Technology is a key enabler for Shell, Matthias Bichsel, director of the supermajor’s Projects & Technology business, told a two-day briefing at the Rijswijk technology centre in The Hague this spring. Meg Chesshyre joined the tour of the company’s iScope, well drilling simulator and test rig and checked out the company’s latest thinking in key areas such as well technology, enhanced oil recovery and floating LNG production.
Shell has a technology DNA going back well over 100 years,’ according to Matthias Bichsel . The company lays claim to being a top spender in R&D, with an expenditure of over $1 billion in 2010 (split 60% upstream and 40% downstream), although the competitors are catching up. It also accesses technology from oilfield service companies and others.
Since an additional 1% of recovery globally from existing fields would add about three years worth of production, enhanced oil recovery is very high on the corporate agenda, he noted. ‘But there is no generic target for EOR,’ explained Bichsel. ‘We are really doing it field by field by field.’ Shell has recently entered into two 30-year EOR contracts in Malaysia. Overall it has 10 EOR projects in full or early operation and about 20+ pilots and trials globally from special waterfloods in the Gulf of Mexico to chemical EOR in the Far East. The Projects & Technology business was set up in 2009 to bring together engineering and R&D from the upstream and downstream, gas and power sectors to create ‘a project delivery engine’. One example of synergy is cross-flow on acids between researchers in biofuels and in drilling technology. Biofuels use reversible acids, which can be re-used. The same principle is now being adapted for use in well stimulation. Another area is EOR bringing together the subsurface reservoir engineers and geologists with the chemical researchers to create ‘the right chemical cocktails’. Bichsel pointed out that Shell has this year for the first time become a company that produces more gas than oil – 51-52% by the end of 2012. ‘We see gas as a destination fuel, not just a transitional fuel to a renewable future.’
Shell currently has about 60 offshore projects under construction in the design or the starting phase, said Bichsel, adding: ‘Earlier this year our CEO Peter Voser indicated that we will grow our production from about 3 million boe/d today to 4 million boe/d by 2017/18. It is an aggressive target, but it is underpinned by the resources.’
Bichsel stressed the importance of worker welfare, noting that that the Pearl gas-to-liquids project in Qatar, now ramping up to full production, had been a massive undertaking involving over 50,000 people at peak. A special village was built next door to the Ras Laffan industrial site, housing about 30+ nationalities, with special food and ‘Olympic Games’. Indian cricket stars were invited over to talk to the workers and there were special screenings for watching matches.
At the end of the day this effort impacted positively on productivity and safety. At the beginning of the Pearl project it was calculated that based on the number of manhours there would be about 15 fatalities. The project manager said this was simply not acceptable. Shell put a huge effort into driving safety into the organisation using worker welfare. There were unfortunately fatalities, but only two. Worker welfare is now being built into many of Shell’s projects.
Drilling & completions
The scale of Shell’s drilling programme was described by executive vice president wells Peter Sharpe. ‘Shell spends at the moment about $8 billion per annum on its drilling and completions programme globally, and that’s set to grow to around $15 billion per annum in the next five years,’ he explained.
‘Over a five-year period we will be investing some $60 billion in new wells.’ He added a caveat, however. ‘This plan to grow is very much conditional on us having the competent people to ensure that we can actually grow safely.’ Sharpe noted that there had been a huge increase in deepwater activity in recent years. There were 20 ultra-deepwater rigs in 2005, there are 100 today and by 2014 there will be 140.
He saw a continuous improvement in personal safety. In his operation last year there were 200 injuries, half of which were hand and finger injuries. Shell has been looking at glove technology this year and there have been some dramatic breakthroughs here.
He made the point that ‘what’s really keeping us safe in my part of the industry is the professionalism, the mindset, the competence, the drills that our people do ensuring that every one of them has the feeling, as we say in Shell, “of chronic unease”; that they never feel confident that actually everything is under control.’
He said that Shell, subject to final regulatory approvals, is planning a July start for a drilling progamme offshore Alaska in the Beaufort and Chukchi Seas, using the Shell-owned drillship Kulluk and the Noble Discoverer. Shell has spent over $4 billion preparing for the campaign, working with Norwegian research institute Sintef. Preparations include a dedicated well capping vessel in situ.
Bernd van den Brekel, global learning manager wells, explained Shell’s rigorous training programme, including the recent addition of an advanced well control course. The company developed the course in close consultation with the International Association of Drilling Contractors (IADC) and the International Well Control Forum (IWCF), and it is now in the final stages of achieving accreditation. The IWCF administers the end of course exam. Shell site supervisors must take the course every two years. To support the training, Shell’s Rijswijk learning facilities offer two simulators, one for drilling and the other – hailed by Shell as the first of its kind – for well intervention scenarios.
Shell’s capping capabilities were outlined by Jan van Wijk, the company’s principal technical expert, well control equipment. A Shell-owned 135/8in dual ram capping stack, designed with a 10,000psi working pressure for use in water depths up to 10,000ft, was built last year and is now being stored and maintained in Aberdeen. A second Shell-owned capping system with a similar design is in preparation with a 15,000psi working pressure. Being built by Cameron and scheduled for delivery by end-July, this stack will be stored and maintained in Singapore for use in Southeast Asia. It has been calculated that either of these capping systems could be flown anywhere in the world in 10 days.
Shell is a founder member of the Marine Well Containment Company, set up post Macondo to provide a cap and containment response in the Gulf of Mexico (OE November 2010). It is also operator for the Subsea Well Response Project, based at Shell’s offices in Stavanger, Norway, which again, post Macondo, was established on the recommendation of the International Association of Oil and Gas Producers. The SWRP capping device will be in place next year.
Well safety
Jan Brakel, R&D manager wells, described a number of techniques Shell is developing for making drilling operations safer and more efficient. He said a well control automation system, being developed in conjunction with Noble Drilling and National Oilwell Varco, would be capable of taking over control and ‘make the well safe’ if the driller does not take appropriate action.
Another development is an emergency separation tool, designed to sever any equipment positioned over BOPs when experiencing well control difficulties. ‘Clearing the BOP stack of pipe then allows unrestricted function of the BOP sealing rams,’ explained Brakel. It severs in milliseconds and with very little deformation, and is deployable to subsea depths of 10,000ft. This novel approach involves use of concentric perforator array, reducing net explosive weights by up to 85% – an industry first. It has successfully cut a 91/2in drill collar in trials, and is IP protected.
A third development is a downhole collapsible insert device which, when placed inside the well casing directly above the reservoir, can be activated to buckle the casing so that it blocks upward flow. In a well control emergency, the device is activated by means of an encrypted acoustic signal – either from the drilling rig or a remote location – sent through the casing. Later, the well can be brought back into service after the insert has been milled out.
Improving recovery
Val Brock, Shell’s manager for improved or enhanced oil recovery, declared that the company’s goal was to increase its recovery rate globally by 5% in the next decade using IOR/EOR technologies. The current industry average recovery rate is only a third of the oil in the ground. ‘Historically EOR has been developed onshore, but it is now moving offshore, posing particular challenges because there is less space for equipment,’ said Brock.
Petronas and Shell Malaysia signed two new production sharing contracts for EOR projects offshore Sarawak and Sabah in January which combined represent probably the world’s biggest EOR development opportunities in an offshore environment to date, Brock noted.
Under these PSCs, Shell Malaysia’s upstream companies and partner Petronas will further develop six oil fields in the Baram Delta offshore Sarawak, and three oil fields in the North Sabah development area offshore Sabah, using EOR or other appropriate related technologies. The Baram Delta EOR PSC comprises the Bokor, Bakau, Baram, Baronia, Betty, Fairley Baram, Siwa, Tukau and West Lutong oil fields, while the North Sabah EOR PSC contains the St Joseph, South Furious, SF30 and Barton fields.
The projected increase in the average recovery factor in the Baram Delta and North Sabah fields will be from 36% to 50%. The technology, also employed in the North Sabah fields, could potentially lead to the first field-scale offshore chemical EOR in the world. The technology employed in the North Sabah fields could potentially lead to the world’s first offshore alkaline surfactant polymer EOR project using horizontal wells.
In the North Sea, Shell as a partner with operator BP, is looking at low salinity water flood for Clair Ridge and polymer flood for Schiehallion. It is also looking at CO2 flooding with Maersk offshore Denmark.
Prelude progress
Shell is preparing for the construction start in Korea of its Prelude floating LNG plant, with personnel currently transferring from Paris, where detailed engineering has been carried out. The final investment decision for the project was confirmed a year ago (OE June 2011). Although this is the first FID ever for such a development, it does not necessarily follow that Prelude will be the first FLNG start-up, cautioned Marjan van Loon, VP LNG and gas processing at Shell, adding: ‘We are really aiming at having this right, rather than being the first.’ Start-up is currently anticipated around 2017.
Shell signed a master agreement with the Technip-Samsung Consortium (TSC) in July 2009 to work on the design, construction and installation of multiple floating LNG facilities over a period of up to 15 years based on Shell’s proprietary design.
This was followed by a specific agreement in May last year to proceed with detailed design and construction of a facility for Prelude, which is whollyowned by Shell.
The steel for the wellheads was cut in September last year and Shell hopes to cut the first steel for the11,500t turret in Dubai this month. The Drydocks World yard will build the giant turret, which will be loaded out in six modules, under contract to SBM offshore. Shell has already started recruiting the personnel who will eventually operate the Prelude facility and in that regard has partnerships in place with the Challenger Institute and Curtin University in Perth, Western Australia.
Pointing out that subsequent FLNG facilities will be faster and cheaper to build than this first one, Van Loon said Shell had established a dedicated extra team to capture the learnings from Prelude. A project such as Sunrise, in the Timor Sea, where an FLNG facility is also being considered, could use 90% of the work already done. The rest, the turret and the mooring system, would need to be Sunrise-specific. Shell has a 27% stake in Sunrise, which is operated by Woodside Petroleum. OE
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