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New technology = new oil.

Ten billion barrels of unrecoverable North Slope crude may now be tapped by new, less expensive drilling techniques like coiled tubing.

With no more megaprojects in the hopper to help slow the tide of declining crude production at Prudhoe Bay, industry has turned its eyes toward efficient and less expensive ways of squeezing more black gold from the nation's largest oilfield.

Field operators point to the innovative use of coiled tubing as a little known but rapidly evolving technology that could revolutionize drilling operations at Prudhoe Bay, while substantially increasing the amount of oil that can be recovered from the reservoir over the long haul.

There's no doubt the last of the mammoth investments at Prudhoe Bay, the $1.6-billion GHX gas-handling project, has performed well above expectations since the first stage came on line in the fall of 1990.

That's because GHX can recycle huge volumes of reservoir gas that impede oil recovery. The project has provided incremental bursts in crude yields and kept the field from lapsing into steep decline. It also has added 800 million barrels of recoverable oil and perhaps years to the field's productive life.

But even with the benefit of GHX, as well as other so-called Enhanced Oil Recovery (EOR) projects, crude output from the Prudhoe Bay reservoir has dropped from a daily peak of 1.6 million barrels in 1988 to the current rate of just over 1 million barrels a day.

So with the cost of doing business on the rise and oil production in a natural and irreversible decline, producers conclude another GHX-type project at Prudhoe Bay just wouldn't pay off in the long run.

Nonetheless, there remains a huge and inviting target -- perhaps 10 billion barrels of crude that can't be extracted with current technologies. But it will require innovative drilling techniques to reach the many elusive pockets of oil contained within the Prudhoe Bay reservoir.

TIMELY COILED TUBING

Such well-known technological advancements as horizontal and sidetrack drilling have reduced costs and enabled producers to capture more hydrocarbons from Prudhoe Bay's shrinking oil column. More recently, an experimental drilling program using stainless steel coiled tubing is getting a lot of attention on the North Slope these days.

"I think there are a lot of things we are going to see in the next two years in terms of technology and innovation with the use of coiled tubing," declares Jim Weeks, senior vice president in charge of Arco Alaska's operations at Prudhoe Bay.

Oil companies actually started using coiled tubing on the North Slope back in the early 1980s as an economical way to rejuvenate aging wells that produced excessive amounts of natural gas at the expense of the more valuable oil.

As an oil column narrows, natural gas that lies above the oil zone begins to creep into the well bore through perforations intended to drain the oil. To correct the problem, cement is pumped into the well casing and over the perforations, sealing the old drain holes. The well is then reperforated at a new producing interval.

Operators found that it was less expensive to insert flexible tubing into the old well than rigid sections of pipe, which required the use of an expensive drilling rig. The tubing could simply be uncoiled and inserted directly into the well casing.

More recently, the technology of coiled tubing has taken a giant leap forward, and could even transform development drilling at the Prudhoe Bay field in the future.

For one, the tube itself has been converted into a drilling device, equipped downhole with a motor and bit powered by fluids injected into the tube from above. And after it's inserted into an existing well bore and sidetracked to a fresh pot of oil, the tube serves as a permanent funnel to carry oil to the surface.

Moreover, once this new drilling technology is perfected, it's expected to cost about half as much as a conventional system that requires an expensive rig to drill and maneuver bulky pipe into place.

"It's really fantastic technology," says Weeks. "It's coiled up and you don't have to make connections. You just unreel it."

The first 650-foot section of coiled tubing installed last year at Prudhoe Bay -- turned horizontally downhole to capture more crude from the thinning oil column -- produced an impressive 4,000 barrels of oil a day.

It's also believed that the use of coiled tubing causes far less damage to the oil-bearing formation than traditional methods, which fill the pipe with drilling mud to protect it against natural reservoir pressures and potential blowouts. But the mud tends to work its way into the formation, restricting the flow of valuable hydrocarbons.

"Because we're contained in the tubing, which has the ability to withstand those pressures, we don't damage the formation," says Weeks.

PULLING IN OIL POCKETS

A drilling technique that evolved from horizontal and sidetrack technologies, coiled tubing could play an even more innovative role beginning this year.

A highly complex reservoir, Prudhoe Bay contains numerous "shale stringers," or isolated oil accumulations of 10 million to 15 million barrels that can't be drained using conventional drilling techniques because of gas barriers.

Weeks believes that coiled tubing, up to 3.5 inches in diameter, is so flexible that it can be turned up or down at various angles and locations on the main horizontal stem thousands of feet beneath the surface to reach these elusive pockets of crude. He calls this shotgun method of drilling a "hub-and-spoke" or "spine-and-rib multi-lateral completion."

"These are small targets by Prudhoe standards," adds Weeks. "But if you get enough of those targets at low enough cost, you can get a lot of this oil that otherwise would be left behind. I think we are just scratching the surface on this coiled tubing drilling technology."

The net result is that while innovative drilling technologies are helping to reduce the number of new and costly production wells, they also are serving to increase the number of actual "penetrations" into the Prudhoe Bay reservoir via existing well bores.

"It's hard to call them new wells because we're sidetracking old wells and re-completing old wells," explains Weeks. "But we can get more penetrations for less money. It's really a big cost saver."

INCREASED PRODUCTION

Consequently, both Arco and fellow Prudhoe Bay operator BP Exploration have greatly increased the number of reservoir penetrations expected over the next 10 years, from about 600 to roughly 1,000.

Brian Davies, senior vice president for BP's operations at Prudhoe Bay, continues to believe that because of the highly successful drilling program at Prudhoe Bay, another billion barrels of crude above previous BP estimates of 12 billion barrels ultimately can be recovered from the supergiant field.

"I think it's still on course, in that we're achieving efficiencies, doing more for less," says Davies. "You know these things come slowly. But certainly nothing has changed to make us pessimistic about the potential of Prudhoe Bay." Arco believes a total of 12 billion to 12.5 billion barrels of oil can be recovered from the Prudhoe Bay reservoir, and is sticking with that official company estimate for the moment.

"But we're going to take an in-depth assessment," says Weeks. "Within the next year, we'll decide whether we're going to add any reserves to our estimates, and how much that will be."

Meanwhile, field operators plan to continue their pioneer work on coiled tubing, although they concede the technique has a few bugs that need to be worked out. "We're really not efficient at this yet," says Weeks. "We need to modify the equipment to make it more efficient. But those modifications will be made and the cost will come down."

Nevertheless, the technology of coiled tubing promises to play a significant role in helping to boost the amount of oil that can be recovered from the motherlode at Prudhoe Bay.

"The North Slope is one place in the world where the stakes are big enough to do this," concludes Arco spokesman Ronnie Chappell. "We're at the forefront of efforts to push coiled tubing to its limit. People look at it as an evolving technology that may have a significant impact on the way we do business up there."
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Title Annotation:oil drilling innovations
Author:Tyson, Ray
Publication:Alaska Business Monthly
Date:Feb 1, 1994
Words:1368
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