1. CONNE US
2013 | Volume 4 | Number 1
The Baker Hughes Magazine
Well of the Future
Equion builds ambitious,
sustainable business plan
on nontraditional relationship
A Solid Bond
Deploying the right
tools and technologies
to ensure well integrity
A Total Solution
Small independents have
less overhead, expert network
with total well solution package
3. With most of its licenses set to expire
progressively through 2020, Equion is
challenged to improve on an operational
plateau for wells being drilled in the Colombia
foothills. With Baker Hughes, it is seeking a
step change in time and cost performance.
| 5www.bakerhughes.com
4. Speaking at a technology leadership conference last year, Martin
Craighead, chairman and CEO of Baker Hughes, said the lines
between the players in the energy industry are blurring. He said
that, going forward, success will require nontraditional “balanced”
partnerships between operators and service companies. Together,
they must learn to apply technology better and faster in a trusting,
collaborative way.
“Primary responsibility for technology development shifted decades
ago to service companies, and as these technologies—and the
problems they are intended to solve—have become more exotic, and
as the financial and other resource requirements increase, there is a
necessity for nontraditional business relationships,” Craighead said.
The speech resonated with Carlos Vargas, vice president of Drilling
and Completions for Equion Energia Ltd., a joint venture company
between Colombia’s state-owned oil company Ecopetrol and
Talisman Energy, a Canada-based exploration and production
company. Equion acquired all of BP’s oil and gas exploration,
production, and transportation holdings in Colombia in January
2011. Among the assets were interests in five producing fields in
the Casanare foothills of eastern Colombia that, for more than 20
years, have been among the world’s most challenging drilling and
completion environments.
Equion’s full-time workforce is fewer than 500 people, primarily
former BP employees. Without the resources of a supermajor, Vargas
and other leaders at Equion knew that reinventing the company and
meeting its financial objectives were daunting challenges.
“When I took this position as vice president, I knew I had to do
something different to improve our performance,” Vargas says. “It’s
very expensive to operate in the foothills, and we are no longer
a company that can support the capital expenditures needed to
develop these fields. We need a breakthrough in our performance by
improving the way that we are drilling and completing our wells.
“Martin Craighead was right. The only way to overcome the
challenges that we have in the industry today is to work differently
by working together.”
A plan for the future
With a limited amount of time to recover hydrocarbon reserves
in some of its contract areas, and with operations reaching a
performance plateau with current technology, knowledge, and
experience, late last year Equion embarked on an ambitious,
sustainable plan it calls “The Well of the Future.”
Equion’s ultimate goal is to make the wells 30% more efficient in
time and in cost. The firm chose Baker Hughes as its technology
partner to complement its own capabilities to innovate and optimize
the processes needed to construct and complete the challenging
foothills wells.
With so much relying on The Well of the Future concept, choosing
a committed partner with world-class technical resources was
paramount, says Alexander Valdivieso, Well of the Future project
manager for Equion.
> Among the Well of the Future team are (from left) Jairo
Peñuela, Jose Luis Gómez, Jae Song, Wilson Carreño,
Mario Pacione, Alexander Valdivieso, Pedro García,
Graeme Symons, Luis Carlos Alzate, Cesar López, and
Diego Ramirez.
6 |
5. “Baker Hughes is a leader in drilling
technology with substantial foothills
experience with Equion and other
operators in the area,” Valdivieso
explains. “We have a very good
relationship in terms of delivery,
technology, and trust built over many,
many years. We wanted a partner who
could align with our goals and realize
our sense of urgency to develop the
project, and we have that visible
commitment from all levels within
Baker Hughes.”
“At Baker Hughes, we pride ourselves
on helping our customers solve
their most difficult challenges,” says
Adam Anderson, president, Latin
America. “Further, we always look
for opportunities to collaborate with
customers in innovative ways. In this
case, a critical customer came to us
with an open mind and asked us
to help them achieve breakthrough
performance in drilling some of
the world’s most difficult wells. It
was a natural fit for Baker Hughes
and Equion to work together on
the Well of the Future project, and
having partners from our customers
such as Carlos and Alexander will
make this a tremendous success
for both our companies.”
Embedded since December 2012
in Equion’s Bogota headquarters,
a dedicated team of Baker Hughes
and Equion employees with
“multidisciplinary expertise and an
interdisciplinary attitude” is 100%
focused on designing a plan that will
deliver significant and sustainable
value versus the current wells.
“Equion has a challenging deliverable
that will be operationally complex and
financially demanding to achieve,”
says Edgar Peláez, Baker Hughes vice
president of business development
for Latin America and executive
cosponsor of The Well of the Future.
“Well construction in the Casanare
piedemont [foothills] currently requires
substantial investment in both time
and money, leading to a low return
on investment for shareholders and
compromising business sustainability.
“The Well of the Future team’s goal
is to analyze 20 years of history, then
canvas the world’s ‘best practices’
to see what can be applied through
different processes, equipment, and
technologies to do things 30% faster
and with 30% lower total cost through
innovative well designs that can be
extrapolated to all the future wells
in the hydrocarbon-rich Piedemonte
license area and beyond. With some
of these wells taking 300 days to drill
and complete at costs up to $100
million, a 30% savings in time and
cost is significant.”
Reaching these operational goals will
take a global network of high-level
technical and management support, as
well as a steering committee of upper
management from both companies to
govern the project.
“The Well of the Future team is really
a global network of experts on each
of the relevant technologies that may
provide a solution,” Peláez says. “We
don’t know where the next solution
might come from, but we’re going to
promote creativity and connectivity
through both of our organizations.”
The complexity of the Well
of the Future project can be
readily appreciated by looking
at just one aspect of the well
construction process:
running the 11 ¾-in.
casing and not getting it
to bottom as planned.
Among the questions that might
arise are:
„„ Why can we not rotate the casing to get
past the obstruction?
„„ Is the well profile creating too much
torque and drag?
„„ Are we exceeding the torque limit of the
casing couplings?
„„ Are the casing couplings hanging up?
„„ Is the hole being cleaned effectively?
„„ Has the hole collapsed? Why?
„„ Have we got the mud rheology right?
„„ Have we got the mud weight right?
„„ Was the kickoff point too deep?
„„ What about the hole geometry itself?
„„ What are the geomechanical stresses at
the stuck point?
„„ Have we reactivated a fault?
„„ Are there ledges?
„„ Do we have interbedded formations?
It’s clear to see from this one example
that the task at hand is not a simple one,
and though some of these questions occur
every day on every well in the world, what’s
different in the Colombian foothills is that
they can all happen on every well.
| 7www.bakerhughes.com
6. A mountain of challenges
The 17,000 ft (5182 m) of dipped and
folded geology between the drilling rig and
the producing zones beneath the Andean
foothills is nothing short of hellish.
The complexities of the formations are
numerous: high tectonic stresses and activity;
multiple faults; geological uncertainty; strong
natural tendencies; lost-circulation zones;
very hard and abrasive formations; and
deep, low-porosity reservoirs. Taken together,
it means low rates of penetration (ROP),
challenging tool and equipment reliability,
an abundance of nonproductive time (NPT),
and huge costs in rig time.
Poor seismic quality
Almost every obstacle calls for a contingency
plan, but the reliability and quality of seismic
interpretation in the foothills are poor,
according to Olga Carvajal, the Baker Hughes
geomechanics expert assigned to the project.
“High-dip angles and successive faults
make the acquisition of good seismic data
extremely difficult,” Carvajal says. “Lateral
variation—another important factor that
increases the geological uncertainty—is so
high that instead of these wells being called
development wells, we need to think of
them as exploratory wells.”
High NPT
The last seven wells that Equion has drilled
in the Piedemonte have averaged 16% NPT.
Invisible lost time was even higher at 25%.
“Almost all the NPT is related to the
complexity of the geology and the stability
of the wellbore,” explains Jose Luis Gómez,
senior drilling engineer for Equion. “Packoff
events. Stuck bottomhole assemblies.
Mud losses in the 26-in. and 18 ½-in. hole
sections. Difficulty running casing to bottom.
Many of these costly NPT issues occur
in the upper and middle hole sections
long before we even get near the
reservoir. In the reservoir itself we also
have opportunities to reduce invisible
lost time such as improving drilling
efficiency. And, because we have to
use a large, powerful rig to get to the
deeper reservoir sections, rig down time
becomes very expensive, as well.”
Fluid inconsistencies
“Oil-based muds have been the preferred
choice over the last 20 years for drilling
across these challenging intervals, but
even after all these years of experience,
we are still facing many problems that
have not being resolved,” explains
Jairo Peñuela, fluids advisor for Baker
Hughes. “Borehole instability along the
intermediate sections is one example.
There is a clear opportunity to reduce costs
by improving the drilling mud system,
especially considering the development of
water-based technologies in recent years.”
Drilling difficulties
As a senior directional drilling advisor
for Baker Hughes, Graeme Symons has
worked in some of the most challenging
drilling environments on earth, including
Colombia. “I don’t think there’s any
place exactly like this,” Symons says.
“Obviously, from a directional drilling
standpoint, the geologic complexity is our
challenge. On top of that, the hardness of
the rock in this area makes it an extremely
difficult place to drill, so drilling dynamics
and tool reliability become issues.”
“Sandstones in the overburden and the
reservoir are very hard and abrasive and
they are normally drilled at a very low
ROP—1.5 to 4 ft [.45 to 1.2 m] per hour,”
explains Pedro Garcia, Baker Hughes senior
drilling optimization engineer assigned to
the Well of the Future team. “Finding the
best combination of drilling system and
drill bit to improve the ROP performance
in the sandstones will have great impact in
reducing the time and cost of the wells.”
“If these wells are split into sections, we
see similarities to wells in Bolivia, Algeria,
and Kazakhstan,” Symons adds. “So, we
will be able to pull experience from those
locations and bring it into this project.
Equion is expecting us to go worldwide and
Right Team
+
Analysis
+
Out-of-the-box Ideas
+
Innovative Engineering
+
Cutting-edge Technology
+
Management
Commitment and Support
=
The Well of the
Future
8 |
7. FRT8 FRT8
The 17,000 ft (5182 m)
of dipped and folded
geology between
the drilling rig and the
producing zones beneath
the Andean foothills is
nothing short of hellish.
> While the Well of the Future project focuses primarily on reducing the time and cost to drill, making adjustments in casing design could help alleviate
the problems of hole instability and severe mud losses, while a multilateral well design could make a huge difference in improving productivity.
The Present The Future
identify places where we have done similar
work and incorporate that experience.”
Completions questions
“Due to the complexity of the reservoir
itself, and to the uncertainties attached to
the stress regime that exists in the reservoir
rock, the final completion method and
its design needs to be flexible enough to
perform within a range of possibilities,”
adds Juan Carlos Alzate, senior geologist
for Equion. “We never know until the
reservoir is actually being drilled whether
the wellbore has intersected a section
with large fractures, natural fractures,
drilling-induced fractures, no fractures,
low porosity, or a combination of all of
these. We have to have contingency plans
in place to fracture or not to fracture the
reservoir to increase production prospects.
“The one thing we do know for certain
about all of these challenges,” Alzate
concludes, “is that they need to be well
understood from an interdisciplinary point of
view before we drill the first well.”
| 9www.bakerhughes.com
8. Interdisciplinary solutions
Traditional well operations typically follow
a sequential pattern. The drilling team
generally focuses on getting the well to total
depth as fast as possible before it’s handed
over to the team running completions and
puting the well on production.
While this approach is usually sufficient for
designing “normal” wells, the Well of the
Future team quickly realized that a total
interdisciplinary approach was in order to
maximize innovation, synergy, and value.
“Going forward, all disciplines will work
together on each other’s technical needs
and challenges,” says Mario Pacione,
Well of the Future project manager for
Baker Hughes. “A typical example of
this is the interrelationship between
geomechanics, directional drilling, and
fluids to obtain the best hole quality
possible, especially in a stressed
environment like the Andean foothills.”
“This holistic approach is vital due to the
multitude of interlinked challenges,” Peñuela
adds. “For example, due to the reactive
shales, it is necessary to use an oil-based
mud system to reduce shale instability. But
logging-while-drilling tools work better
in water-based systems. Oil-based mud is
also more expensive and, in the event of
a lost-circulation event, even more costly.
Counter to that, oil-based mud is better able
to combat the effects of abrasive formations
on drilling tools. So, there always exists
this conflicting scenario where one solution
creates another problem.”
Before drilling begins in 2014, these are
the issues the team will be grappling with
to reach the best combination of systems,
parameters, and procedures to accentuate
the positives and minimize the negative
impacts of every procedural decision.
“We are going to pick apart the way that
wells were drilled in the past and put every
equipment choice and every process step
under the microscope and collectively ask
‘why was it done this way?’ and, ‘what if
we do it this way?’” Valdivieso says. “We
will be applying a continuous improvement
technique called DMAIC [define, measure,
analyze, improve, control], which will guide
our engineering approach. It will lead us to
define each problem, determine its impact,
work out the causes, and determine the best
solutions for every problem; then learn from
their implementation and feed findings back
into the learning loop.”
And every step of the process is team driven.
“The team is divided into task force groups,
putting together people who have related
skills,” Valdivieso explains. “We work from
the bottom up, and when an approval of the
project managers is required for a decision,
we meet together—everybody as a team—
and we make the decision to proceed to the
next step of the planning process. At the end
of every stage of the planning process, the
sponsors and the steering committee will
receive a report, and then that governing
body will give approval to continue to the
next gate. That is a clear goal—having a
process that facilitates our decisions.”
“This is an exciting and nonconventional
project for Baker Hughes,” concludes Ramón
Reyes, business development manager for
Baker Hughes. “We are looking at 20 years
of history and helping to project the next
20 years for Equion. It is not often that a
service company is invited to be a part of
the conceptualization and the vision of such
a project. We are not here to sell products
and services. We are here to understand the
business of the future.”
“The only way to over-
come the challenges that
we have in the industry
today is to work differently
by working together.”
Carlos Vargas
vice president,
Drilling and Completions, Equion
PhotoscourtesyofEquionEnergia
10 |
9. 2nd
Colombia’s ranking in the world as an exporter of cut flowers, after the
Netherlands, shipping more than USD 1 billion in blooms annually
500 million tons
Amount of flowers Colombia exported to the U.S. for Valentine’s Day in 2013
300 km
(186 miles)
Distance the national bird of Colombia, the Andean condor, can fly in one day
2.4 billion
Barrels of proven oil reserves (January 2013)
944,000 Barrels per day of oil production in 2012
56%
Area of Colombia covered by natural forest
55,000
Number of species of plants indigenous to Colombia
(15% of the world’s existing species)
1,870
Species of birds indigenous to Colombia
(20% of the world’s total bird species)
2nd
Colombia’s ranking in the world for most species of butterflies, roughly 3,000
3rd
Colombia’s ranking in the world for Spanish-speaking population
6th
FIFA world ranking as of April 2013
46 million
Population of Colombia, second largest
in South America after Brazil
5700 m
(18,700 ft)
Height of Pico Cristobal Colon,
Colombia’s tallest mountain peak
100
Percentage of Colombian coffee a
product must consist of to obtain a
license to use the Juan Valdez trademark
560,000
Number of people employed in Colombia’s
coffee industry
Sources: Embassy of Colombia, Washington,
D.C.; www.cia.gov; World Intellectual
Property Organization
Colombia by the Numbers
| 11www.bakerhughes.com
