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2017 Award Nomination Title of Innovation: Wells Materials Design & Performance enhancement

Nominee(s) Pedro Rincon Flores – Petroleum Development Oman Nasser Behlani - Petroleum Development Oman Dr Janardhan Rao Saithala - Petroleum Development Oman Dr Manoj Gonuguntla - Petroleum Development Oman Hubaishi Mohammed - Petroleum Development Oman Dr Cheng Khoo – Petroleum Development Oman

Category: Materials Design

Dates of Innovation Development: (from [January, 2014] to [October, 2016])

Web site: www.pdo.com

Summary Description:

Oil and gas companies need to innovate to maintain competitive edge. The challenges for materials application in Petroleum Development Oman (PDO) move up several degrees owing to high concentration of hydrogen sulphide (H2S), extremely high chloride levels, high pressures and temperatures all the way into uncharted territory. Due to the potential high severity consequences of any loss of containment incident, it is vital to ensure that facilities are designs are in compliance with a ‘no leak’ policy. This “goal zero” target requires a robust design and that represents a challenge for the material selection and corrosion management discipline. Traditionally, downhole material selection was based on vendor recommendations and limited material performance data. In addition the primary data inputs used for concept selection of major oil & gas projects are inadequate for accurate downhole material selection and design. Therefore conservatism is applied to the design to ensure equipment integrity and safety

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resulting in over specification and over design with associated cost impact on well completion materials. An innovative approach was used to conduct comprehensive material compliance evaluation of Gas wells across petroleum development oman (PDO) assets. The approach is a well by well assessment reviewing material suitability for past, current and future conditions for all the well related components. A pragmatic approach has been used to define operating envelopes for downhole materials through systematic and comprehensive material performance evaluation.

The recommended changes as part of this study showed savings of more than 500mln$ in

Capital Expenditure (CAPEX) savings over next five years for PDO and country of oman.

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1. What is the innovation?

Integration of real time data from various non –integrated data bases to optimize materials selection for oil & gas wells. This involves data analytics and integration of big data from various data bases distributed across various functions (well engineering, production technology, production chemistry, petrophysics, process engineering, reservoir souring prediction tool and materials & corrosion) to develop materials design tool(MDT). In addition materials field performance and laboratory testing data is also linked to define operating boundaries of materials with no clear limits and developed a standalone specification for subsurface material selection, more comprehensive and detailed than existing international standards.

Figure 1 Materials design tool

2. How does the innovation work?

The innovative approach is applied in four stages to achieve cost effective materials & design

and to ensure long term asset integrity.

Figure 2 Four key components in materials design tool

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A. Design input focus:

Challenging established engineering practices to achieve clear definition of the expected process and operating conditions during design have been fundamental to identify the most cost appropriate materials for projects. A standardized design approach in the past has resulted in perceived significant over-conservatism leading to increase of capital expenditure (CAPEX) in many projects. For instance, common practices of using flange maximum rated pressure as design pressure, or standard definitions of design temperature, lead to over specification of material type grade and required wall thickness. This approach of proactive review has led to significant cost avoidance / reduction in more than 30 large to medium sized projects.

B. Expanding material application limits / standardization:

The applications of the materials used by PDO and Shell have been reviewed critically. A pragmatic approach, using well documented field experience in combination with comprehensive qualification testing programmes, has allowed PDO to expand the application envelope of several materials at levels above international standards and other operators’ experience. The success of increasing the operating envelope of key metallic materials has had a significant impact in the overall projects CAPEX and delivery, impacting indirectly the country and shareholders expenditure.

C. Subsurface focus:

A proactive engagement between well engineering, production technology and MCI has revealed opportunities for unforeseen significant cost reduction that will positively impact PDO performance in the next coming year. The actions included: a) Developed a specification for material selection of subsurface equipment and components which is first of its kind in PDO/ Shell. This specification focused on the PDO environment and experience providing a less conservative approach than the group standards and the unsafe and incomplete information included in the international standards. Materials selection for well equipment used to be based largely on unassured vendor recommendations, but this new standard enables a consistent approach to meet PDO requirements. It also allows an assurance activity to be applied. b) An innovative approach is being used to conduct comprehensive material compliance evaluation across PDO assets. The study is a well by well assessment reviewing material suitability for past, current and future conditions for all the well related components. A pragmatic approach has been used to define operating envelopes for downhole materials through systematic and comprehensive material performance evaluation. The methodology addresses the discrepancy between laboratory test results and field experience, and defines a practical approach to ensure cost effective decisions and safe operations for both existing wells and new well designs. The outcome of these studies is having significant impact in extending the operating service life of the existing wells as well to identify the areas to achieve the

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objective of realizing signification cost saving for the wells to be completed in the future.

D. Continuous improvement on quality of supplied materials:

Issues with material quality have been identified as one of the main contributing factors to recent integrity failures in major projects across the oil and gas industry. At the same time, the simplification of the controls during fabrication, the use of international standards following vendors’ experiences and the application of modular approach are elements that can result in significant quick saving for projects, but could also contribute to reduced quality. Strategy, that applies more rigorous controls and requirements, has to be implemented within a cost reduction environment. To achieve a balance between improving quality and cost reduction the following strategic actions have been implemented: a) Maximize development of local manufacturer to enhance in country value b) More manufacturing surveillance of CRA components c) detailed assessment of vendor package and development of functional specification, d) Simplification of company requirements e) Implementation of risk & criticality procedure to determine surveillance and intervention level

With the above outlined approach the materials design was successfully established in PDO and was peer reviewed & vetted by internal & external specialists. In addition, expanding application limits of materials such as 13 CRM, 316L, DSS, and alloy 825, would have impact on about 30 ongoing projects.

3. Describe the corrosion problem or technological gap that sparked the development of the

innovation?

Yes there are technological gaps and limitations with the data availability for comprehensive assessment and cost effective material selection in mildly sour environment. An example of the work is detailed in terms of qualifying 13Cr modified (13CRM) material used for production tubing in gas production wells. The challenges with 13CRM material application are listed below

Limited or no field proven data was available for 13CRM tubing for various load conditions and environments experienced by a well completion in sour conditions.

Manufacturer’s advice is too conservative and frequent change in material application limits and in some cases not applicable in specific field conditions.

13CRM material (< 1.5% Mo) is not recommended for use in the presence of H2S (even 0 ppm) yet PDO is using successfully for past 10 years in H2S service.

No material limits in ISO 15156 for 13CRMproduction tubing.

Published laboratory testing results are inconsistent.

Laboratory testing is too conservative in some cases and leading to over conservatism in materials design increasing the projects CAPEX.

How does the innovation improve upon existing methods/technologies to address this

corrosion problem or provide a new solution to bridge the technology gap?

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For the challenges mentioned in previous sections, it was clear that the standard well completion design and selection process using 13CRM production tubing would not achieve the required technical requirements for material selection. However there are more than 200 wells in PDO using 13CRM successfully as production tubing material. To address the non –compliance with relevant industry standards, vendor recommendation, against proven field experience the innovative approach described above was applied to develop new solution and extend the material operating limits to bridge the technology gap. 4. Has the innovation been tested in the laboratory or in the field? If so, please describe any

tests or field demonstrations and the results that support the capability and feasibility of the

innovation.

Yes laboratory testing was conducted under the below test conditions given in Table 2. Identification of the operating window of a 13Cr4Ni1Mo alloy, 110 ksi SMYS (758 Mpa). A comprehensive test program with artificial brine showed Sulfide Stress Cracking (SSC) susceptibility is limiting the application window of the material more than Stress Corrosion Cracking (SCC) and pitting. SSC was found at as low as 2.5 mbar pp H2S with 20 bar CO2, 290 g/L NaCL at 65-25°C.

Laboratory testing data

The field surveillance program includes a comprehensive monitoring plan in 20 H2S producer wells completed with 13Cr4Ni1Mo. These tubing surveillance efforts are directed at

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performance verifications of the tubing production to analyses in conjunction with testing data. The programme monitored the critical process variables that affect integrity of the modified 13Cr material for at least 20 wells in the presence of H2S environment. The continuous exposure and the surveillance of critical process data such as Fluid bottom hole and well head pressure and temperature and periodical H2S and chloride level and pH/CO2 have been recorded and verified for at least 4 years by now. In addition to that, short term to long term shut-in conditions was recorded in 8 wells. The shut-in time range from two weeks to two years.

Field data evaluation

Some of the main observations from the study are given below and in Figure 3, but more details

of the work will be presented in NACE 2017.

1. 13Cr4Ni1Mo martensitic stainless steel is resistant to stress corrosion cracking, pitting and crevice corrosion in an environment with as much as 10 mbar pp H2S, 20 bar ppCO2, with 175,000 mg/L chlorides at a temperature of 120°C.

2. Field experience using a conservative monitoring and validation approach to establish

actual operation conditions indicates some tolerance to operate 13Cr4Ni1Mo with traces of H2S in environment with high temperature during normal operation and lower chloride and lower stress during shut in conditions.

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Figure 3 Results showing cracking in Laboratory tests

5. How can the innovation be incorporated into existing corrosion prevention and control

activities and how does it benefit the industry/industries it serves (i.e., does it provide a cost

and/or time savings; improve an inspection, testing, or data collection process; help to

extend the service life of assets or corrosion-control systems, etc.)?

By applying this innovative approach in materials & design of oil & gas projects the discrepancy between laboratory test results and field experience can be minimized, and defines a practical approach to ensure cost effective decisions and safe operations for both existing operating wells and new well designs. The outcome of this approach is having significant impact in extending the operating service life of the existing wells as well to identify the areas to achieve the objective of realizing signification cost saving for the wells to be completed in the future. For eg the innovation will help to define the operating envelope and update the standards like ISO 15156 - 3 and extend the application of 13CRM production tubing material to mildly sour environments which can result in significant cost savings together with the hybrid approach (dual completion) can save more than 500mln $ and life extension of Oman gas wells. 6. Is the innovation commercially available?

No, but the approach will be published and presented in NACE 2016 conference with the title of the paper “Application of the Operating Window of 13Cr4Ni1Mo 110 ksi Well Tubular in a Mild Sour Gas Environment”.

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If yes, how long has it been utilized? If not, what is the next step in making the innovation

commercially available?

The next step in making the innovation commercially available is to incorporate in ISO standards and company specific standards to make the 13Cr modified grades operating envelope suitable for mild sour environments. What are the challenges, if any, that may affect further development or use of this innovation

and how could they be overcome?

The well completion system has to be designed fully compatible for the initial reservoir conditions and also for the changing reservoir conditions during the well life cycle. On some occasions during the concept stage the data available is limited and the decisions based cannot be over conservative and in the low oil price environment projects will not be viable. The way to overcome is through the use of MDT developed in this study to conduct a comprehensive review of metallurgy in the existing wells and incorporate for future designs with updated reservoir data. Also the usage of MDT during metallurgy selection process will avoid over conservative assumptions and hence over design saving millions across many Oil & gas projects. 7. Are there any patents related to this work? If yes, please provide the patent title, number,

and inventor.

No