Innovation of Coal Seam Gas Well-Construction Process in Australia:
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A presentation I delivered in Tianjin, China at the SPE international conference in 2012. The paper titled: Innovation of Coal Seam Gas Well-Construction Process in Australia: Lessons Learned, Successful Practices, Areas of Improvement.
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Innovation of Coal Seam Gas Well-Construction Process in Australia:
- 1. SPE-156930-PP Innovation of Coal Seam Gas Well-Construction Process in Australia: Lessons Learned, Successful Practices, Areas of Improvement Thomas Bennett
- 2. Map of Surat and Bowen Basins
- 3. Overview • Fit for purpose rigs • Standardization of well designs and equipment • Vendor alignment and incentivized performance • Problems associated with innovation •Well design evolution and the need to optimize gas recovery • The importance of being a learning organization
- 4. Successful Practices Vertical Commingled well SIS well type
- 5. Rigs
- 7. Vendor Alignment Drilling Contractor: Performance Drilling Rig Name: PD Rig-01 Well Name: AEW-1 Target Well Times (Spud to Release): AFE Time (hours) 280 DWOP Time (hours) 235 BIC Time (hours) 210 Incentive Rate ($/hr) 600 Average POB 7 Shifts / day 2 NB: Bonus payble to each crewmember is an estimate assuming a constant POB. The final amount will be depend on the total CREW PERFORMANCE INCENTIVE POSTER Arrow Energy has established an performance incentive scheme to recognize the performance of Arrow's contractor personnel working on the well site. The total payment available under this scheme is dependant on: - HSE performance (no incidents and number of safety observations - Well Quality (linked to criteria on the Well Performance Poster) - Days/hours ahead of target time (AFE / DWOP / BIC) The graphs below show the expected bonus payout, assuming all HSE and Well Quality criteria are met, versus the actual number of days (from spud to rig release) required to drill the specified well. $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 Totalbonuspayabletocrews Days on Well (Spud to Release) Total Bonus Payable to Crew Performance DrillingWell Name: PD Rig-01 AEW-1 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 Totalbonuspayabletocrews Days on Well (Spud to Release) Bonus Payable to Each Crewmember per day on POB Performance DrillingWell Name: PD Rig-01 AEW-1 0 200 400 600 800 1000 1200 1400 0 100 200 300 400 500 600 Depth(m) Time (Hours) Depth vs. Time AFE Actual Rig Estimate
- 8. Trials •Problems associated with innovation •Difficulties with implementation in short time frames •Trials may fail
- 9. Well Design Traditional single well spacing Example pad drilling spacing
- 11. Conclusion
Editor's Notes
- 1 Welcome and thankyou for taking the time to join me for my presentation: Innovation of Coal Seam Gas Well-Construction Process in Australia: Lessons Learned, Successful Practices, Areas of Improvement
- 2 I would like to start by telling you a little about Arrow Energy. Arrow is a 50/50 joint venture company owned by Royal Dutch Shell and a subsidiary of PetroChina (CNPC). Arrow Energy’s activities cover a broad spectrum of Coal Seam Gas activities ranging from exploration to production, transportation and electricity generation. Arrow Energy currently produces gas from fields in the Surat Basin in south east Queensland and the Bowen Basin in central Queensland. With about 600 production wells across these fields. This presentation will hopefully give you a better understanding of where we currently are and how we plan to move forward
- 3. Innovation will be a key requirement for Arrow Energy to succeed in the CSG business in Australia. Innovation in the basis of well design, and the technical challenges associated with driving continuous improvement, will become increasingly important as a lever to drive improvement in CSG in Australia. Many innovations have occurred over the last two decades since the first CSG producing well was drilled in 1988 in Queensland. These successes will now need to be supplemented by a further step-change in performance to satisfy the needs of an LNG export scheme. I will cover the following major topics The need for fit for purpose rigs Standardization of well designs and equipment Vendor alignment and incentivized performance Problems associated with innovation Well design evolution And lastly The importance of being a learning organization.
- 4 Successful Practices and current well designs As you have already seen Arrow Energy’s portfolio is divided between the Surat and Bowen Basins. The Surat Basin is more permeable and produces more gas and therefore water. The Bowen Basin has lower permeability making gas and water production harder requiring more innovative well designs. Arrow Energy’s current production well designs can be broken down into two classifications, vertical and horizontal. Vertical production wells drilled in the Surat Basin are commingled with up to 22 seams being under reamed and screened out with pre-slotted liner hanger and external-casing packers. These have been successful in the past, producing large amounts of gas. Horizontal production wells, Surface to Inseam wells are drilled horizontally and intersect a vertical well. Arrow Energy began drilling SIS wells in 2001 with the first production SIS in 2003. The advantage of the SIS well design is that the same production methodology used by single vertical well can be used to dewater the entire lateral. This is carried out by a down hole progressive cavity pump. Water is pumped out through the tubing lowering the water head to cause the methane to desorb from the surface of the coal. I will now move onto the 6 major areas of improvement
- 5. The need for fit for purpose rigs which meet well design criteria and well safety requirements. Previously, wells have been designed around the available rig capacity instead of contracting the correct rig based on well design. This leads to the use of rigs which are not large enough to drill wells to API standards, this includes the hole sizes and the range of casing. As Arrow Energy moves forward, given the larger economies of scale available, it will indeed have the work available to source the appropriate rigs required to construct API compliant wells which was not possible in the past. Well Control Historically the only barrier utilized was the primary barrier in conjunction with a diverter. The primary barrier was a near water KCL brine used to avoid formation damage while still providing a light overbalance. From a reputation and safety standpoint well-control has become the standard across the industry. DEEDI the government body responsible for over seeing CSG drilling has aligned to the API regulation to make it mandatory for all CSG drilling operations to have at least an annular blow out preventers. There are currently no industry standards relating to the arrangement of well-control equipment, how much redundancy is needed based. Current CSG rig substructure height and equipment inventory limit the options.
- 6. Standardization of well designs and equipment Arrow has previously used API 5LB Line Pipe as the casing of choice. This was originally chosen as a supply of affordable OTCG casing was not available in Australia. Line pipe is more commonly used on the surface. The casing is pressure tested and regarded as fit-for-purpose for CSG wells. This initial saving forced the use of irregular sized pipe which, although inexpensive, required custom products to be manufactured including under reamers, screens, and packers. As casing sizes and designs become aligned to oil and gas standards we will have the ability to use more off the shelf equipment. As the standards for well designs improve we must still maintain the low cost, high volume drilling that makes CSG economically viable. The ability to change casing requirements is directly related to the capacity of the rigs, these two go hand in hand
- 7. Vendor alignment which includes incentivized performance to meet company targets will be essential to meet our company goals. The graph on the bottom right shows an example of this financial incentive. Working with Vendors on Drilling the Well on Paper and After Action Reviews has already began to show improvements in drilling performance. By talking with the rig crew we can discuss the drilling operation in detail, and start thinking about performance before we start drilling. The Time Depth curve on the top left shows the variation in expected time between the Plan, AFE, and the Crew.
- 8. Problems associated with innovation and difficulties of implementation in short time frames. This including the need to try concepts and be willing to accept that sometimes the trials will fail as part of the learning process. Technology trials have an inherent level of risk as there is no guarantee they will provide the results required in the short time frame available. There are many factors which contribute to the success of a well. Problems associated with innovation and difficulties of implementation in short time frames are expected. The need to try concepts and be willing to accept failure as part of the learning process is required. Trials will therefore need to be commissioned in order to reduce the risk of a concept as much as reasonably practicable prior to moving into development phase. As Arrow Energy approaches its Final Investment Decision we will need to accept that the final well design may not be decided on and well trials may continue into the delivery stages. The learnings we will be able to gain from trialing well design will be key to future successes.
- 9. Well design evolution and the need to optimize gas recovery. Pad Drilling (Surat Basin) The majority of Arrow Energy’s coal seams have Total Vertical Depths of less than 900 m and as shallow as 200 m. These shallow depths create a problem when planning well spacing for gas drainage. The optimum spacing required for vertical wells is between 700 and 1200 meters. The traditional single well spacing is shown on the left. To minimize this impact and cost it is possible to achieve the same gas drainage area by drilling many wells from a single surface location as shown on the right. These wells do not need to be complicated directional wells Laterals Wells (Bowen Basin) To reduce the Unit Technical Costs of these wells and improving safety and minimizing surface locations, there will be a need to trial new well design configurations. This includes removing the vertical from the SIS and increasing inseam length.
- 10. The importance of being a learning organization. Training and education will play a large role in the future of drilling in Australia. Arrow Energy is able to utilize Shell’s distance learning package to bring drilling supervisors and engineers up to international oil and gas standards. In addition to the formal classes Arrow Energy has hired experienced coaches to drive individual performance and on the job development. This training will improve supervision and planning and reducing the potential for costly mistakes.
- 11. The Australian CSG industry is transitioning from exploration to designing and executing viable economic field development. The industry is expected to experience rapid growth over the next few years. These increases in productivity will not be possible if current operations are scaled up, innovation of the well construction process will need to be implemented. Much of the early success will likely be obtained from the transfer of benchmark practices, where relevant, from the more mature global oil and gas industry. However, given the lower cost margins and economics of CSG, this knowledge transfer will need to be coupled with innovative application and new approaches.
- 12. I would like to thank Arrow Energy CNPC Shell IADC SPE Questions?