Halliburton announced today the successful completion of three wells in the Deep Water Gulf of Mexico utilizing Halliburton’s Enhanced Single-Trip Multizone (ESTMZ™) FracPac™ System.
ESTMZ™ downhole tool system enables the operator to stimulate and gravel pack multiple production zones in a single trip. Designed for use in Dee Water and Ultra-Deep Water offshore completions, the ESTMZ™ system allows the highest treating rate with the greatest volume of proppant in the industry.
Halliburton developed the multi-zone completion technology in collaboration with Chevron U.S.A. Inc. The two companies conducted numerous system integration tests and two field trials to prove the technology.
The time savings realized for each of the three Chevron-operated wells completed with the ESTMZ™ system averaged 18 days, equating to approximately $22 million.
“ESTMZ™ system allows more reservoir to be stimulated in a shorter amount of time, thus increasing efficiency, reliability and production, which is key to the success of the Lower Tertiary,” said Ron Shuman, Senior Vice President of Halliburton’s Southern and Gulf of Mexico regions.
“In addition, this system allows us to deliver a very aggressive stimulation with rates up to 45 barrels per minute and volumes greater than 400,000 pounds of 16/30 high strength proppant. We deliver this with weighted frac fluid and 10,000 horsepower per interval for up to five intervals, providing a total cumulative proppant volume of greater than two million pounds per well with one service tool. Having to make multiple runs in and out of the wellbore equates to a large expense for operators. The ‘single trip’ element of this system provides significant time savings with improved reliability and better asset optimization,” Shuman concluded.
Providing wellbore assurance through various critical operations such as wellbore cleanout, completion services, pumping and fluids also contributed to the success of these three wells. This integrated approach in planning and execution mitigated risks while promoting efficiency and providing an optimal conduit for the reservoir to flow.
The proven reliability of Halliburton’s ESTMZ™ tool system and the continual evolution of these smart technologies are critical to the changing landscape in the Gulf of Mexico. To date, Halliburton has successfully deployed nearly 20 ESTMZ™ systems around the globe including the Asia Pacific region.
Robert Drummond, president of Schlumberger North America, (left) talks about his company as Jeremy Aumaugher, south division operations manager, listens to questions about expansion of their business to support clients in the Eagle Ford Shale.
Photo: TOM REEL, San Antonio Express-News / San Antonio Express-NewsBy Vicki Vaughan Updated 12:26 p.m., Thursday, March 8, 2012
Schlumberger, the world’s largest oil-field services company, threw open the doors Wednesday to its new operations plant in southern Bexar County, where it was drawn by proximity to the Eagle Ford Shale.
“This is a big deal for us,” Robert Drummond, president of Schlumberger North America, said as he stood before shiny trucks in a spic-and-span warehouse that’s part of a $19 million investment.
The new facility is a critical addition to Schlumberger’s south division operations, which encompasses the New Mexico, West Texas and South Texas, he said.
Construction of the company facilities, which occupy three sites on Fischer Road near the intersection of Interstate 35 South and Loop 410, began in December 2010, company officials said.
Schlumberger — which is based in Houston, Paris and The Hague, Netherlands — employs almost 400 in the San Antonio area, a total that is likely to grow to 500 employees in the coming months, officials said.
San Antonio’s nearness to the shale has meant that the company hasn’t had a problem recruiting employees, whose work ethic “is excellent,” Drummond said.
The South Bexar facility employs managers, engineers, health and safety employees, equipment operators, maintenance and electronic technicians, and laboratory workers.
Salaries at the operations center range from $25,000 to $85,000 a year, said Jeremy Aumaugher, south division operations manager for pressure pumping. Employees also are eligible for performance bonuses, he said.
However, some employees may work 60 hours a week or more and be away from home for periods of time, Aumaugher said.
The company’s biggest labor needs are for truck drivers, while mechanics and electronic technicians make up another key category, he said.
“We’re in competition, obviously, with others who do the same work as us,” Drummond said. “We want to be the employer of choice in North America, meaning not only (in) compensation but work conditions, facilities and safety environment.”
Schlumberger’s center will handle its customers’ demands for pressure pumping, which is used to enhance the flow of oil and natural gas in hydraulic fracturing. It also will provide cementing services, a process used to surround a well’s casing, or pipe.
Schlumberger’s operations occupy 60 acres. One facility occupies a 35-acre site that includes bays for maintaining, fueling and washing trucks. There’s a 15-acre bulk plant capable of storing 20 million pounds of sand for use in hydraulic fracturing, a cement blending area, a 39,028-square-foot warehouse, a laboratory and a support and training facility on 10 acres.
At a ceremony Wednesday at Schlumberger, Economic Development Foundation Chairman Henry Cisneros said: “This is a great, global company doing important work. The more you can succeed here, it is ‘mission accomplished’ for us.”
As drilling in the Eagle Ford Shale has exploded, a number of oil-field services companies have established a presence in the region, including Houston-based Halliburton Co. and Baker Hughes Inc., Switzerland-based Weatherford International Inc. and Canada-based Sanjel.
In addition, a number of oil production companies drilling in the Eagle Ford Shale have opened offices in San Antonio.
- Eagle Ford construction is booming – San Antonio Express-News (wpvins.wordpress.com)
“The dynamic modeling and reservoir optimization software of SPT Group will complement the existing Schlumberger production software portfolio,” said Tony Bowman, President, Schlumberger Information Solutions (SIS). “In combination with the Petrel* E&P software platform and other SIS technologies, this will enable customers to further optimize production from reservoir performance to processing facilities.”
“This is a great testament to our employees and a remarkable opportunity for the company,” commented Tom Even Mortensen, Chief Executive Officer of SPT Group. He continued, “Combining the skills, abilities, presence and technologies of the two companies will further increase the scale of our activities and enable continued delivery of products and services with the quality and pace the market demands.”
SPT Group Chairman and Altor Partner Reynir Indahl added, “We are proud to have developed a very successful company together with SPT Group management, and believe that Schlumberger will be a great home for SPT and its employees.”
SPT Group, founded in 1971, is headquartered in Norway and employs approximately 280 people in 11 countries worldwide. The company is a leader in dynamic modeling of multiphase flow and reservoir optimization through renowned software products and a global team of professional consultants. SPT Group has invested more than most comparable firms in developing cutting-edge technology. The company’s employees, global presence, close ties to industry research environments, and clear focus on customer needs have been important factors in its success.
- Schlumberger opens base in Bexar (mysanantonio.com)
The vessel will be operating on the Clipper South field in the Southern North Sea. The Island Captain is with this joining Island Commander and Island Patriot as the 3rd well stimulation vessel from IO, with a 4th vessel going into operation in January 2013.
“We are very happy to have made this deal with Halliburton and feel confident that the vessel will perform to the charterers’ expectations,” reads Island Offshore’s statement.
The Island Offshore Group is currently operating a fleet of 17 vessels ranging from Platform Supply vessels, Anchor Handling Vessels, Subsea Construction Vessels to Light Well Intervention Vessels. The group has several vessels under construction.
- Norway: STX OSV Brevik Shipyard Hands Over PSV Island Captain (mb50.wordpress.com)
- Norway: STX OSV Delivers Platform Supply Vessel to Solstad (mb50.wordpress.com)
- Norway: Ulstein Launches New Platform Supply Vessel for Blue Ship Invest (mb50.wordpress.com)
- Baker Hughes Bringing High-End Well Stimulation Vessel to North Sea (mb50.wordpress.com)
(Reuters) – Collapsing natural gas prices have yielded an unexpected boon for North Dakota‘s shale oil bonanza, easing a shortage of fracking crews that had tempered the biggest U.S. oil boom in a generation.
Energy companies in the Bakken shale patch have boosted activity recently thanks to an exceptionally mild winter and an influx of oil workers trained in the specialized tasks required to prepare wells for production, principally the controversial technique of hydraulic fracturing.
State data released this month showed energy companies in January fracked more wells than they drilled for the first time in five months, suggesting oil output could grow even faster than last year’s 35 percent surge as a year-long shortage of workers and equipment finally begins to subside.
As output accelerates, North Dakota should overtake Alaska as the second-largest U.S. producer within months, extending an unexpected oil rush that has already upended the global crude market, clipped U.S. oil imports, and made the state’s economy the fastest-growing in the union.
Six new crews trained in “well completion” — fracking and other work that follows drilling — have moved into North Dakota in the past two months alone, according to the state regulator and industry sources. Back in December, the state was 10 crews short of the number needed to keep up with newly drilled wells.
“Three to four months ago, the operators were begging for fracking crews,” said Monte Besler, who consults companies on fracking jobs in North Dakota’s Bakken shale prospect. Now “companies are calling, asking if we have a well to frack.”
For the last three years, smaller oil companies with thin pockets were forced to wait for two to three months before they could book fracking crews and get oil out of their wells. As more and more wells were drilled, that backlog has grown.
Last year, an average 12 percent of all oil wells were idled in North Dakota. Even so, output in January hit 546,000 barrels per day, doubling in the last two years and pushing the state ahead of California as the country’s third-largest producer.
FEWER WELLS IDLE
Fracking, which unlocks trapped oil by injecting tight shale seams with a slurry of water, sand and chemicals, has drawn fierce protests in some parts of the country, but it has not generated heated opposition in North Dakota.
The number of idle wells waiting to be completed in the state reached a record 908 last June, the result of a new drilling rush and heavy spring floods. Only 733 wells were idle in August as crews caught up, but the figure crept steadily higher until the start of this year.
Now, the industry may be turning a corner in North Dakota, the fastest-growing oil frontier in the world.
“Both rig count and hydraulic fracturing crews are limiting factors. Should they continue to rise together, production will not only increase, it will accelerate,” said Lynn Helms, director of the state Industrial Commission’s Oil and Gas Division.
The tame winter likely played an important role in helping reduce the number of idle wells — those that have been drilled but not yet fracked and prepped for production. That number fell by 11 in January, as oil operations that would normally be slowed by blizzards were able to carry on, experts said.
Residents of the northern Midwest state — accustomed to temperatures as low as minus 40 degrees Fahrenheit (-40 Celsius) in winter and snow piles as high as 107 inches — this year enjoyed the fourth warmest since 1894, according to the National Weather Service.
The milder conditions also helped prevent the usual exodus of warm-weather workers that occurs when blizzards set in.
“Not everyone wants to work in North Dakota in the winter,” Besler said.
The backlog of unfinished wells has also begun to subside because the pace with which new wells are drilled has leveled off. The state hasn’t added new rigs since November.
The latest state data shows oil companies brought 37 new rigs to North Dakota’s in 2011 but have not added more since November. The rig count held steady at 200 in January 2012, although more than 200 new wells were drilled in that period.
SLUMPING NATGAS PRICE PROVIDES RELIEF
North Dakota has gotten a boost from the fall-off in natural gas drilling due to the collapse in prices to 10-year lows. Energy companies such as Chesapeake and Encana have shut existing natural gas wells and cut back on new ones. Last week, the number of rigs drilling for gas in the United States sank to the lowest level in 10 years as major producers slimmed down their gas business, according to data from Houston-based oil services firm Baker Hughes. [ID:nL2E8EG9OY] The fewer gas wells drilled, the less need for skilled fracking crews in the country’s shale gas outposts.
Fracking in oil patches is similar to the process used in gas wells, except for the inherent power of the pumps employed. Crews inject high-pressure water, sand and chemicals to free hydrocarbons trapped in shale rock. So big service firms such as Halliburton, Baker Hughes and Schlumberger are reshuffling crews from shale gas fields to oil prospects in the badlands. “We have moved or are moving about eight crews. Some of those crews are moving as we speak,” Mark McCollum, Halliburton’s chief financial officer, said at an industry summit in February.
Halliburton declined to specify where the crews were moving.
Calgary-based Calfrac moved one crew into the Bakken in late 2011, according to an SEC filing. Privately owned FTS International no longer works in the gas-rich Barnett shale but has set up operations in the Utica, an emerging prospect in Ohio and western Pennsylvania, according to a company representative.
The reallocations come with some efficiency losses. Halliburton had to scale back its 24-hour operations and is still trying to solve logistical problems. “You actually take the crew from one basin and they have to go stay in motels, you have to pay them per diems for a while. And then you have to double up your personnel while you’re training new, locally based crew on the equipment once it is moved,” McCollum said.
At the same time, a shortage of key equipment such as pressure pumps is easing as companies start taking delivery of material ordered months or even years ago.
It takes about 15 such pumps to frack a gas well, and many more for oil wells. The total pressure-pumping capacity in the United States at the end of 2012 will be 19 million horsepower, two-and-a-half times more than in 2009, according to Dan Pickering, analyst with Tudor Holt and Pickering in Houston.
FRACKING AROUND THE NATION
Easing personnel constraints suggest recruiters may be meeting with success in nationwide campaigns to attract workers with specialized knowledge of complex pumps and hazmat trucks — and a willingness to brave harsh conditions.
Even with U.S. unemployment at 8.3 percent, such skilled labor remains in short supply despite salaries from $70,000 to $120,000 a year. In North Dakota, unemployment was just 3.2 percent in January, the lowest rate in the nation.
Fracking crews, much like roughnecks on drilling rigs, clock in 12-hour shifts for two straight weeks before getting a day off. They live in camps far from cities and towns. Jobs are transient — a few weeks at a single location. Most workers divide their time between the California desert, Texas ranchlands and the freezing badlands of the Midwest state.
Companies have scrambled to nab talent, with recruiters scouring far and wide. Military bases have gotten frequent visits, and some companies have hired truckers from Europe.
“There’s definitely a push to look all over for people who have good experience since it takes at least six months to train someone how to use a fracking pump,” said David Vaucher, analyst with IHS Cambridge Energy Research.
(Editing by David Gregorio)
- Pioneer Bets On West Texas Shale Oil To Rival Bakken (mb50.wordpress.com)
- Newfound Billions Of Barrels Of Shale Oil In Newfoundland (mb50.wordpress.com)
- To frack or not to frack: North Dakota’s dilemma (usatoday.com)
The world’s largest oil-field services company is preparing for the boom in shale gas and oil development to spread beyond North America in the coming years, likely heating up in 2013.
Poland is already moving quickly to exploit gas reserves using horizontal drilling and hydraulic fracturing technologies. Many more promising basins have been located in Latin America and the Eastern Hemisphere, and drillers and well completion companies will probably see a major growth in international business related to shale extraction from 2013 and into 2014, a Halliburton executive told industry peers at an analyst event.
“Things are moving quickly, probably a little more quickly than we originally anticipated,” said Tim Probert, president of Halliburton’s strategy and corporate development division. The evolving situation beyond the United States and Canada, he said, promises a “robust outlook for the oil service industry.”
In the past year, Halliburton has discovered “a fairly sizable population” of shale basins and other unconventional oil and gas reserves that could be tapped using new and improving technologies, Probert said at a two-day event sponsored by the investment firm Jefferies.
Halliburton technology teams have been dispatched to do assessments in the Middle East, Latin America, Asia and Europe. The results they are reporting are raising eyebrows with regard to the potential for international business growth.
A total of 150 separate basins have been analyzed so far, Probert noted, and 60 have been assessed in detail. And although market and regulatory conditions will make many of those basins infeasible or impractical for oil and gas development, many more will eventually to opened up to exploration and exploitation, Halliburton predicts.
A more international operating environment will also probably force the industry to adapt new technologies and techniques for hydraulic fracturing, or “fracking,” that cause less concern among environmentalists and regulators, Probert added.
Halliburton is working on techniques that employ “clean” fracking fluids that use chemicals commonly found in the food-processing industry, he said. The company is investing millions of dollars in research in the hopes of creating the “frack of the future,” more environmentally friendly and less controversial fracking techniques, Probert said.
Halliburton also sees growing interest in the Middle East and other major historic oil patches to employ other enhanced extraction technologies aside from fracturing, to arrest future declining output from mature oil fields.
The company maintains that Organization of Petroleum Exporting Countries] producers, in particular, are not investing enough in existing fields. That trend, the company said, will reverse as pressure builds in those nations to keep government revenues from oil and gas production flowing.
The company also sees business in the offshore sector perking up in the coming years. Many new rigs are seen coming online beyond the Gulf of Mexico. East Africa is an especially promising market, Probert said, adding that his company is moving to build the infrastructure in that region that will be necessary to support a robust offshore oil and gas industry there.
“We are more enthusiastic today than we were two quarters ago,” Probert said.
Source: E&E News. E&E News is published by Environment & Energy Publishing. For more news on energy and the environment, visit http://www.eenews.net/
- Halliburton Benefits As Europe Looks For Energy Security (blogs.forbes.com)
- Halliburton CEO: “Phenomenal” shale opportunities outside North America (gcaptain.com)
- East West Petroleum enters into agreement with Halliburton (prnewswire.com)
- Halliburton Profits Jumps 54 Percent Amid U.S. Drilling Boom (alternet.org)
While now facing greater scrutiny from regulators, contractors in the oil-service industry have considerable liability protection to fight the citations and any subsequent fines, legal experts say. They also have enough market muscle to strengthen liability protection in their contracts with oil companies.
Previously, U.S. regulators have held the rig operator responsible for whatever happens under its watch. The operator hired contractors, who perform drilling, seismic or cementing operations and whose contracts protected them from any liability.
That was upended by the Deepwater Horizon mishap in April 2010, which resulted in 11 deaths, the biggest accidental marine oil spill in history, and tens of billions of dollars in costs. BP said blame also falls on Halliburton, which was in charge of cementing the failed well shut, and Transocean, the drilling contractor that owned the Deepwater Horizon rig. U.S. investigations have widely cast the blame among all three companies.
The citations, issued Wednesday, set a precedent for holding contractors at least partially responsible for such accidents, and may increase the contractors’ exposure to civil suits from anyone claiming damages from the spill, analysts said.
The contractors have pledged to fight the accusations. Halliburton said that it is fully protected against penalties and losses from the Deepwater Horizon incident by its contract with BP. Transocean also said it intends to appeal.
However, if the courts determine that the government has the right to issue a citation to oil-service contractors, there is no contract that will protect them from the fine, according to Larry Nettles, an environmental attorney with Vinson & Elkins, a Houston law firm. “In most jurisdictions the courts do not allow indemnification for fines and penalties, because it defeats the purpose,” which is to punish bad behavior, Mr. Nettles said.
Still the industry is expected to bulk up its contracts even more in the wake of the regulators’ action, legal experts say, to get as much liability protection as possible. The contractors currently have considerable bargaining power to win such new concessions from rig operators on contract protection. Relatively high oil prices have led to a shortage of drilling crews and have put oilfield services at a premium, giving the contractors the upper hand in negotiations.
“When oil prices are high and there’s lots of activity, service contractors can drive a very hard bargain,” said Owen Anderson, a professor of law specializing in energy at the University of Oklahoma.
(c) 2011 Dow Jones & Company, Inc.
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- BOEMRE Looking to Expand Oversight to Drilling Contractors
- Oil Firms Face Liability Protection Issues (online.wsj.com)
- BP Contractors Could Face Fines Over Gulf Oil Spill (gcaptain.com)
- BP Contractors Could Face Deepwater Fines (online.wsj.com)
- Serious New Regulatory Risks Arise for Oil Contractors (BP, RIG, HAL, CAM, SLB, BHI, NOV) (247wallst.com)
By Katie Mazerov, contributing editor
In response to heightened industry and regulatory standards, service companies are continuing to introduce innovative technologies to improve the safety and environmental responsibility of solids control and cuttings handling.
Part of Baroid’s FullCircle® cuttings reinjection process, the two-stage hammermill grinds waste and cuttings to a slurry before they are injected into the formation for disposal. FullCircle The cuttings injection service helps eliminate costs and risks of cuttings handling and disposal.
“Solids control and waste management technologies assist the operator in achieving regulatory standards and provide effective mud conditioning for drilling operations,” said Ana Djuric, global environmental advisor for Halliburton’s Baroid business line. “Solids control is regulated for health, safety and environmental (HSE) standards, but the efficiency and throughput of solids control equipment are not directly regulated,” Ms Djuric said. “Indirectly speaking, disposal limits in a given area are what drive solids control efficiency.”
The primary purpose of solids control is drilling fluid conditioning, or removing as much of the unwanted solids as possible from the drilling fluid, she explained. “But the secondary purpose is to achieve regulatory disposal limits through effective waste management such as cuttings dryers and cuttings treatment equipment,” she said. Equipment selection is determined by several variables, including hole volume, available space on the rig and subsequent discharge in the area.
Halliburton’s Honey Comb Base (HCB™) tanks are used for bulk transfer of waste. In an offshore operation, waste is conveyed pneumatically by the SupaVac™ SV400 cuttings collection and pumping system through hoses from the HCB tanks on a rig to tanks or collection pits on a boat to be transferred onshore.
“Solids control equipment assists in environmental compliance by helping the operator remove unwanted solids, rock cuttings and particulate materials from the drilling fluid during operations,” Ms Djuric continued. The wastes can then be treated with secondary recovery or treatment equipment to extract additional fluids from the solids for reuse in drilling operations.
Among the latest advances are Halliburton’s Honey Comb Base (HCB) tanks, which improve the efficiency of handling cuttings for disposal. “By storing cuttings in pneumatic bulk tanks, as opposed to traditional skips, crane lifts are virtually eliminated in regards to cuttings handling,” explained Greg Abbott, manager, Solids Control Systems for Halliburton. “At the same time, bulk tank storage significantly reduces the chances of spilling oil-contaminated drill cuttings while transporting them from the drilling locations to disposal locations.”
Better thermal systems and methods of bulk handling also have been developed. “In many ways, it’s the chemistry that is the environmental driver rather than the mechanical processes associated with solids control and waste management,” Ms Djuric noted.
Achieving optimal environmental standards is complicated by the myriad regulations that vary by country, state or province and even county. Offshore regulations are more standardized than onshore, but agencies such as STRONGER in the United States are working to provide a more harmonized approach to drilling waste regulations and practices. “In offshore regions where regulations are lacking, North Sea or Gulf of Mexico standards commonly apply,” Ms Djuric said. Offshore, the primary environmental concern is to protect aquatic species from the generally monitored parameters of hydrocarbons, chemical toxicity, degradation and, in some areas, bioaccumulation.
“On land, Louisiana 29B or Alberta’s Directive 50 are commonly used as a reference point. But harmonization is very difficult to achieve on land due to the wide diversity of ecosystems,” Ms Djuric explained. Depending on the location, onshore environmental compliance can range from protection of vegetation, agriculture and soil quality, to safeguarding water quality and associated aquatic species, or drinking water conservation. Metals, salts, including chlorides, hydrocarbons and chemical toxicity are the parameters typically monitored.
Thermo–mechanical cuttings cleaner is used to process oil-contaminated drilling waste. Oil and water are separated from the cuttings by mechanical and thermal treatment. Recovered oil can be re-used to fuel the machine, enabling a more sustainable process.
Even as more technologies emerge into the marketplace, managing and navigating through the regulatory environment is becoming a significant issue. “The biggest challenge will be educating regulatory bodies around the world as more technologies come into the market that allow for reuse and recycling of drilling fluids and drill cuttings,” Mr Abbott said.
In some areas, for example, wastewater must be treated and disposed of as waste even after it has been purified. “We have technologies in place for water treatment that can treat water to drinking standards, but that technology cannot be used in certain areas because a particular region’s definition of ‘beneficial reuse’ is not fully established, or because the definition of ‘waste’ is so inflexible that recycling or reuse of waste is not permitted,” Ms Djuric noted.
HCB and SupaVac are Halliburton’s trademarks, and FullCircle is Halliburton’s registered trademark.
- High Performance Drilling Fluid (bensaif.com)