IIWR The 3 Years Journey Towards Excellence in Well Intervention€¦ · In 2015, well intervention...

Malay sia Petroleum Management; Shahril Mokhtar ©Petroliam Nasional Berhad (PETRONAS) 2019 1

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IIWR – The 3 Years Journey Towards Excellence in Well Intervention

16th to 18th April 2019, Aberdeen

Shahril Mokhtar Head of Completions Resource & Development Management Malaysia Petroleum Management, Upstream

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• Custodian of petroleum resources

• Regulator, enabler and shaper of the local O&G industry

• Responsible to manage and steer the overall E&P activities in Malaysia

• Promote exploration investments

• Facilitate the development and production activities

• Protecting national interest

• Optimization of Malaysia E&P assets including wells performance

• Management of all E&P companies operating in Malaysia

• Over 100 PSCs

• 6 RSCs

• 25 international operating companies (OC)

Malaysia Petroleum Management (MPM)

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Post IIWR Higher efficiency

86% uptime

Higher success rate 88% barrel adding

activities

Lower UEC 65% reduction

Agenda Prior IIWR

Low efficiency

65% uptime

Low success rate 60% restoration

/enhancement

High UEC $12 to $14/bbl

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What Is IIWR Contract? An integrated provision that leverages on risk sharing and solution based mechanism to drive operational efficiency and improve success rate in order to aid operators in improving PE/IWR economics viability

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Efficiency is defined as below:

𝑻𝒐𝒕𝒂𝒍 𝒉𝒐𝒖𝒓𝒔 𝒘𝒐𝒓𝒌𝒆𝒅 𝒐𝒏 𝒘𝒆𝒍𝒍𝑻𝒐𝒕𝒂𝒍 𝒉𝒐𝒖𝒓𝒔 𝒐𝒇𝒇𝒔𝒉𝒐𝒓𝒆 %

• Total hours worked on well - hours the resources are run to restore or enhance the well

• Total hours offshore - hours from mobilization to demobilization

• Success rate definition is based on either one of the following after work has been executed:

• The idle well is restored and put on production or;

• The production rate increases on an existing flowing well

This success rate definition is also going through an evolution stage where the ultimate definition will be purely based on: 𝑺𝒖𝒄𝒄𝒆𝒔𝒔 = 𝑷𝒐𝒔𝒕 𝑼𝑬𝑪𝑷𝒓𝒆 𝑼𝑬𝑪 % < 𝟏


Strategy Enhancement

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• Strategy in 2013

• #OTC-26555-MS

Execution Enhancement

LEAN Well Intervention (CORAL LEAN

WIn)

Operating Model

Fit For Purpose Cost and

Performance

WPB and Contract ACV Management

Total Wells Management

Critical Candidate Selection

Efficiency and Success Rate

Driven Contracts

Integrated execution

Nationwide Idle Wells

Management

Increase restoration activities

SMART partnership

Combined approval

Monitor intervention

utilization rate

Subsurface/surface collaboration

Well decommissioning

Enforce PPGUA requirement

Control of OPEX on Wellhead Maintenance

• Enhanced in 2015


MPM RM Two Prong Initiative

LEAN Well Intervention

(CORAL LEAN WIn)

Operating Model

Fit For Purpose Cost and

Performance

WPB and Contract ACV Management

Total Wells Management

Critical Candidate Selection

Efficiency and Success Rate

Driven Contracts

Integrated execution

Strategy Enhancement

Integrated Idle Wells

Restoration (IIWR)

• Improve the success rate to at least 85%

• Improve the operational efficiency to at least 85%

• Deliver a production gain factor of 12 i.e. total of 12 + B KBD

• Deliver more production while maintaining the cost factor similar to 2014 which was +100.

• An industry based integration model that promotes clear collaboration via risk sharing mechanism to deliver the above results

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• SPE-186938-MS Driving Efficiency in Idle Wells Restoration through Risk Sharing Integrated Operations

• SPE-186883-MS Sustaining the Barrels - Making Well Intervention More Affordable


Impact of IIWR on Well Intervention

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• Increased in activities - 22 Projects, 10 PACS • Cumulative additional barrels – 75% KBD • Improved efficiency from 60% to 86% • Improved success rate from 65% to 88% • Increased gain base by 75%/year • Maintaining cost at circa $250 mil/year

• Allow NT application, replication and reinstatement • Improved average UEC by 65% • Established Integrated Framework as Business As

Usual (BAU) beyond 2019 under new Integrated Well Services (IWS) contract

2016 • 1 PAC (EQ) • 1 Project (Well Test) • With CORAL LEAN

WIn

2017 • 3 PACs (EQ, Hess,

Shell) • 3 Projects

• EQ PE/IWR

• Hess Well Start Up

• Shell Well Integrity

2018 • 10 PACs (PCSB,EQ, Shell,

Petrofac, Murphy, Repsol, Vestigo, Exxon, ROC, SEP)

• 13 Projects

• 2 Decomm • 8 PE/IWR • 3 P&A

2019 - IIWR • 4 PACs (Shell, ROC, EQ,

Exxon) • 5 Projects

• 3 PE/IWR

• 1 Decomm • 1 P&A

2019 – New Contract IWS • All other operators (5 years) • Major Projects

• Repsol WO • Shell subsea works

• PCSB decomm/WO • Vestigo PE/IWR • SEP PE/IWR • Overall decomm • Overall WO

• Overall PE/IWR

PE/IWR

+ Well Integrity +Well Start Up +CTD Subsurface

+Decomm + P&A and WO + Subsea


Case History A – First in Malaysia Subsea Intervention

HSE = Zero incidents

Cost savings/avoidance = 60%

Work scope completion = 100% - all 3 wells stimulated

PIF =

Work efficiency = 86% ( 34 work days/40 days campaign time)

Success rate = 100% (3 out 3 wells restored)

End State Target Solution Proposed by

Service Provider

To safely intervene and stimulate 3 subsea wells and improve Productivity Improvement Index (PIF) at a cost of $20 Mil

Stimulate using an integrated vessel based subsea modular injection skid via the production choke at a cost of $8 mil.

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Case History B – Subsea Decomm


Cost savings/avoidance = 30%

Work scope completion = 75% (3 out 4 wells)

Idle strings decomm = 3 vs 4 strings

Work efficiency = 97% (100 work days/103 days campaign time)

Success rate = 80% (3 wells decomm, 1 well with flow target dropped)

End State Target Solution Proposed by Service Provider To fully decomm 4 subsea wells with total service cost of $ 12 Mil

Integrated services including PWC with total service cost of $ 8 mil

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Missing flow

target below

the LCP

Flow target was

backed off and

hanging by two

threads

Missing flow target from

bottom of LCP after retrieval

to surface. Successfully

fished out the flow target

using 5” magnet

Flow target

retrieved

with LCP

SPE-193980-MS

Malaysia's First Subsea

Development Well Plug and

Abandonment


Case History C – Dry Tree Decomm


Cost savings = 25%

Work scope completion = 20% (1 out 5 wells)

Wells decomm = 1 out 5


Success rate = 30% (1 well decomm, 1 partial)

End State Target Solution Proposed by Service Provider To fully decomm 5 dry tree wells with a total cost of $15 mil using HWU

Integrated solutions with HWU, vessel, surface and downhole services with total cost of $11 mil

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Case History D – P&A for Infill Drilling


Cost savings = 25%

Work scope completion = 88%

Wells P&A = 5 out of 5


Success rate = 88% (4 wells, 1 well partial)

End State Target Solution Proposed by

Service Provider To P&A existing reservoirs and prepare 5 wells for sidetrack prior to drilling rig arrival at a cost of $10

mil

Integrated solutions with HWU, vessel, surface and downhole services with total cost of $7.5 mil

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Impact of IIWR on Well Intervention

Tangible Value Creation

• 30% cost savings • Production gain improvement by 75% • UEC improvement by 65%

Intangible Value Creation

• Promote industry collaboration • Established integrated framework and

performance base procurement strategy • Simpler procurement process

HSE

• 8 Joint MPM-PAC-Service Company HSE Visits

• > 400K manhours

• 1 FAC

New Technology

• First subsea intervention • First subsea decomm • Amplemann • Perf, wash and cement

• CT Catanery • Cement packer

Various Scope

• PE/IWR • Well integrity • CTD • Workover

• Well start up • P&A for Infill • Decomm

Knowledge Management

• 5 SPE papers (APOGCE, ATCE) • 1 keynote presentation (OWI,

Aberdeen) • Global industry awareness

• SKILL • Upstream Collaboration • Joint subsea training

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Impact on Production Gain

• The higher the success rate, the lower the cost is, the higher the gain is

• Improved UEC from $12 to $14/bbl by 65%

• End result: Delivered additional 75% gain and sustain a healthy activity level at a better economical level

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Average IIWR Efficiency and Success Rate by PAC

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Average IIWR Efficiency and Success Rate by Scope

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Enhance TWM Process Enhance TWM process and include surface scope to sustain

production Ongoing

Summary

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Project background

Case for change

In 2015, well intervention activities started to drop due to OPEX being reduced. This resulted in lower production gain. Production enhancement and restoration works were inefficient (65%) with low success rate (60%).

Objective

To increase level of activities within the acceptable economic limits, realise up to 36 KBD gain and minimum 85% efficiency and success rate of PE/IWR works.

How? By improving:

• Efficiency and success rate via IIWR contract – 22 projects, 10 PACs, 2 Service Companies

• Production sustainability via Total Wells Management (TWM)

• Cost optimization via CORAL LEAN Well Intervention

75% additional gain realized

Result as of end 2018

Continue with IIWR via IWS contract Maintain risk sharing mechanism, solutions driven and KPI

based contract to sustain efficiency and success rate

BAU of CORAL 2.0 LEAN WIn Uphold the 3 pillars established through CORAL LEAN Well

Intervention to sustain cost

Since 2017

Mid 2019

86% and 88% efficiency and success rate achieved respectively

30% cost savings from decommissionin, well start up and P&A

How To Sustain Beyond IIWR


Conclusion 04

INDUSTRY DEMANDS

• Adapt and sustain! • NO BOX thinking! • Risk sharing

collaboration! • Change ways to get

different results!

Continuous collaboration between PETRONAS, Operating Companies and Service providers can provide value to the various initiatives and the focus areas of industry intervention activities

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IIWR References

• OTC-26555-MS Pushing the Limit of Idle Well Management - A Nationwide Industry Approach (MPM)

• SPE-186938-MS Driving Efficiency in Idle Wells Restoration through Risk Sharing Integrated Operations (MPM)

• SPE-186883-MS Sustaining the Barrels - Making Well Intervention More Affordable (MPM)

• SPE-193980-MS Malaysia's First Subsea Development Well Plug and Abandonment (Shell)

• SPE-191657-MS - Accessing New Pay Intervals in the Tubing-Casing Annulus Above Top Packer with Cement Packer Technology, S Field, Peninsular Malaysia (EnQuest – MPM – Hal)

• 2 more papers upcoming in ATCE, Calgary (Full coverage of 3 years IIWR) and Subsea Well Intervention Symposium (Full coverage on First Subsea Intervention)


Thank you

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