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Pierce Redevelopment from Start to Finish (almost)
Presenter: Ash Holland
Acknowledgments:- Pierce Team- Pierce Partners
- JX Nippon E&P UK Ltd.- Summit Petroleum Ltd.
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Partners:
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Cautionary Statement
This [presentation, report or speech] contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. Also included as a forward looking statement is our disclosure of reserves, proved oil and gas reserves, proven mining reserves, organic reserves, net reserves and resources. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this [presentation, report or speech], including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this [presentation, report or speech] are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2007 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of [insert date of presentation, report or speech]. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this [presentation, report or speech].
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this [presentation, report or speech] that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
Also in this [presentation, report or speech] we have aggregated our equity position in projects for both direct and indirect interest. For example, we have aggregated our indirect interest in the Pluto project via our 34% shareholding in Woodside Energy Ltd.
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Contents
� Introduction to Pierce
� Complexity
� Development History
� Re-development #2
� Summary
� The Future?
Introduction Development History Strategy WRM New Wells
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Pierce Background
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4
16 E & A Wells
8 Oil Producers
3 Gas Injectors
3 Water Injectors
Field History and Development
� Partners: Shell (operator), Nippon,
Summit
� South Pierce discovered by Ranger in
1975
� North Pierce discovered by BP in
1990
� Production began in 1999 under
Introduction Development History Strategy WRM New Wells
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Pierce Background
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5
� Distal turbidite field
� Twin salt diapirs with dips >70°
� Gas re-injection and Water Injection
� Gas Compression Constraint
� Highly heterogeneous permeability 0.1-400 mD
� STOIIP ~ 450 MMbbls, Np ~100 MMbbls
� GIIP ~ 450Bscf
� Phased Development – Oil first followed by Gas
export
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Pierce Complexity
� High Heterogeneity
� Steeply dipping reservoir
Topographic High
Topographic Low
Sediment Pathway
� Graded Oil
� Areal changes in Oil and
Water chemistry
Introduction Development History Strategy WRM New Wells
N
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Pierce Complexity
Oil-water Contact
� Different theories throughout the field’s history
� Few OWC drilled and vary between 9700 – 10140 ft tvdss
� Pressure and fluid changes observed while drilling across faults
N S N S
Water
Oil
Gas
• Tilted OWC contact schematic • Stepped OWC contact schematic
Introduction Development History Strategy WRM New Wells
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Development
History
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Pierce Field Development Plan
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Initial FDP (1997)
� 6 horizontal oil producers
� 2 Gas injectors
� Gas-Cap expansion drive
� Pressure support from aquifer? Option to install water injection retained
Introduction Development History Strategy WRM New Wells
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Pierce Field Development Plan
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Initial FDP (1997) Water Injection FDP (2005)
� North Pierce pressures ok
� South Pierce pressure support weak
� Reduced from ~4,800 psi in 1999 to ~3000 psi in 2002
� Drilled a horizontal water injector to pair with each producer
Introduction Development History Strategy WRM New Wells
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Redevelopment #1 – Water Injection
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~ 3 out of the 4 wells
+ Successful in re-pressurising South Pierce
+ Successful in reducing GOR decline for 2 years
- Fractured into A1 which resulted in premature lift die-out
Introduction Development History Strategy WRM New Wells
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Redevelopment #2 – GOR again
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Introduction Development History Strategy WRM New Wells
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Redevelopme
nt
#2
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Summary
�Value of Data
� “Threshold” decision
making
�Going Back to Basics
Introduction Development History Strategy WRM New Wells
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Initial Projects
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New producer
North Pierce Appraisal Well
-Tilted vs. Stepped OWC
Introduction Development History Strategy WRM New Wells
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Field Operational Strategy
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From
To
WRM New
Wells
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Wells and Reservoir Management
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� Fixed the Well Test
Separator
� Altered gas re-injection
ratio between North and
South
� Maximise offtake points to
minimise pressure
gradients in the reservoir
� Reduced water injection
� Added an additional Gas
From
To
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Gas Injector
Recompletion of A10 - March 2010
� Enabled a reduction of injection
rate at the other two injectors
� Improved sweep of oil between A1
and A5
� Up-dip pressure support for the A1
well
A10A5
A1A8z
A2y
8
South Pierce
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Results
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Introduction Development History Strategy WRM New Wells
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Results
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Introduction Development History Strategy WRM New Wells
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Locating the Remaining Oil
Development Team started from
scratch
� Collected and put together all the
raw data
� Mainly focussed on OWC’s
� Material Balance
� Static Polygons
� 4D seismic
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N
KEY
E&A WellOil Producer
Water InjectorGas InjectorFault
5x
22z
3z3
A4
A9A3x
A7
A7z
A5A1 A8
zA10 4
5
1
6
B310B2
B4a
3
A2y8
B1
4D Water Sweep Signal
Introduction Development History Strategy WRM New Wells
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LTRO Results
Targets, Risks and
Uncertainties
� Portfolio of targets; each
with a range of recoverable
volumes and associated
risk
�High Case
�Mid Case
�Low Case
NNP
A9
4
5
110
A11
B5
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Pierce Field Development Plan
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Initial FDP (1997) Water Injection FDP (2005) Redevelopment
� Following re-pressurisation and a two year stabilisation the GOR began to rise
� Lowest risk opportunity developed and an appraisal well drilled
� Initiated a proactive operational strategy focussed on optimising GOR
� 1 additional gas injector
� A redevelopment study was initiated which identified
� 3 additional oil producers
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Target #1: B5 New Drill - July 2010
Introduction Development History Strategy WRM New Wells
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Target #1: B5 New Drill - July 2010
Targeting volumes up-dip of
watered out B2 well
KEY
E&A WellOil Producer
Water InjectorGas InjectorFault
6
B3
1
B5
B2B1
5
4
A2y
8z
8
A10z
South Pierce
Introduction Development History Strategy WRM New Wells
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Target #1: B5 Results
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35% initial increase in production
Introduction Development History Strategy WRM New Wells
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Target #2: A11 New Drill
Targeting volumes Down-dip in the saddle & Gas lift installed in Pierce
Introduction Development History Strategy WRM New Wells
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Target #2: A11 Results
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TD at 14,890ft MDKO at 10,300ft MD
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Target #3: NNP Development
5x
North Pierce
A3xA9
A4
A6
A7
3z3
2
2z
MDS
Targeting undeveloped part of the
field
Introduction Development History Strategy WRM New Wells
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Summary
� Value of well testing
� “Threshold” decision
making
� Back to basics
methodology
� Good results from 1st wave
of redevelopment wells
� 2nd wave of LTRO
opportunities currently
Introduction Development History Strategy WRM New Wells
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Acknowledgements
� The authors would like to acknowledge the Pierce
partners Summit Petroleum Limited and JX Nippon
Exploration and Production (U.K.) Limited for their
permission to publish.
� The authors would like to thank the Pierce team for
their input and hard work during this project.
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