petroleum act 1969 and amendments and other principal legilsations
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DEPARTMENT OF PETROLEUM RESOURCES
Global Dynamics of Industry Developments
5
Tough Time for a REGULATOR!
Production
Exploration
Capital Investment
Reserve
▪ Imbalance in oil demand and supply ▪ Oil price not dictated by demand/supply alone. ▪ Bust and Boom: cyclical investment pattern.▪ Strong Production growth outside OPEC particularly USA. ▪ Nigeria is a Price Taker! ▪ A Regulators Dilemma?
Regional competition on investing upstream capital exploration and
development spend reinforces the need for robust regulatory framework on
resource optimization
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DEPARTMENT OF PETROLEUM RESOURCES 6
Regulatory Value Proposition for Optimal Well Intervention Practices
• Plug and abandonment rules
• Timeliness of regulatory approvals
• Incentives for self regulation against command and control
• Knowledge and experience sharing among regulators and industry
• Technical effectiveness (Rig Vs Riglessoperation)
• Does the job justify the remaining reserves
• Collaborative efforts among industry players
• Integrity of vessels conversion
• Compliance with standards
• Availability of vessels and equipment's
• Incentivizing R&D investment in production optimization innovation
• Deployment to ensure resources optimization
• Cost efficiency
TechnologyVessel and Equipment
RegulationCost
Efficiency
Commitment by Industry and dynamic regulation by government are critical to optimal intervention practices in oil and gas production and management
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Intervention Operations in Nigeria
7
• Well intervention is a necessary option to optimize resource recovery and acceleraterevenue generation to fund national plans and stakeholder sustainable valueproposition
• Frequency of well intervention during the life of a field depends on numerousvariables including reservoir characteristics, infrastructures and economicconsiderations
• Choice of technique and equipment to be deployed for intervention depends onsubsurface condition which determines the mechanical and economic success of thejob.
• Deepwater fields notably Bonga, Agbami, Erha etc are cutting egde developments
that have leverage on technology developments to enhance production through
efficient well intervention techniques.
▪ There is huge intervention requirement in onshore fields to shore up productionand enhance recovery.
▪ Equipment and vessel integrity and compliance is key to achieving value creationin intervention programs.
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Distribution of fields Performance (1-5KBOPD)
8
-
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
BO
NN
Y N
OR
TH
ISA
N
OK
UB
IE
EJA
ALI
NS
O
OG
HA
RE
FE
EB
UG
HU
EA
ST
AD
IBA
WA
NE
ME
FA
EP
U
Od
eam
a C
ree
k
Uq
uo
Co
nd
en
sate
GIL
LI-G
ILLI
BE
NIK
U
TA
PA
MIN
A
Oru
bir
i
AK
RI
NK
ALI
EG
BE
MA
ER
IEM
U
AB
ITE
YE
KW
ALE
IND
A
OD
UG
RI
BE
LLA
EG
BE
MA
WE
ST
EB
UG
HU
(O
PL
98
)
IZO
MB
E (
OP
L118
)
PIR
IGB
EN
E
MA
LU
Aw
ob
a
Kra
kam
a
CLO
UG
H C
RE
EK
INIM
UT
OR
OG
U
Stu
bb
Cre
ek
JIS
IKE
Eg
bao
ma
AFR
EM
O
Ala
kir
i
OLE
H
KO
RO
AM
A
RO
BE
RT
KIR
I
EW
AN
AFA
M
UG
HE
LLI E
AS
T
AW
AW
A
Ovo
rh
Ota
kik
po
DE
LTA
SO
UT
H
OG
BE
LE
1KOPD - 5KOPD
Frequency of well intervention during the life of a field depends on numerous variables
including reservoir characteristics, infrastructures and economic considerations
Large number of producing fields rely on intervention programmes to accelerate
recovery and enhance performace
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Distribution of Fields Production Performance
9
-
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
5KOPD - 10KOPD
-
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
10kOPD - 20KOPD
- 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00 60,000.00
20KOPD - 50KOPD
-
50,000.00
100,000.00
150,000.00
200,000.00
250,000.00
USAN ERHA AKPO BONGA AGBAMI
>50KOPD
Intervention optimization techniques facilitate production optimization
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Intervention Cost and Duration – Case Study
10
YEAR
WELL A
METHOD DE
PLOYED COMMENTDURATION COST
1 7 days 8 M$ Rig Acid stimulation with rig
2 7 days 9.5 M$ Rig Stimulation with Rig
3 8 days 10 M$ Rig Stimulation with rig
4 8 days 4.5 M$ Vessel Rigless stimulation with V
essel
5 7 days 2.6 m$ Vessel Rigless Stimulation with V
essel
YEAR
WELL B
METHOD D
EPLOYED COMMENTDURATION COST
1 7 days 9 M$ Rig Stimulation with rig
2 8days 9.5 M$ Rig Stimulation with Rig
3 7 days 2.2 M$ Vessel Rigless stimulation with Ve
ssel
From the studies carried out:• Required duration of rig per well – 65 days Required duration of Vessel per well – 68 days• Required cost per well using rig - 70 M$ Required cost of Vessel – 35 M$
ConclusionFor remaining reserves of 6 Mbbls and 16 Mbbls respectively, Cost effective solution developed for managing the PI decline in Wells A and B wells is deployment of OIMR Vessel with significant cost reduction compared to rig operations. Pay out is in about a month.Cost showed a significant capital outlay of 140 M$ (excluding rig mobilization cost)
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Compliance Requirement For Re-entry (Well Intervention) Operations in Nigeria
11
❑ RE-ENTRY PROPOSAL to include:
• Structural maps• Well Correlations• Re-entry plan• Well Schematics• Hydrocarbon Distribution Chart (Saturation Chart, Logs)• Resource accounting (Reserves, production)• Data gathering plan (Press, Zonal Vol., Temp., Formation Isolation)• Valid licensed Rig / Intervention vessel• Re-entry cost and Schedule (Dev. Cost/Operating Cost/Tangibles)
❑ Payment of statutory fees
❑ Re-entry approval prior to actual re-entry
❑ Monitoring of re-entry operations
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Well Intervention Value Addition
12
• Scope of work identified in well intervention includes: well logging,perforating, well cleaning, fishing, fluid displacement, thru tubing sandcontrol, remedial cementing, selective stimulation, thru tubingcompletions artificial lift services, re-entry drilling and surface controlledsubsurface safety valve repairs
• In 2017, estimate of oil gain from the above intervention operations inOffshore is about 20,000 bopd with about 65,000 bopd in other terrain.
• In 2018, estimate of oil gain from the above intervention operations inoffshore increased to 50,000 bopd with about 80,000 bopd in other terrain
• This was achieved with reduced cost, time and production deferment.
• In Quarter 1, 2019, we have licensed 7 Intervention Vessels in Nigeria asagainst 3 and 4 for the previous years
• However, more can be achieved with enhanced engagement with theregulator by the industry
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Key Intervention Challenges in the Nigerian Oil & Gas Industry
• Dwindling Exploration activities reinforces further intervention to recovery
of remaining hydrocarbon
• Erosion of Value assurance to all stakeholders due to high operational cost
• Minimal intervention due to robust FDP
• Growing spate of non-compliance in terms of licensing of intervention
vessels and well intervention operations permit
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▪ Robust Field Development Plan
▪ Smart well Technologies for ease of intervention operations
▪ Timely engagement and effective interface management
▪ Regulatory compliance by industry players
▪ Statutory reporting of Oil and Gas Operations
▪ Automation of regulatory processes to ease business and enhance
reporting and monitoring of intervention operations.
The Way forward
14
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▪ Compliance in Well Re-entry Operations will promote the optimization of
hydrocarbon resources recovery and value proposition to stakeholders
▪ Emerging industry dynamics are reinforcing the importance of well
intervention
▪ Technology is a key enabler to cost efficiency and production optimization.
▪ Regulatory compliance by well intervention vessel operators must be
pursued to ensure hitch free and safe operations
▪ We are committed to optimizing the regulatory environment in Nigeria to
enhance our competitiveness and ensure ease of doing business and
regulatory compliance.
Conclusion
15
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▪ For additional information on the mandate/roles of the DPR and
the legislative instruments & regulatory tools employed by the
Department, please visit the DPR corporate website:
www.dpr.gov.ng
DPR Website
16
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17
Thank you for listening