Oil Field Project Marks the Future of Service and Operator Collaborations

Feb 13, 2020

A Case study: Baker Hughes and the Oil Field Alliance

An innovative “risk and reward” service and mining operator collaboration involving Baker Hughes has revived a mature oilfield off the coast of Malaysia.

A joint project between international energy technology services provider Baker Hughes and the operator of a field offshore field in Malaysia has set a precedent for future mature field revivals.

Since work began at the oil field in 2013, production has doubled. There has also been an 85 per cent increase in expected ultimate recovery (EUR) in the past six years through reserves addition.

The secret to the collaboration’s success is a multi-faceted approach involving the application of advanced technology, innovative workflows, focused execution and a unique operator-service company alliance with far-reaching resources.

“The project has been highly successful,” says Prabhat Agrawal, development manager of Alliance, oilfield services, Baker Hughes. “We have extended the field’s economic life by 20 years and doubled production rates. We’re expecting to increase production substantially in the near future.

“The revitalisation project has involved reservoir management, additional drilling, application of new facilities and technological innovation that has made a significant impact on the viability of the field.”

 Technology with ingenuity
When the two sides came together on the project, the field needed revitalisation badly. After operating for 27 years, its production rate had declined significantly. With no pressure maintenance, complex faulted reservoirs, ageing facilities and a high gas-to-oil ratio (GOR), the field appeared unsuitable for future production growth.

Of particular benefit in the revitalisation was the technological expertise of Baker Hughes. The energy technology services provider called on its extensive international technological experience to help design, develop and implement a range of innovative technologies to transform the failing field into a commercially viable project once again.

“In the last six years we have applied 25 new technologies to the revitalisation project,” explains Agrawal. “For example, we developed a low-cost customised liquid foam we applied into wells that were no longer flowing to overcome a shortage of gas lift. Some of these wells started to flow again.”

Other key technologies implemented include the use of reservoir management technology (smart completions) and specifically calibrated data from Nuclear Magnetic Resonance (NMR) imaging. The NMR imaging data identified net pay untapped reserves that led to an incremental increase in production. Reservoir management technology has provided further incremental production increases.

Smart completions incorporate permanent downhole sensors and surface-controlled downhole flow control valves, enabling the operator to monitor, evaluate and manage production (injection) in real time without well interventions. Data from these sensors is transmitted to the surface for local or remote monitoring, giving the operator further insight to reservoirs.

While other operators have employed advanced technologies to increase production ­– with mixed success – the key to this project’s success has been the ability to more directly access technology through the unique service-operator collaboration. This has made acquiring and implementing new technology easier.

“We don’t need to go through a development process for new technologies followed by traditional channels for purchasing these technologies, because bringing new technology is already part of our collaboration deal,” says Agrawal. “Being able to expedite these technologies straight away from the R&D centre or headquarters and apply them directly to the field has been an enormous benefit to the revitalisation efforts and ultimately production.”

Aligning outcomes

In a departure from the traditional service provider/operator agreement, where an operator seeks services with fixed rates without sharing risk and production outcomes, Baker Hughes and the operator agreed each company would participate in the project and be rewarded from the value created.

“The advantage of this is that any development pipeline has to benefit both sides,” Agrawal says. “Therefore, all our combined efforts and expertise are efficiently directed to the goal of increasing production.”

Agrawal says without this collaboration, the field would be producing 10 or 15 per cent of its current production. That figure would likely drop even further in the future.

Integrated project team

Another element that has been essential to the success of the revitalisation scheme is the unique makeup of the project team. Comprising experts from both the service provider and field operator has allowed for smoother workflows and better asset management.

“We have experts from all the different disciplines sitting together on one floor in one office,” says Agrawal. “From our subsurface expert, to drilling, production, facilities and project management – all the expertise we need at any given time is at our fingertips.

“The key benefit of this is we don’t have to go through siloed departments to finish our work; we can access the required knowledge from one location.”

This setup also makes it easier to solve problems and allow teams to improve on the knowledge they gain each year, says Agrawal.

“Approvals for key operational targets are significantly faster, allowing us to move on with short-term or long-term planning with fast execution. The application of new technologies and unique project management has also given us better operational scope.

“For example, in phase three of the project [in planning now], we’re looking to develop reservoirs appraised during phase two execution, while phase two was based on results of phase one drilling. Phase four is being conceptualised based on nearfield and deeper untapped reservoirs targeted in phase three. This sequential unlocking of field potential was not possible before our collaboration and should improve our production even further in the coming years.”

Shared knowledge and resources

Partnering with a service provider gives field operators a wealth of knowledge and resources they wouldn’t have had access to previously.

“The operator has processes and experts in place that can deal with difficult problems and issues, and these work most of the time,” says Agrawal. “But if there are particularly difficult solutions requiring specialist or customised technologies, it’s good to break down those barriers with a specialist service provider that has better access to data, knowledge and technologies.

“For example, Baker Hughes spends a significant amount on R&D, with technology centres in multiple countries. Therefore, our resources are substantial and so is the benefit to the operator.”

Experts from Oil Field Alliance and Baker Hughes will be presenting insights into their unique collaboration in the free conference sessions this year at AOG. For more information or to register free click here.

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