APRIL 2022 / DEFINING CONVENTIONAL, SHALE AND OFFSHORE TECHNOLOGY FOR OIL AND GAS / WorldOil.

com

OFFSHORE TECHNOLOGY
New system for reservoir management to smaller platforms; all-electric
systems are vital for subsea’s future; new opportunities in ESG; and more

FORMATION EVALUATION THE ENERGY TRANSITION:

3D mapping improves OFFSHORE WIND
reservoir understanding Global offshore wind capacity
achieves record growth

REGIONAL REPORT:
GULF OF MEXICO
Industry faces a conflicting
brew of circumstances
CENTER FOR
OFFSHORE SAFETY
The Center for Offshore Safety (COS) supports companies in offshore
natural gas and oil operations to develop, implement and improve their
Safety and Environmental Management Systems.

Join COS in their mission

to improve offshore operations:
www.CenterForOffshoreSafety.org
281-978-4940 | info@centerforoffshoresafety.org

19
SPECIAL FOCUS:
OFFSHORE TECHNOLOGY
19 New system builds on proven
technology for reservoir
management to smaller
platforms and satellite wells
J. Musselman
23 Streamlining liquid mud
plants: Sustainability from
the ground up
D. Mackay / M. Kapila
R. Signorelli
27 Technologies to enable subsea
electrification for a topside
free environment
M. Lamb
29 Real-time operations center
drives new ESG opportunities
by integrating personnel
and data
L. Wang / C. Stewart
35 OTC 2022 recognizes
Spotlight on New Technology®
Award winners
K. Abraham
CONTENTS
APRIL 2022 / VOL. 243, NO.4
23
REGIONAL REPORT:
GULF OF MEXICO
40 Slings and arrows
M. Slaton
FORMATION EVALUATION
45 Three-dimensional
mapping improves reservoir
understanding with volumetric
and 3D insights
M. Viandante / J. M. Denichou
H. Wang
SHALETECH: PERMIAN BASIN
48 Permian Shales: $100 oil,
European tensions test
basin-wide discipline
J. Redden
MANAGEMENT ISSUES
53 Oil and gas expansion
accelerates as outlooks
improve significantly
M. Plante / K. Patel
THE ENERGY TRANSITION:
OFFSHORE WIND
56 Global offshore wind capacity
achieves record growth
S. Gordon
56
COLUMNS
7 First oil
Looking for positivity among
all the negativity
9 What’s new in production
Nano Fluids - Lubricants
11 Oil and gas in the capitals
Casualties of war
13 The ESG perspective
A day without oil?
15 Executive viewpoint
Texas oil and gas can save
Europe—again
60 The last barrel
U.S. industry adapts to new normal
STATS AND RESOURCES
16 Industry at a glance
58 Advertisers’ index
59 Advertising sales offices
ABOUT THE COVER
Illustrating April’s Offshore Technology
lead theme, the cover features an image
of Transocean’s soon-to-be-delivered
Deepwater Atlas drillship during recent sea
trials offshore Singapore. The Deepwater
Atlas and Deepwater Titan, which is also
under construction in Singapore, are the
only two “eighth-generation” drillships in the
industry, differentiated by their ability to drill
and complete 20,000-psi prospects and an
industry-leading, net three-million-pound
hoisting capacity. Image: Transocean.
World Oil® / APRIL 2022 3
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for an
Contributing Editors
Dr. A. F. Alhajji, Middle East Mauro Nogarin, Latin America
Dr. Roger Bezdek, Washington Dr. Øystein Noreng, North Sea
David Blackmon, Reg. Affairs Mark Patton, Water Management/ESG
Willard C. (Bill) Capdevielle, Production Dr. William J. Pike, Energy Issues/Research
Robert Curran, Canada Jim Redden, Drilling
Bill Head, Exploration Dr. Jacques Sapir, FSU
Raj Kanwar, South Asia Mike Slaton, At Large
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Leslie S. Beyer, CEO, Energy Workforce & Technology Council
Eric Carre, Executive Vice President–Global Business Lines and Chief HSE Officer,
Halliburton Company
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World Oil

JULY 2019 / DEFINING CONVENTIONAL, SHALE AND OFFSHORE TECHNOLOGY FOR OIL AND GAS / WorldOil.com

Centre for Research in Energy Economics and Finance, University of Aberdeen

Basak Kurtoglu, Senior Vice President–Technical, Quantum Energy Partners
Hege Kverneland, Member, Board of Directors, Stinger Technology AS
Trent Latshaw, President, Latshaw Drilling Co. LLC, and member,
JULY 2019

PERMIAN BASIN IADC Executive Committee

Dr. D. Nathan Meehan, President, CMG Petroleum Consulting Ltd
TECHNOLOGY
Optimized completion methods Douglas C. Nester, Co-founder and CEO, PetroReal ASI
enhance recovery, lower costs
David A. Pursell, Executive Vice President – Development, APA Corporation
PERMIAN BASIN TECHNOLOGY

UNCONVENTIONAL RESOURCES
Real-time stimulation monitoring improves economics
SAND & PROPPANT SUPPLY ANALYSIS
Ample supply helps operators in volatile market
REGIONAL REPORT: NIGERIA/ANGOLA
Top two producers climbing global E&P ranks
Art J. Schroeder, Jr., CEO, Energy Valley, Inc.
Dr. Ashraf M. Al-Tahini, CEO, Saudi Aramco Upstream Technology, and Manager,
EXPEC Advanced Research Center
Svein Tollefsen, Manager, Reservoir Technology, Equinor ASA
Robert E. (Bob) Warren, President, Baclenna, Inc.
Nola Zwarich, P.Eng., Principal Completion Engineer, Alaska Drilling and Wells,
ConocoPhillips

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Looking for positivity
among all the negativity
Well, we continue to experience a most
interesting, albeit aggravating set of nega-
tive financial and logistical factors at work
globally. War conditions have gone on in
Ukraine for more than seven weeks, as of
this writing. In the U.S. and many other
countries, rampant inflation is taking
place, the various supply chains are a mess,
energy supplies are disrupted, and the cost
of oilfield equipment and services is jump-
ing higher. It’s hard to ignore all this nega-
tivity, but in this column, we’re looking for
some positivity, wherever we can fit it.
Digital transformation aiding net
zero initiatives. One of the more posi-
tive things in this industry that this editor
has witnessed of late was a conference in
early April that yours truly participated in.
Put on by Ansys, Inc., a firm specializing
in engineering simulation software, the
Ansys Energy Forum’s working topic was
Reshaping the Future of Energy through
Digital Transformation.
Assuming that comments from con-
ference participants are reflective of the
industry’s overall mood, then the pace
of digital transformation in oil and gas is
gaining momentum in 2022. In addition,
the companies represented in the Hous-
ton event emphasized that they are dedi-
cated to achieving net-zero operations
and rolling up their sleeves accordingly.
The conference brought together a
significant, representative slice of large
operators and service companies to dis-
cuss what they are doing in this sphere, in
terms of goals, strategies, methods and im-
plementation. Represented either among
panel participants or attendees were oper-
ators such as Shell and BP, along with ser-
vice firms and technology providers like
Schlumberger, Baker Hughes, Hallibur-
ton, NOV, Microsoft, GE and Flowserve.
What impressed this editor was that
to a person, every panelist expressed the
dedication that his/her company has to
the digital transformation and net-zero
efforts, as well as the sense of urgency
that they showed, and the strategies/
methods already being implemented.
FIRST OIL
KURT S. ABRAHAM, EDITOR-IN-CHIEF
That is one big nugget of positivity.
Canada removes a Bay du Nord
stumbling block. Another positive mo-
ment occurred a day after the Ansys
conference, when the Canadian federal
government reversed itself and suddenly
approved the environmental assessment
for Equinor’s Bay du Nord development
project. This came just a month after
federal officials on March 4 said that En-
vironment and Climate Change Minister
Steven Guilbeault needed more time to
review the offshore site and project.
Environmentalists, no doubt, were hop-
ing that the delay would kill the project.
But thankfully, someone in the Canadian
federal government finally came to his/her
senses and put through approval of the as-
sessment. One does have to wonder how
much the energy shortage stemming from
the war in Ukraine, plus sky-high oil and
gas prices, played into this decision. Nev-
ertheless, it’s one giant nugget of positivity.
A final testimonial to one of the in-
dustry’s great ambassadors. Last, but
not least, among our examples of positiv-
ity is the April 1 retirement of Halliburton
Vice President of Industry Relations Galen
Cobb. After graduating from Oklahoma
Christian University in 1975, Galen went
to work for Halliburton in what turned out
to be an illustrious 47-year career. From
1991 to 1994, he was Director for CIS and
China, with oversight in establishing Hal-
liburton’s presence and operations in these
emerging markets. Later he was named
Director, Executive Sales and Business
Development, before being promoted to
his last, most notable post in 2002.
This editor has been blessed to know
Galen for 30 years. And in that time, he has
been a consummate ambassador for both
Halliburton and the industry as a whole.
Whether dealing with industry companies
and associations, federal and state officials,
other countries, philanthropic efforts, or
the public at large, Galen has been a bas-
tion of effectiveness and positivity. We are
going to miss his presence greatly. Best
wishes, Galen, on a great retirement!
IN THIS ISSUE
19 Special focus: Offshore tech-
nology. Our lead theme has a
wealth of material. A Weatherford man-
ager describes how a new system pro-
vides reservoir management to smaller
platforms and satellite wells. Meanwhile,
a Halliburton author focuses attention
on operations at liquid mud plants to
reduce, reuse and repurpose materials.
Parker Wellbore experts explain how a
real-time operations center drives new
ESG opportunities. And a Baker Hughes
author says all-electric systems are vital
for future subsea operations in the en-
ergy transition.
40 Regional report: Gulf of
Mexico. Skyrocketing oil
prices caused by Russia’s war on Ukraine
and Biden’s war on hydrocarbons pres-
ent the Gulf of Mexico E&P industry with
a conflicting brew of circumstances, says
Contributing Editor Mike Slaton. While
the demand for oil becomes even more
critical, U.S. operations in the Gulf and
elsewhere are stymied by inconsistent
government actions. For the deepwater
Gulf, these slings and arrows imperil fu-
ture production more than today’s imme-
diate needs.
45 Formation evaluation: Three-
dimensional mapping. Sch-
lumberger authors say that 3D mapping
improves reservoir understanding with
volumetric and 3D insights. For more
sustainable drilling, operators should drill
fewer, more accurate wells. This is chal-
lenging in more complex reservoirs. A
3D reservoir mapping service helps im-
prove geosteering in such environments.
The 3D reservoir mapping-while-drilling
capabilities open opportunities for addi-
tional applications and integration with
3D or 4D seismic workflows.
ŝ EDITORIAL@WORLDOIL.COM
World Oil® / APRIL 2022 7
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LEARNING & DEVELOPMENT
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within it, the Energy Workforce & Technology Council offers
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and access to executive coaching – all designed to educate, empower
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WILLARD C. (BILL) CAPDEVIELLE, P.E., CONTRIBUTING EDITOR
Nano Fluids - Lubricants
In my December 2021 column, while
discussing heat exchangers, I introduced
you to the concept of Nano Fluids. Nano
Fluidics is an area of the broader “Nano-
Technology” that uses nano-sized parti-
cles to “functionalize” a fluid (rather than
a surface) to better perform a specific
function. In the heat exchanger column,
I discussed the use of certain nano-parti-
cles to increase the thermal conductivity
of fluids used in heat exchangers.
This month, I’d like to expound a bit
more on a particular type of nano-fluids:
Nano-Lubricants.
VinTech Nano Materials manu-
factures a unique family of proprietary
hybrid nanoparticles called nGlide. As
shown in Fig. 1, an nGlide particle has a
nanoparticle core surrounded by one or
more functional materials. The final size
of the nGlide particle is still in the nano-
meter range. This means that they will
not settle out in a fluid. When added to
lubricants, the nGlide particles coat the
lubricated surfaces at the nanometer lev-
Fig. 1. Depiction of an nGlide particle.
Fig. 2. Depiction of omnidirectional
asperities and loadings on polished
surfaces.
The Surface is not Simple & nor is it Flat
Micro-asperity contact
Microscopic forces of molecular Adhesion &
mechanical Abrasion
WHAT’S NEW IN PRODUCTION
el. As shown in Fig. 2, even highly pol-
ished surfaces, such as bearings, have mi-
croscopic imperfections (or roughness)
that result in a constant compression-
relaxation cycle that not only increases
friction, but also generates heat. When
added to a lubricant, the nGlide particles
constantly fill the “roughness gaps” to
prevent this compression-relaxation cy-
cle. The result is a significant reduction
in friction and heat, and significantly
longer lives for the lubricated parts.
VinTech Nano Materials actually
doesn’t sell nGlide particles. Instead, they
offer a series of 21 individual lubricants
under the AtomLube™ label, and a series
of 17 individual oils under the AtomOil™
label. Each of these products, including
the nGlide particles, are designed to per-
form a specific function under a particu-
lar set of operating conditions.
Some examples. AtomOil Engine
Oil Treatment for lubrication of rotating
equipment; AtomOil Extreme Pressure
Gear Oil for gear boxes; AtomOil Drone
Oil for lubrication of delicate instrumen-
tation; AtomOil Ultra Wireline Lubri-
cant 12750 for protection of slickline,
braided line, coiled tubing, snubbing
pipe, and perhaps wire rope against salt
water and H2S corrosion.
In addition, there is the AtomLube
series of six greases, sealants, lubricants
Fig. 3. 10,000-cycle test on frac valve bonnet sleeve cam.
and anti-seize pastes for valves; Atom-
Lube series of 13 greases and lubricants
for a variety of lubrication applications;
and two AtomLube dielectric greases.
So, what’s the prize? AtomOil En-
gine Oil Treatment has shown a 43%
reduction in an engine’s steady state
friction and a significant increase in oil
film activation. AtomLube Frac Stack
Grease has shown a 20% reduction of
friction, a 90% reduction in wear, and
a 50% increase in load capacity of frac
stack valves. AtomLube Anti-Seize Lu-
bricant has shown a 90% reduction in
wear and a 60% increase in load capac-
ity on the valve stem of frac stack valves.
AtomLube Ultrared Trucking Grease
has shown a 40% reduction in friction
and a 20% reduction in wear on frac and
transportation truck kingpins.
Figure 3 demonstrates the positive ef-
fects of AtomLube® on the bonnet sleeve
cam of a frac valve after a 10,000-cycle
wear test. With the AtomLube®, there
was no detectable friction or wear. This
resulted in a reduction in valve down-
time and repair costs. For more informa-
tion go to: www.vintechnm.com.
ŝ BILL@OILPATCHENGR.COM / Bill Capdevielle has 45 years of
upstream industry experience. He has held various technical and
managerial positions and is retired from both Mobil Oil and Hess. Bill
has spent equal portions of his career supporting producing operations,
in upstream technology centers, and in capital project support.
World Oil® / APRIL 2022 9

DR. JACQUES SAPIR, CONTRIBUTING EDITOR, FSU
Casualties of war
The consequences of the war between
Ukraine and Russia will be considerable
for the energy and oil markets. Given
the extent of damages produced by the
war and the sanctions taken by NATO
countries and their allies (Australia, Ja-
pan, South Korea), a ceasefire will not
imply a return to normal. The Ukrainian
oil industry is in shambles, and the future
of Russian oil production is uncertain. If
Russia can find substitute customers, the
question of the sustainability of produc-
tion levels achieved so far arises.
Ukraine was traditionally the pro-
cessing location for most Soviet oil.
However, its refining level declined dra-
matically after 2010, even before the
2013-2014 Maïdan insurgency and prob-
lems with Russia. Oil refinery throughput
declined from 369,000 bpd in 2005 to
108,000 bpd in 2012 and 68,000 bpd in
2020. As most industrial facilities were
emplaced around Odessa and Mariupol,
all the output is now stopped. Damage is
probably extensive.
Ukraine possesses some convention-
al and unconventional hydrocarbon re-
serves. These resources are concentrated
in three regions: Carpathian in the west
(13% of proven reserves); Dnieper-Do-
netsk in the east (80%); and Black Sea-
Sea of Azov in the south (around 7%).
Territorial conditions for a war termina-
tion are here of the utmost importance.
Russia is the third-largest oil pro-
ducer behind the U.S. and Saudi Arabia.
But Russia is the largest exporter of petro-
leum and products in the world. Europe
depends on these exports, whether for
crude oil or products—such as diesel—
for its supplies. In January 2022, Russia’s
total oil and product production reached
11.3 MMbpd, practically recovering its
pre-Covid level, of which about 8 MMb-
pd, or 70%, were exported. IEA forecasts
indicate that 2.5 MMbpd to 3.0 MMbpd
of exports are at risk, corresponding to
35% to 37%. However, the Ruble-USD
exchange rate, after plummeting during
the invasion’s first days, is now recovering,
OIL AND GAS IN THE CAPITALS
with the ruble stabilizing at 10% under its
early February value.
The U.S. and Canada have banned im-
ports of Russian oil, while the UK has said
it will phase out purchases. French firm
TotalEnergies, which owns a major part of
NOVATEK, the main exporter of Russian
LNG, has said that it will stop its purchas-
es of Russian oil by next December. But
other European nations have not followed
suit, given their energy dependence on
Russia. The IEA said that major oil com-
panies, as well as trading houses, shipping
companies and banks, were backing down
from doing business with Russia.
However, in the short term, Russia
could find substitute customers, mainly
in India and China. Purchases made by
Indian companies, which have obtained
significant discounts from Russian firms,
are up very sharply. Given that the Rus-
sian budget was calculated on the basis of
a $42/bbl oil price (Brent), and that the
price today is above $100, this leaves a sig-
nificant margin for future discounts. The
fact that India, with Russia’s help, is study-
ing the construction of tankers suitable
for the Arctic route, is a good indication
of the economic and strategic importance
of the ties between the two countries.
The question is more complex,
when we look at sanctions relating to
production, itself. Many companies from
countries that imposed sanctions against
Russia worked as subcontractors for large
Russian companies (Rosneft, Lukoïl, etc.)
and for Western firms operating in Russia.
Is the withdrawal of these subcontractors
likely to compromise Russian production
capacity?
Probably no, in the short term. Sim-
ilar, albeit less extensive, sanctions were
imposed in 2014 and 2015 against Rus-
sia, and they had no significant impact.
If Russia had to permanently do without
the contribution of these companies, the
impact could be more severe. But today’s
world is no longer that of the late 1970s,
when high-tech sanctions were imposed
on the USSR following the invasion of Af-
ghanistan. Dissemination of techniques
and know-how in several countries is now
a reality.
Moreover, the weight of the NATO
countries and their allies is much less than
it was in the 1970s. It is, therefore, more
than likely today that the new sanctions
will bring about a change in subcontrac-
tors, favoring Chinese or Indian compa-
nies, rather than blocking production.
In addition, some of the NATO bloc or
allied countries could transfer part of
the know-how to Chinese companies, to
maintain an indirect presence in Russia.
Finally, the de facto prohibition for
Russian companies to finance themselves
on Western financial markets should not
represent a significant obstacle to invest-
ments. Already, part of the investments in
Russia’s hydrocarbon sector are made in
yuan. This should accelerate in the com-
ing period. Moreover, the Central Bank
of Russia has changed its policy signifi-
cantly since the war between Russia and
Ukraine began. It is not impossible that it
will put in place specific refinancing con-
ditions for large Russian companies in the
hydrocarbon sector.
Russian production is not likely to
be affected severely in the medium term.
The experience of the sanctions taken in
2014 and 2015 shows that their impact is
limited. The question of short-term im-
pact, paradoxically, seems more import-
ant. The extent of additional Chinese and
Indian demand for Russian oil, and the
ability of Russian companies to deliver
this oil by sea, is a real uncertainty. We
can, however, consider that Russian com-
panies will find ways to circumvent both
the effects of the sanctions and that of
the implicit withdrawal of many Western
companies from operating with Russia.
The world is no longer “West”-centered.
This could be one lesson rammed home
by this ugly war.
ŝ SAPIR@MSH-PARIS.FR / Jacques Sapir is a professor of economics
at the School for Advanced Studies in the Social Sciences (EHESS) in Paris,
and at the Higher School of Economics in Moscow. An expert on Russian
economic policy, he graduated from the Institute of Political Studies in
Paris in 1976, and earned a PhD in economics from EHESS in 1980.
World Oil® / APRIL 2022 11
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A day without oil?
Things are beginning to move a little
quicker in ESG reporting and standards.
Recently, the International Sustainability
Board published its first two proposals
on development of global standards. The
U.S. Securities and Exchange Commis-
sion (SEC) on March 21, 2022, issued
a proposed rule for new ESG disclosure
requirements, starting as early as 2024.
This looks like we are aligning toward
more comprehensive ESG reporting for
public companies. On the surface, this
supports the massive shift toward Car-
bon Capture and Sequestration (CCS),
as the race toward net zero begins. But is
it all that simple?
You see, plenty of negotiating and
posturing is still taking place as these
disclosure requirements are being devel-
oped, and we still don’t have a clear view
of what exactly these standards might
be. Even the SEC’s proposed rule is still
receiving public comment and possibly
some legal challenges, so it’s hard to say
that 2024 will be the first year that these
standards are reported. One of the more
complicated issues will be reporting
Scope 3 emissions, even though they are
extending the reporting requirements.
The root of the problem will be how to
get a private company, which is not ob-
ligated to report Scope 3 emissions, to
report its emissions to a publicly traded
client. There is much in the way of details
to work out here before the smoke clears
and believe me, there is a lot of smoke.
What is undeniable is we will see
more transparency for publicly traded
companies and pressure to get to carbon
net zero will continue. The question is
which way will the scales tip—toward
eliminating fossil fuels or to a more rea-
sonable balance? In my last column, I dis-
cussed the importance of the European
Commission (EC) ruling that natural gas,
with some caveats, could be sustainable.
Of course, this came after a disastrous
winter that saw increasing energy use
and decreasing reliability, with blackouts
and brownouts, as the EU became more
THE ESG PERSPECTIVE
MARK PATTON, CONTRIBUTING EDITOR
solar- and wind-centric. This seems to
tip the scale toward the more reasonable
balance I think we need. Since then, on
March 28,2022, the SEC ruled that Green
Century (an environmental mutual fund
company) could move forward with its
proposal to Chubb Limited (a large prop-
erty and casualty insurance company), to
cease underwriting new fossil fuel sup-
plies, a tip in the other direction.
On the surface, while the EU is learn-
ing from its overdependence on solar and
wind, and needs more reliable, less-ex-
pensive sources of energy, the U.S. is
heading headlong down the same path
that the EU is trying to shift from. Don’t
get me wrong: the EC faced a lot of back-
lash from its decision, and we can still see
some shifts down the road. So, there pos-
sibly will be some reversal. That is why I
called this decision a battleground topic
for our industry that we cannot lose. The
SEC ruling in favor of Green Century is
exactly what this battle is about. As we
talk about the path and race to net zero,
they are talking about eliminating the oil
and gas industry.
Then came Russia’s invasion of
Ukraine. As horrific and terrible as this
invasion is, it accomplished one thing—
it underscored the world’s dependence
on oil and gas. With U.S. gas prices al-
ready on the rise, this invasion increased
prices even further. Russia’s leverage on
Europe in general, but primarily East-
ern Europe, is Russian oil and gas. They
even use these commodities to support
the Russian ruble by tying it to a gold
standard lower than the existing one and
requiring buying nations to purchase
Russian oil and gas in rubles. This is in
response to sanctions that have devas-
tated the ruble. Let’s hope Putin’s effort
to tie the ruble to gold is as unsuccessful
as Libya’s Gaddafi’s attempt. If anything,
it may better align NATO against Rus-
sia, but I digress. Russia’s invasion has
led Europe to look for other oil and gas
sources. It also has forced the Biden ad-
ministration to reconsider its attempt to
shut down leases on federal lands.
The opposition will argue that this
is exactly why we must hurry to elim-
inate fossil fuels, to eliminate the lever-
age countries like Russia have over the
world. The problem is the real treachery
this path will take. Europe certainly has
gotten a taste of it—increasing energy
costs with less reliability; increasing cost
of everything; no more asphalt, plastics,
rubber and chemicals that we use every
day; tires for our cars. Yes, we can devel-
op alternatives, but at what cost and in
what timeframe? Or we can offset fossil
fuel emissions and develop a new CCS
industry while moving toward cleaner
energy in a slower transition. There are
bigger and bolder movements within the
industry—what if we offset our emis-
sions with CCS and take our produced
water and clean it to discharge standards?
Imagine a net zero industry that provides
energy as well as clean water—can there
be anything more sustainable?
We must support efforts to include
natural gas in sustainability conversa-
tions. We cannot let the ESG movement
become the fossil fuel elimination move-
ment. In 2004, a famous mockumentary
was made, “A Day Without a Mexican,”
to highlight the importance of this com-
munity to California. Well, I think it’s
about time for our own documentary,
“A Day Without Oil,” to highlight how
vital oil is to our everyday lives. I don’t
believe that everyday Americans truly
understand this and what an outright
ban on fossil fuels really means, plus the
devastation it would cause to our way of
life and economy.
I will keep you updated on all matters
ESG in the industry, but we must stay
vigilant and support our industry and
its efforts to move towards net zero. The
race is on my friends; let’s not take our
eye off the target.
ŝ MPATTON@HYDROZONIX.COM / Mark Patton is president of
Hydrozonix, an oil and gas-focused water management company.
He is a chemical engineer with more than 25 years of experience
developing new technologies for wastewaters and process residuals.
World Oil® / APRIL 2022 13
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WAYNE CHRISTIAN, CHAIRMAN, RAILROAD COMMISSION OF TEXAS
Texas oil and gas can save Europe—again
Like everyone, I’m heartbroken about
everything happening in our world right
now. As a parent and grandparent, I’m
worried about the nation we are leaving
for the next generation.  energy, thousands of new jobs, economic
In recent years, it has become painfully
clear that climate catastrophism has an
oversized influence on public policy. An
intense focus on reaching the unattainable
goal of carbon-zero has repeatedly caused
poor policy decisions that increase costs
to consumers and make us more reliant
on unreliable forms of energy. Ironically,
these policies do not reduce emissions,
they just ship them overseas and make us
more reliant on hostile foreign nations,
like Russia and China. But it doesn’t have
to be this way.
Energy security is national security,
plain and simple. I know it sounds played
out, but it’s a fact. Nowhere is this demon-
strated more clearly than in Europe, which
had relied on Russia for almost half of its
natural gas supply (The New York Times)
and unreliable renewables for roughly
another fifth of their energy (EIA). The
European Union (EU) has painted them-
selves into an energy-dependent corner
and jeopardized their national security as
a result.  from 2016 to 2020 (EIA). Today, Texas
But Europe is more than a cautionary
tale. America could be headed down the
same hazardous road if Democratic lead-
ership in Washington, D.C., continues to
sacrifice reliable domestic production for
foreign markets.
Since taking office, President Biden has
made every poor decision that he could
to cripple our geopolitical standing in
the world and make the U.S. more reliant
on foreign oil and unreliable renewables.
From handing Afghanistan to the Taliban
to destroying our American energy domi-
nance, it’s clear this administration cares
more about appeasing radical left-wing
activists than doing what is right for the
American people.
There are better alternatives, and
buying American is the solution. In 2019,
the U.S. became a net exporter of energy
EXECUTIVE VIEWPOINT
for the first time in 67 years (EIA), sur-
passing Saudi Arabia and Russia to be-
come the largest producer of oil and gas in
the world (EIA). This gave us affordable
growth, and national security. Our coun-
try achieved this by simply empowering,
instead of attacking, domestic oil and
gas producers.
The EU should be buying liquified nat-
ural gas (LNG) from friendly countries
like America, Australia, and other Western
democracies to meet their firm generation
needs. It’s dependable, affordable, and
cleaner than coal. European gas presently
trades around $26 per metric million Brit-
ish thermal units, while the price of U.S.
LNG is a little over $9 but has been as
low as $4 (EIA). Given the right produc-
tion incentives, it can be that low again.
Texas represents a quarter of U.S. natural
gas production and can certainly produce
more to meet that potential demand.
Texas is the nation’s largest producer of
oil and gas. If it were a country, it would
be the third- largest producer in the world
(TXOGA). Prior to Covid-19 and OPEC
disputes, Texas was producing an histor-
ic 1.85 Bbbl a year, with a 60% increase
has been producing less at roughly 4.7
MMbopd, or 320,000 bopd less (EIA).
Currently, American oil and gas pro-
ducers are seeing all red lights. From grow-
ing ESG investments to federal leasing
bans to canceled pipelines and increased
regulations, there has been little incentive
the past two years for investors, produc-
ers, refiners and more.
We need to be realistic and practi-
cal. Environmentalists’ goal of net zero is
a wish, but it’s not an energy strategy. The
price of crude oil has skyrocketed, infla-
tion is rampant, and Europe is mired in its
first ground war since World War II.
It’s time to switch the lights from red
to green. We should be divesting from
hostile countries and harnessing Ameri-
can oil and gas, especially right here in the
Permian basin.
This wouldn’t be the first time that
Texas energy played an impactful role on
the world stage. In World War I, Eastland
County, Texas, and the “Roaring Ranger”
production were essential to the Allied
victory (American Oil & Gas Historical
Society). In World War II, 6 billion of
the 7 billion bbl of oil used to win the
war came from the U.S. (theconversa-
tion.com), with two East Texas pipelines
largely responsible for transporting most
of it from the largest oil field in history at
the time. Winston Churchill at the end of
the conflict said that the war was won on
a sea of East Texas oil (KLTV.com). In-
deed, Churchill was a long-time believer
in the importance of oil during military
conflict, and its a lesson that’s still true
to this day. In his pre-World War I role as
First Lord of the Admiralty for the Brit-
ish Navy, he stressed the echoing point of
energy security as national security in his
words, “Safety and certainty in oil lie in
variety and variety alone.” As Mark Twain
once said (supposedly), “history doesn’t
repeat itself, but it often rhymes.”
As Chairman of the Railroad Commis-
sion of Texas, I led an effort, joined by my
colleagues, calling for all oil and gas pro-
ducers to divest from Russia. I’m glad to
see so many companies heeded that call.
I’m also mildly encouraged that President
Biden came to his senses on Russian oil.
However, there is much more that needs
to be done to end Putin’s unlawful war,
decrease energy costs, and strengthen our
national security. As Biden shuts the spig-
ot off on Russian oil and gas, he needs to
turn the American one on full blast.
The Lone Star State is ready to meet
U.S. energy needs and help our European
allies meet theirs. Mr. President, please
just give Texas the green light.
ŝ A lifelong conservative businessman, WAYNE CHRISTIAN
was elected as the 50th Texas Railroad Commissioner in November
2016. Prior to his time at the Commission, Mr. Christian served
seven sessions in the Texas House of Representatives, accumulating
a strong record of standing for free markets and against burdensome
regulations. He is married to his wife, Lisa, and together they have
three daughters and five grandchildren. You can learn more about
Chairman Christian here:
https://rrc.texas.gov/About-Us/Commissioners/Wayne-Christian/.
World Oil® / APRIL 2022 15
 INDUSTRY AT A GLANCE
CRAIG.FLEMING@WORLDOIL.COM

Crude prices climbed in March, as the war in Ukraine persisted.

WORLD OIL & NGL PRODUCTION Million barrels per day
Experts predicted a long and drawn-out battle, which continued
FEB 2022 JAN 2022 AVG. 2021 AVG. 2020
to exacerbate concerns over the loss of Russian supplies. WTI
OPEC–CRUDE OIL
surged 18%, hitting $108.50/bbl, with Brent trading at $117.25/bbl, Saudi Arabia 10.23 10.10 9.12 9.21
up 20% compared to February. Despite higher prices, U.S. op- Iran 2.56 2.52 2.42 2.00
erators have not ramped up drilling activity dramatically, which Iraq 4.26 4.26 4.03 4.05
is typically the case in a high-price environment. Excessive com- United Arab Emirates 2.96 2.96 2.72 2.86
pany debt and the loss of bank funding have forced operators and Kuwait 2.61 2.57 2.42 2.41
service providers to embrace extreme financial discipline. The rig Neutral Zone 0.22 0.30 0.25 0.11
count averaged 662 units in March, up just 4% from 636 counted Angola 1.17 1.19 1.12 1.27
Nigeria 1.30 1.38 1.31 1.49
in February. In March, there were 4,273 DUCs in the U.S., 38% few-
Libya 1.16 1.00 1.15 0.35
er than the year-ago tally of 6,912. International activity averaged
Algeria 0.98 0.98 0.91 0.90
1,033 rigs in February, just two more than in January. Congo 0.28 0.28 0.27 0.30
Gabon 0.19 0.18 0.18 0.20
U.S. OIL PRODUCTION1 Thousand barrels per day Equatorial Guinea 0.09 0.09 0.10 0.11
DAILY AVERAGE FOR MONTH Venezuela 0.72 0.69 0.61 0.53
JAN JAN DEC NGLs & condensate1 5.33 5.29 5.22 5.11
STATE 20222 20213 % DIFF. 20212 TOTAL OPEC 33.84 33.49 31.58 30.80
Alabama 12 12 0.0 11 OECD2
Alaska 450 458 -1.7 451 U.S. 17.53 17.56 16.72 16.56
Arkansas 12 11 9.1 12 Mexico 1.97 1.99 1.95 1.93
California 349 377 -7.4 351 Canada 5.89 5.75 5.62 5.35
Colorado 398 377 5.6 412
United Kingdom 0.91 0.89 0.89 1.08
Florida 2 5 -60.0 4
Norway 2.12 1.97 2.04 2.01
Illinois 18 19 -5.3 19
Europe-others 0.46 0.45 0.46 0.47
Kansas 73 76 -3.9 72
Kentucky 5 5 0.0 6 Australia 0.47 0.47 0.44 0.45
4
Louisiana 1,792 1,525 17.5 1,798 Pacific-others 0.07 0.07 0.07 0.07
Michigan 12 12 0.0 12 TOTAL OECD 29.42 29.16 28.21 27.92
Mississippi 34 37 -8.1 36 NON–OECD
Montana 50 53 -5.7 51 Russia 11.40 11.37 10.87 10.61
Nebraska 4 5 -20.0 4 Azerbaijan 0.69 0.70 0.70 0.70
New Mexico 1,341 1,088 23.3 1,365 Kazakhstan 2.00 2.00 1.85 1.84
North Dakota 1,095 1,094 0.1 1,126 FSU-others 0.37 0.36 0.36 0.36
Ohio 47 56 -16.1 50 China 4.09 4.10 4.06 3.97
Oklahoma 394 420 -6.2 400
Malaysia 0.60 0.55 0.57 0.60
Texas4 4,867 5,018 -3.0 4,987
India 0.72 0.71 0.73 0.75
Utah 120 91 31.9 115
Indonesia 0.66 0.67 0.68 0.73
West Virginia 44 55 -20.0 42
Wyoming 227 236 -3.8 235 Asia-others 0.82 0.82 0.88 0.93
Others5 23 25 -8.0 27 Europe 0.11 0.11 0.11 0.12
TOTAL U.S. 11,371 11,056 2.8 11,587 Brazil 3.05 3.14 3.00 3.04
LOWER 48 10,921 10,598 3.0 11,136 Argentina 0.69 0.70 0.64 0.61
1 Includes lease condensate. 2 Preliminary estimate, EIA. Colombia 0.75 0.75 0.74 0.79
3 DOE estimate. 4 Includes federal OCS production. Ecuador 0.49 0.46 0.48 0.48
5 Includes Arizona, Indiana, Missouri, Nevada, New York, Pennsylvania, South Dakota, Tennessee and Virginia.
Latin America-others 0.42 0.42 0.43 0.40
Oman 1.05 1.04 0.98 0.96
U.S. GAS PRICES ($/MCF) & PRODUCTION (BCFD) Qatar 1.79 1.85 1.82 1.77
120 7 Middle East-Others 0.30 0.28 0.29 0.28
100 6 Egypt 0.57 0.57 0.57 0.60
Africa-others 0.72 0.74 0.74 0.79
80 Monthly price (Henry Hub) 5
12-month price avg. TOTAL NON–OECD 31.28 31.33 30.50 30.33
Production 4 PROCESSING GAINS3 2.29 2.29 2.25 2.11
60
3 TOTAL SUPPLY 96.82 96.31 92.53 91.17
40 Source: International Energy Agency. Note: Totals and subtotals may not add, due to rounding.
2 1 Includes condensates reported by OPEC countries, oil from non-conventional sources, e.g. Venezuelan Orimulsion
20 1 (but not Orinoco extra-heavy oil) and non-oil inputs to Saudi Arabian MTBE.
2 Comprises crude oil, condensates, NGLs and oil from non-conventional sources.
0 0 3 Net of volumetric gains and losses in refining (excludes net gain/loss in China and non-OECD Europe) and marine
J J A S OND J FMAMJ J A S OND J FMAMJ J A S OND J FM transportation losses.
2019 2020 2021 2022
Production equals U.S. marketed production, wet gas. Source: EIA.
WORKOVER RIG COUNT
SELECTED WORLD OIL PRICES ($/BBL) Jan 2022 YR. AGO
120 REGION ACTIVE AVAIL. IDLE STACKED TOTAL % UTIL. ACTIVE
110 Texas Gulf Coast 161 56 29 124 370 44% 125
100
ArkLaTex 39 13 12 39 103 38% 26
90
80 Eastern U.S. 25 20 18 3 66 38% 20
70 South Louisiana 15 10 5 0 30 50% 11
60 Mid-Continent 131 86 9 106 332 39% 73
50 Dubai Fateh West Texas / Permian 267 63 135 272 737 36% 275
40 W. Texas Inter. Rocky Mountains 212 43 50 150 455 47% 192
30 West Coast / Alaska 145 18 102 63 328 44% 113
20 Brent Blend
Source: DOE TOTAL U.S. 995 309 360 757 2,421 42% 835
10
0 Active - crewed and worked every day during the month. Source: AESC
Available - has crew ready to work.
M A M J J A S O N D J F M A M J J A S O N D J F M Idle - capable of being put to work in 48 hr and does not require spending in excess of $50,000.
2020 2021 2022 Stacked - cannot work without investment in excess of $50,000.

16 APRIL 2022 / WorldOil.com
 INDUSTRY AT A GLANCE
CRAIG.FLEMING@WORLDOIL.COM

INTERNATIONAL ROTARY RIG COUNT Monthly average INTERNATIONAL ROTARY U.S. ROTARY
FEB 2022 JAN 2022 FEB 2021 DRILLING RIGS DRILLING RIGS
REGION & COUNTRY LAND OFFSHORE LAND OFFSHORE LAND OFFSHORE 1400
CANADA* 219 1 190 0 170 1 1300
EUROPE 72 30 79 32 67 31 1300
Germany 1 0 1 0 0 0 1200 1000
Italy 3 0 3 0 2 0
Netherlands 1 1 1 1 2 0 1100
Norway 0 16 0 17 0 18 1000 700
Poland 2 0 2 0 3 0
Romania 4 0 4 0 10 0 900
Turkey 19 2 18 2 16 1
400
800
United Kingdom 0 7 0 8 0 9
Others 42 9 50 4 34 3 700 F M A M J J A S O N D J F M A M J J A S O N D J F 100 M A M J J A S O N D J F M A M J J A S O N D J F M
2020 2021 2022 2020 2021 2022
MIDDLE EAST** 252 35 249 40 224 36
Abu Dhabi 26 8 27 11 29 15 Source: Baker Hughes.
Egypt 24 10 22 11 19 2
Iraq 46 0 46 0 31 0
U.S. ROTARY RIG COUNT Monthly average
Kuwait 28 0 25 0 28 0
Oman 47 0 44 0 46 1 % DIFF.
Pakistan 16 0 16 0 12 0 MAR FEB MAR MAR ’22
Saudi Arabia 58 9 61 9 53 10 STATE & AREA 2022 2022 2021 VS. MAR ’21
Syria 0 0 0 0 0 0 ALABAMA-TOTAL 0 0 0 0.0
Others 7 8 8 0 6 8 Land 0 0 0 0.0
AFRICA** 64 17 71 15 49 8 Inland water 0 0 0 …
Algeria 26 0 33 0 22 0 Offshore 0 0 0 …
Angola 0 6 0 6 0 4 ALASKA-TOTAL 8 8 3 166.7
Kenya 4 1 4 0 3 0 Land 8 8 3 166.7
Libya 15 0 15 0 12 0 Offshore 0 0 0 …
Nigeria 7 1 6 0 5 2 ARKANSAS 0 0 0 0.0
Others 12 9 13 9 7 2 CALIFORNIA-TOTAL 7 7 7 0.0
LATIN AMERICA 121 32 129 29 95 30 Land 7 8 7 0.0
Argentina 51 0 48 0 38 0 Offshore 0 0 0 0.0
Brazil 2 10 2 8 2 6
COLORADO 14 13 8 75.0
Colombia 27 0 33 0 15 0
FLORIDA 0 0 0 0.0
Ecuador 7 0 10 0 4 0
KANSAS 1 0 0 0.0
Mexico 22 22 24 21 25 21
KENTUCKY 0 0 0 0.0
Venezuela 0 0 0 0 0 0
LOUISIANA-TOTAL 58 54 46 26.1
Others 12 0 12 0 17 3
North - Land 44 39 34 29.4
ASIA-PACIFIC 116 74 118 79 101 60
Australia 17 2 17 3 12 0 South - Inl. water 2 2 0 0.0
China, offshore 0 41 0 42 0 36 South - Land 0 0 1 -100.0
India 67 11 64 13 62 15 Offshore 11 13 11 0.0
Indonesia 25 4 30 3 19 2 MICHIGAN 0 0 0 …
Malaysia 0 6 0 7 0 3 MISSISSIPPI 0 0 0 0.0
New Zealand 1 0 1 1 1 1 MONTANA 1 1 0 0.0
Thailand 1 2 1 3 1 1 NEBRASKA 0 0 0 0.0
Vietnam 0 5 0 5 0 1 NEVADA 0 0 0 …
Others 5 3 5 2 6 1 NEW MEXICO 98 93 64 53.1
TOTAL 844 189 836 195 706 166 NEW YORK 0 0 0 …
* Updated with most recent data.**No data available for Iran and Sudan/South Sudan. Source: Baker Hughes.
NORTH DAKOTA 33 32 13 153.8
OHIO 12 12 9 33.3
OKLAHOMA 49 52 17 188.2
INTERNATIONAL
I OFFSHORE RIGS PENNSYLVANIA 25 24 19 31.6
SOUTH DAKOTA 0 0 0 …
U.S. GULF OF MEXICO NORTHWEST EUROPE WORLDWIDE
APR 2022 APR 2021 APR 2022 APR 2021 APR 2022 APR 2021 TENNESSEE 0 0 0 …
TEXAS-TOTAL 319 302 203 57.1
Total rigs in fleet 46 58 70 82 679 719
Offshore 1 1 2 -50.0
Marketed Supply 34 32 67 68 595 597
Inland water 1 1 0 …
Marketed Contracted 28 22 58 57 499 486 District 1 21 20 11 90.9
Rig utilization, % 82.4 68.8 86.6 83.8 83.9 81.4 District 2 24 21 16 50.0
District 3 6 5 3 100.0
Source: IHS Petrodata Weekly Rig Count.*
District 4 15 15 5 200.0
District 5 2 3 1 100.0
U.S. DRILLED BUT UNCOMPLETED WELLS District 6 24 21 14 71.4
District 7B 6 6 2 200.0
MAR FEB MAR Y-O-Y District 7C 26 24 20 30.0
REGION 2022 2022 2021 DIFF., % District 8 178 170 124 43.5
Anadarko 740 753 740 0.0% District 8A 12 13 5 140.0
Appalachia 467 473 548 -14.8% District 9 0 0 0 0.0
Bakken 415 426 647 -35.9% District 10 3 4 1 200.0
Eagle Ford 642 653 1,009 -36.4% UTAH 12 12 3 300.0
W. VIRGINIA 11 11 12 -8.3
Haynesville 383 371 324 18.2%
WYOMING 15 15 5 200.0
Niobrara 317 331 481 -34.1%
OTHERS 1 1 1 0.0
Permian 1,309 1,380 3,163 -58.6% U.S. OFFSHORE TOTAL 12 14 13 -7.7
BASIN TOTALS 4,273 4,387 6,912 -38.2% U.S. GRAND TOTAL 662 636 408 62.3
Source: EIA. Note: Totals may not add, due to rounding. Source: Baker Hughes. Note: State monthly averages may not add up to U.S. total, due to rounding.

World Oil / APRIL 2022 17

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JULY 2019 / DEFINING CONVENTIONAL, SHALE AND OFFSHORE TECHNOLOGY FOR OIL AND GAS / WorldOil.com
JULY 2019

PERMIAN BASIN
TECHNOLOGY
Optimized completion methods
enhance recovery, lower costs
PERMIAN BASIN TECHNOLOGY

UNCONVENTIONAL RESOURCES
Real-time stimulation monitoring improves economics

SAND & PROPPANT SUPPLY ANALYSIS

Ample supply helps operators in volatile market

REGIONAL REPORT: NIGERIA/ANGOLA

Top two producers climbing global E&P ranks
GULF ENERGY INFORMATION

Published by
 SPECIAL FOCUS: OFFSHORE TECHNOLOGY
New system builds on proven technology for reservoir
management to smaller platforms and satellite wells
A new slickline-deployed, memory-based,
cased-hole evaluation system delivers the
same quality data used to identify bypassed
reserves as conventional wireline but without
the higher costs and logistical burdens.
ŝ JON MUSSELMAN, Weatherford
Although oil and gas operators work to extract the maximum
available resources from a reservoir, there will always be more
out there. Pulsed-neutron logging is a proven method to help op-
erators monitor fluid contacts and other reservoir changes to op-
timally manage their production, locate and quantify additional
reserves, and extend the life of mature fields. This technology,
however, has been underutilized in certain offshore environ-
ments, due to cost and logistical challenges.
As a field is developed and placed on production, operators
offset the initial decline with infill drilling. As production con-
tinues, they turn to some form of artificial lift to overcome the re-
duction in reservoir pressure and continue producing the wells.
But as fields mature and the gold-rush days begin to dwindle,
Raptor’s advanced five-detector array helps identify bypassed
reserves.
operators face some complex decisions. Do they simply plug and
abandon existing wells and turn their attention to potential re-
serves in new fields? Many do, but those operators incur the cost
of drilling, completing, and producing brand-new wells. They
will likely have substantial production from those newly tapped
reserves, but risks and costs to get there may be high.
Still, most operators know that there likely are bypassed re-
serves in their existing fields. The only problem is that they don’t
know where those reserves are located. To find them, operators
deploy logging tools to perform a cased-hole evaluation of exist-
ing reservoirs. Typically deployed via wireline, pulsed-neutron
logging detects the presence of oil, water, and gas, enabling op-
erators to make informed decisions about where, and how, to
invest time and technology.
With over 1,800 successful operations globally, Weatherford
leads the industry with field-proven, advanced pulsed-neutron
technology, engineered specifically to deliver accurate reservoir
measurements in a wide range of configurations, often under
challenging wellbore and reservoir conditions. Anchored by a
large five-detector array, Weatherford’s Raptor 2.0 cased-hole
evaluation system combines a high-output pulsed-neutron gen-
erator, four spectroscopy sensors—each containing a lantha-
num-bromide (LaBr3) scintillation detector and a fast-neutron
counter, Fig. 1.
These components, housed in two physical sections—the
measurement unit, including the neutron generator and de-
tector array, and the processing unit that contains the process-
World Oil® / APRIL 2022 19
OFFSHORE TECHNOLOGY

ing and control electronics—enable operators to investigate a CASE STUDIES

larger volume of the reservoir and multiple depths and resolu-
tions for accurate, reliable results. The large detector array also
maximizes gas sensitivity, making it 250% more sensitive than
standard two-detector tools, a result that helps operators, no
matter the environment.
Fig. 1. Raptor 2.0 and Memory Raptor systems help identify
bypassed reserves.
Adriatic Sea. In an offshore gas well where the decline had
reached 90%, an operator wanted to evaluate whether additional
reserves in new intervals were present, which might be opened
to restore production. The reservoir was composed of a series
of thin sandstone layers which had historically been difficult to
resolve with conventional cased-hole logs. The time window to
conduct the logging was limited, due to other operations on the
platform.
Weatherford experts studied the challenge and recommend-
ed the Raptor 2.0 cased-hole evaluation system and its enhanced
gas sensitivity of the large detector array to provide a clear indica-
tion of gas-bearing layers. The team proposed to run the logs in
sigma mode to minimize logging time. The data displayed several
gas indicators, enabling the operator to quickly identify the thin
gas-bearing layers within the reservoir. In this case, thru-tubing
perforating was available to open and test any new intervals. All
logging activities were completed in a single day, allowing other
operations on the platform to continue without interruption.
The interpretation and evaluation services team computed
the gas indicators and recommended perforations among the
newly identified intervals. After perforating, stabilized gas pro-
duction increased by nearly 400%, representing 50% of the origi-
nal rate restored in the sixth year of production. The subsequent
decline rate was less than 10% during the first year, indicating
that new reservoir compartments had been opened. Effective
planning, execution, and data interpretation led to the successful
restoration of gas production.

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20 APRIL 2022 / WorldOil.com
 OFFSHORE TECHNOLOGY

Fig. 2. Smaller platforms and satellite facilities present Fig. 3. Memory Raptor system on the deck of a production
challenges for wireline logging. platform during field trials.

Onshore Mexico. The Raptor 2.0 system also benefitted an op-

erator in Mexico, which started an onshore workover campaign
to evaluate a new interval on an old well. The challenge centered
on understanding the effects of offset production and extensive
water injection among many producing wells.
Weatherford field personnel deployed the cased-hole evalu-
ation system in carbon/oxygen mode, a measurement of the in-
elastic carbon-oxygen and calcium-silicon ratios from the four
detectors to provide basic lithology and oil-water saturation.
Carbon/oxygen mode is not sensitive to water salinity, an advan-
tage in this reservoir, as water injection had changed the salinity
profile throughout the field.
The original logs had indicated the upper part of the forma-
tion should be productive, but the Raptor data showed a sig-
nificant water saturation in this interval. Weatherford engineers
suspected that the prospective interval had been partially swept unit onto the deck.
by offset production and had flooded out, due to the water injec- Conventional wireline logging operations also typically re-
tion. A second, slightly deeper interval, however, had good char- quire three- or four-person crews, with additional offshore re-
acteristics and was successfully recompleted. sources necessary to house and feed them. These factors tend
The operator anticipated a production rate of approximately to limit the application of wireline logging, especially for smaller
55 bopd, yet the Weatherford solution delivered 384 bopd. More- platforms and satellite well locations, and for older facilities with
over, had Weatherford not run the cased-hole log and simply re- limited lift capacity, Fig. 2. As a result, operators often face dif-
completed within the planned interval, the operation would have ficult choices that may mean leaving reserves behind.
failed, and the estimated expenses associated with water shutoff
to repair the well would have been at least $250,000. UPDATED SOLUTION
To address and mitigate these challenges, Weatherford de-
NICHE CHALLENGE veloped the Memory Raptor cased-hole evaluation system. The
The Raptor 2.0 cased-hole evaluation system is deployed Memory Raptor system adds a memory and battery controller,
via wireline. For onshore fields, conventional wireline logging as well as a safety sub to the Raptor downhole tool. These addi-
technology poses few challenges, but in many mature offshore tions provide completely autonomous control of the data acqui-
fields, running wireline technology can be more problematic. sition, enabling the tool to run in memory mode.
Mobilization of wireline equipment adds time and costs for ma- The memory and battery controller provide the same acqui-
rine transportation, and the existing production infrastructure sition functions as the wireline-based surface system electronics,
may not easily accommodate the full-service wireline unit and logging software, and the presence of a field engineer. The con-
other surface equipment required. Moreover, some older facili- troller manages tasks, such as the programming of the logging
ties may have insufficient crane capacity to load the wireline sequence, tool power, generator control, pulse timing, spectral
World Oil® / APRIL 2022 21
OFFSHORE TECHNOLOGY

stabilization, detector gain control, data storage, and safety func-
tions. Crucially, the Memory Raptor system delivers the exact
same data results as the wireline-based Raptor 2.0 system, yet
with substantial advantages to operators who may not be able to
deploy a wireline unit.
In contrast to the challenges, costs, and constraints around
installing a wireline unit, slickline equipment is readily available
in many offshore production environments. Deploying Memory
Raptor on slickline requires only a single engineer using a laptop
computer and a lightweight equipment package, Fig. 3. The rig-
up length of less than 30 ft facilitates pressure control operations
on smaller platforms or when using a portable mast.
Because only one field engineer is needed, the Memory Rap-
tor system reduces the resources necessary to house and feed
multiple crew workers required to operate a full-scale wireline
kit. The reduction in operational complexity means operators
face fewer scheduling challenges when considering the Memory
Raptor system, mitigating disruptions to other operations on a
platform, and minimizing any possibility of interrupting produc-
tion during logging operations.
The benefits of the compact footprint extend to other envi-
ronmental impacts as well, generating reductions in risk expo-
sure, energy, emissions, and waste. Fewer crane operations are
necessary with the Memory Raptor system, reducing personnel
risks and lowering emissions and energy usage. And, with small-
er vessels sufficient for marine transportation, operators save en-
ergy and reduce carbon emissions. Just like the wireline-based
Raptor 2.0 system, the Memory Raptor system acquires data in
the same three modes: sigma, carbon/oxygen, and n-vision. To
speed up the logging activity, the data can be downloaded in the
field, reducing the operational time and cost required for con-
ventional cased-hole evaluation.
VALUE DELIVERED
Maximizing production and optimizing recovery from ex-
isting offshore assets is a segment of the oil and gas industry
that will continue to grow in this decade. As such, it becomes
vital to monitor reservoir changes, identify bypassed reserves,
and perform completion and production diagnostics to man-
age production for optimal recovery. Conventionally, wireline-
based cased-hole evaluations performed these functions, but
they came with a higher cost and a greater planning and logistics
burden. With the introduction of the advanced Memory Raptor
system, operators can manage their offshore assets in a more ef-
ficient and cost-effective manner, with quality identical to that
of wireline logging.
JON MUSSELMAN is the global product line manager
for cased-hole wireline services at Weatherford, based
in Houston, Texas. He is responsible for global cased-
hole business strategy, technology development,
and supporting operations teams around the world.
He brings over 40 years of industry experience to the
role and has a special interest in utilizing cased-hole
formation evaluation, production logging and well integrity
measurements to support well performance improvement through
intervention and well services campaigns. Mr. Musselman is a member
of SPE and SPWLA and has authored papers on electrical imaging
and NMR interpretation, as well as pulsed-neutron technologies.

For 40 years, GEOLOG has continually evolved

to serve our customers with the most cost
effective and sustainable advanced solutions
for drilling optimisation and reservoir
evaluation

Our Formation Evaluation services utilise non-intrusive

techniques to achieve quantitative results and interpretation

www.geolog.com

22 APRIL 2022 / WorldOil.com

Streamlining liquid mud plants:
Sustainability from the ground up
Operators and service
companies continue to
implement new ESG
initiatives. One provider is
focusing more attention on
operations at liquid mud
plants to reduce, reuse
and repurpose materials.
The goal is to diminish the
environmental footprint
and promote operational
efficiencies.
ŝ DEREK MACKAY, MUKESH KAPILA and
ROBBIE SIGNORELLI, Halliburton
The oil and gas industry plays a key
role in providing the affordable and re-
liable energy essential for economic
growth, employment, education, eradi-
Liquid mud plant servicing the GOM
at Port Fourchon, La.
SPECIAL FOCUS: OFFSHORE TECHNOLOGY
cation of poverty and global health.
However, the industry must couple its
actions around climate change and water
conservation to the need for supporting
a growing global population’s demand
for energy.
Significant progress is expected from
research and development (R&D) ex-
penditures made with these specific goals
in mind, but impactful gains can be made
quickly if sustainability concepts are ap-
plied directly to ongoing operations.
There are clear and measurable im-
provements to be made across the drill-
ing and production value chain. Routine
field activities and facilities that have
been taken for granted for decades can
be effective drivers of positive environ-
mental change.
THE 3R’S
As an example, the time-tested liquid
mud plant (LMP), always there to support
drilling and completion operations, is the
perfect candidate for a “3R” overhaul.
Reduce. The widespread use of non-
aqueous fluids (NAF) has engendered nu-
merous fluid recovery techniques. Some
of these can be accomplished with mobile
units at the rig site, but the LMP remains
the centerpiece of fluid recovery, solids
separation and preparation of “new” mud
systems for the next wells in line.
To accomplish this, the typical LMP
comprises multiple mixing tanks and fluid
storage options. A large, busy stockpoint
may have thousands of bbl of various flu-
ids stored in purpose-built tanks. A well-
run LMP must operate on two critical
principles: 1) reduce disposal volumes;
and 2) reduce dilution requirements.
Reuse. One of the chief benefits of NAF
systems is their longevity. With proper
conditioning and reconditioning, a NAF
may be shipped in and out of the LMP to
dozens of wells. Density adjustments can
be simplified by blending with differing
properties. The blended systems can be
processed to meet most operator specifi-
cations. The industry’s paradigm shift to
large-scale shale drilling also plays a part
in how efficiently drilling fluids can be
World Oil® / APRIL 2022 23
OFFSHORE TECHNOLOGY
reused. If the well is destined for a shale
frac job, the operator often relaxes the
LGS percentage specification, because
near-wellbore formation damage is no
longer a critical factor. The high rates of
penetration delivered by an NAF help re-
duce drilling days, and the availability of
rig-ready feedstock at the LMP makes it
easy to move to the next well in the batch
with no downtime.
Likewise, water recovered from
water-based fluid (WBF) can be used
as wash water or added to many types
of drilling fluid (water phase for NAF,
base fluid for WBF), or it can be used
to formulate some completion fluids.
Thoughtful reuse helps reduce overall
consumption of fluid components. Re-
ducing consumption means fewer orders
to suppliers, less material transported
over the road or sea, less dependency on
storage tanks that require lighting, main-
tenance and fluid agitation, and a smaller
environmental footprint reaching from
the point of sale to the original manufac-
turer. These positive changes may seem
small and incremental at best, but the
scope of drilling operations worldwide
24 APRIL 2022 / WorldOil.com
guarantees that the cumulative effect is
significant and measurable.
Repurpose. A spent fluid system is not
repurposed easily. Disposal seems nec-
essary at the end of the fluid life cycle.
Wash water from tank cleaning is a good
example, as are WBFs that are no longer
in spec for sensitive wellbores and will
not hold up well in storage. However, a
well-equipped LMP can help transform
these “waste” fluids into the key compo-
nents in other pumping and circulation
activities, where a sizable volume of fluid
is necessary, and fluid quality is less criti-
cal. These crossover applications extend
the usefulness of the fluid and help re-
duce disposal volumes in the long run.
Optimizing LMPs for the 3Rs. Lean
operations naturally foster greater effi-
ciencies, often well beyond the original
objectives. Consistency, standardiza-
tion and continuous improvement are
the subsets of an efficient plant. What
may start out as a sensible cost-saving
effort in fluid management—such as
blending fluids to achieve density tar-
gets—can also deliver repeatable gains
in sustainability.
To make these gains, Halliburton
recently launched an LMP assessment
initiative that encompasses multiple fa-
cilities around the globe, each with its
own unique set of conditions. A five-
stage process is applied to each candi-
date LMP, beginning with the selection
criteria and ending with measurable
results, Fig. 1.
CANDIDATE SELECTION
In this assessment, the top candidates
among LMPs are sited in various loca-
tions around the world, Fig. 2. Selection
is based on operations and capabilities,
rather than proximity to major industry
centers. In fact, some plants are very re-
mote or operate near residential areas,
and this can heighten the importance of
a positive impact on local communities
and sustainability. The essential traits in-
clude the following:
• Large volume of NAF throughput
/ return due to the intrinsic
reusability of these systems
• Strong demand for high-value
 OFFSHORE TECHNOLOGY

base oil systems

• Frequent handling of high-value Fig. 1. Overview of LMP optimization process.
brines in certain locations.
This does not exclude conventional
diesel-based NAFs as good candidates
for reuse and blending operations, even
though the cost per barrel (bbl) is low
by comparison to the “designer” fluids
used in deep water and other complex
wellbores. Likewise, WBFs need con-
sideration when it comes to reuse and
repurposing. Although these fluids are
certainly not as durable as NAFs, the
LMP optimization plan includes look-
ing for ways to “3R” all fluids to the
extent possible. Fig. 2. Vessel Hannah Kristina serving seven LMPs along the Norwegian coastline.

Data capture. Given the variability

among LMPs and their respective ca-
pabilities, settling on an “always appli-
cable” data set is possible only for cer-
tain metrics that provide insights into
possible replacement materials and/or
alternative packaging that can reduce
the environmental footprint. Another
part of the analysis focuses on the use
of solids removal technologies to signifi-
cantly improve fluid reusability, and this
is compared to the costs and inventory
management issues raised by dilution/
disposal options. The knock-on effects
can ripple through the supply chain and
have an overall result of less waste, less
energy consumption and less risk to
sustainability. These outcomes translate
to fewer emissions, which is part of the
company’s commitment to establishing which helped reduce inventory by over FINAL THOUGHTS
viable ESG targets. 34,000 bbl and helped prevent some of While the industry is making sig-
the emissions typically associated with nificant R&D investments to drive en-
Implementation. Halliburton deploys the manufacture, transfer and mixing of vironmental performance, technology
a small team of subject matter experts to new fluids and their components. development takes time, and many in-
evaluate each LMP. This group includes The innovative equipment used to novations will require significant capital
operations managers, equipment cham- make this happen cannot be overlooked: to scale. Instead of waiting, much can be
pions and information technology spe- • High-performance centrifuges done now to drive immediate impact.
cialists, among others. New workflows are configured in parallel to Ensuring our progress in sustainabil-
and purpose-built spreadsheets help process an average 60,000 bbl ity can begin with a hard look at some of
the team organize data extracted from per month at major LMPs. the most mundane operations. Instead
various sources. No two LMPs have • Advanced solids separation units of dealing with acres of tanks filled with
identical conditions, and the types and can be installed anywhere to “hurry up and wait” fluids, LMP manag-
extent of improvements can vary. How- produce a low-solids pre-mix mud ers are now proactively cleaning, blend-
ever, it’s a strong and essential first step for blending, and the dried solids ing and reusing all possible feedstock.
to what becomes habitual environmental can be used as material for treating This helps ensure an ample supply dur-
conservation. non-critical fluids, Fig. 3. ing periods of high activity and helps
• High-efficiency mixing devices minimize the negative impact of excess
Results. Halliburton can facilitate ensure that NAF systems are rig- inventory during a downturn. They are
the 3Rs at its LMPs, at the rigsite and ready when they leave the LMP, tracking reductions and calculating en-
throughout the network of manufac- which helps eliminate rig time vironmental gains throughout the fluid
ture, packaging, transportation and fi- spent on conditioning the fluid life cycle and following up with con-
nal disposal. Following the 3R strategy, and results in lower, less-costly tinuous improvement steps wherever
Halliburton has decreased purchases energy consumption. appropriate.
World Oil® / APRIL 2022 25
OFFSHORE TECHNOLOGY

To date, this 3R process has been
implemented successfully at ten LMPs
around the world. The goal is to evaluate
and optimize six to eight facilities each
year, going forward. This is a “ground
Fig. 3. High-G centrifuge used to separate and recover dual-weight drilling fluids.
up” movement that incorporates person-
nel on the front line and allows them to
be the faces of industry’s commitment to
greater environmental responsibility. In
any case, it’s a great place to start!
DEREK MACKAY is global product manager
for Baroid Separation Solutions. He has 30
years of industry experience, and spent
the first half of his career in drilling fluids
before focusing on solids control and waste
management in field, operational, technical
and product management positions in Europe,
North America, MENA and sub-Sahara Africa.
MUKESH KAPILA is chemical engineer
and entrepreneur since 1985. In one of the
business exits, he sold an environmental
technology to Schlumberger, where he worked
as a business manager and engineering
director. Mr. Kapila also has served as
strategic business manager for Baroid. He
has been issued 19 patents plus four pending,
in addition to authoring 14 peer-reviewed
publications. He is a professional engineer and
received an advanced certificate in executive
management, innovation and technology from
the Massachusetts Institute of Technology
Sloan School of Management.

ROBBIE SIGNORELLI is the liquid mud

manager for the Halliburton/Baroid GOM
region. He started with Halliburton in 2000
as a mud engineer. In 2008, he moved into
a role of technical professional with some
sales duties. He was eventually promoted to
operations leader for the Lafayette, La., office
and prior to his current role was promoted
to Baroid laboratory manager, overseeing all
testing for drilling, completions and reservoir
Dril-N Fluids in the Halliburton Broussard, La.,
GOM regional laboratory. Mr. Signorelli holds a
BS degree in business administration.

Register for FREE at WorldOil.com/Webcasts

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How to Achieve Enterprise-Scale Innovation in Energy: Director Corporate
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in the world economy this decade, face the innovation dilemma—how do you achieve Schlumberger
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real-world solutions to the energy dual challenge, with examples of highly-successful
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Maddy McCarty
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26 APRIL 2022 / WorldOil.com

Technologies to enable subsea electrification
for a topside free environment
All-electric systems are
vital for the future of subsea
operations in the energy
transition.
ŝ MATT LAMB, Baker Hughes SPS systems
Electrification, all around. That’s cer-
tainly how it looks and feels, in our day-
to-day lives, and within certain spheres
of the subsea oil and gas industry, too.
There’s a good reason for all that talk. The
use of electrified subsea control systems
instead of hydraulic equivalents can con-
tribute to solving some of the most press-
ing issues facing operators today; namely
lower OPEX, minimal CAPEX, and a
significant reduction in the carbon inten-
sity of operations, in order to improve our
blue economy.
Away from hydraulics. The subsea
electrification conversation is not just
about removing significant hydraulics
from subsea infrastructure—more about
that later. But when zooming in on hy-
draulic removal, in effect we take the ba-
sic principles of electrohydraulic-control
(EMUX) subsea systems that are cur-
rently used for instrumentation, and low-
power controls, but boost their power to
provide primary-drive to perform more
intense tasks, such as opening or closing
major valves.
Benefits can be realized from simply
changing some of the functions from hy-
draulic to electric. Removing hydraulics
from the manifold offers a significant
reduction in CAPEX; electrifying the
choke valve can provide much-finer con-
trol to enhance production; and utilizing
closed-loop self-contained valves on gas
lift or carbon-capture utilization and stor-
age applications can give greater control
of the injection fluids, reducing OPEX.
By simply taking out the hydraulics,
the new electric systems also take out a
SPECIAL FOCUS: OFFSHORE TECHNOLOGY
lot of the high-grade stainless steel from
manufacturing, transportation, installa-
tion and operation of subsea umbilicals.
Lighter-weight pipes with less low-pres-
sure/high-pressure redundancy strip out
both costs and carbon emissions from
greenfield sites.
When the volume of piping is reduced,
so is the need to distribute and manage it
through the manifold, as well as demand
for auxiliary equipment like hydraulic
stab plates. Operators can go further and
deeper—and with longer offsets—for
less outlay than traditional hydraulic con-
trols have allowed to date.
Interest picks up. This technology is
not new. The first subsea electric tree was
built back in 1994 by Vetco Gray (now
part of Baker Hughes), although this was
never installed. The first installation oc-
curred in 2006, and it has been the topic
of discussion since the early 1990s—al-
beit within much smaller industry circles.
In the following years, it barely gained any
traction, due to the industry’s lack of ap-
petite to take risks on new technology—
until now. Having stuttered along a path
of almost imperceptible acceptance, sub-
sea electrification is experiencing a sud-
den exponential growth in interest and
engagement. This is due to requirements
in areas such as:
• The use of electric actuators
on compression stations where
hydraulics were not available.
• Chemical injection metering
valves, using electric motors
with a great track record.
• The retrofitting of electric actuators
to operate what were ROV-operated
valves on manifolds, Fig. 1.
Together, all of these incremental steps
have reduced the risk profile of subsea
electrification perceived by the industry.
Companies, such as TotalEnergies, have
announced their ambition to make all
new systems electrified, and Equinor has
made similar commitments that it will be
electrified by 2023.
The number of fully funded joint
ventures and multi-million-dollar invest-
ments being announced suggests that
they are not alone in appreciating the pos-
sibilities of subsea electrification and its
potential to help meet current concerns
of the industry and its wider stakeholders.
Designers of industry specifications have
already started to issue “all-electric” regu-
lations, requirements, documents and in-
dustry standards to adopt. The American
Petroleum Institute committee has prom-
ised to release drafts in the near future.
Gathering evidence. At Baker Hughes,
we believe that subsea electrification de-
livers on operators’ key concerns when
it comes to capital, operating and car-
bon costs, and that the time is right for
this technology to enter the mainstream.
Nonetheless, the business case is not al-
ways clear to all operators, and it needs
to be stated robustly: no new technology
can be introduced without the necessary
evidence—especially safety and reliabil-
ity—behind it, even when the general
opinion appears to have embraced it.
So, we undertook to investigate and
thoroughly analyze the potential savings
available, as well as the ways in which op-
erations could be optimized, when using
electrified control system technologies
instead of a conventional, electro-hy-
draulic approach. And rather than pick-
ing a site that was already known to be an
Fig. 1. Aptara manifold, electrified with
ball valve with the low power rotary
electric actuator.
World Oil® / APRIL 2022 27
OFFSHORE TECHNOLOGY
Fig. 2. Example future topside-free and
umbilical-free system with at source
renewables.
optimal location for electric systems, we
worked with partners to select a site that
would be a credible example of a more
typical subsea installation. The chosen
site was the SNEPCO Bonga Main field,
Nigeria’s first 1,000-m-plus, deepwater
development, which has been producing
oil and gas since 2005.
The study comprised a single produc-
tion loop within part of Bonga Main field.
It encompasses two production mani-
folds, and associated wells, control system
and water-injection wells. The hypotheti-
cal project was assessed, as it would be for
a new subsea electrified system, with real-
world specifications and costings—and
the results were conclusive.
CAPEX savings. Extensive analysis
showed a 9% saving in subsea hardware
costs at system level. Those savings
come from several sources: for example,
the costs of umbilical systems were 30%
lower with electric systems, and control
systems were 24% lower, as was testing.
The slight increase (less than 1%) in the
cost of subsea production tree systems
was easily offset by savings in wellhead
systems, structures, distribution sys-
tems, intervention and tooling. There is
no doubt that, in terms of CAPEX, the
subsea electric system handily beats tra-
ditional hydraulics.
Calculating operational costs is less
straightforward, given the variables in-
volved. Nonetheless, the study shows
that the main benefit of using the elec-
tric approach is that start-up times for
trees are significantly reduced. Drawing
power from local energy storage modules
(ESMs) for valve operations allows mul-
tiple trees to be opened simultaneously,
which could enable operators to restart
systems in much less time, compared to
the conventional approach. Interestingly,
those start-up times are lower than what
28 APRIL 2022 / WorldOil.com
is often practical, desirable or safe: a case
of modelling outperforming reality, and
something that operators will need to
consider when weighing up the benefits
for their own fields.
Operational benefits. The study also
indicates other areas in which the re-
moval of high-pressure fluid systems and
rotating machine parts of the hydraulic
power unit (HPU) can deliver notable
benefits to operators. Firstly, system
availability is likely to improve, as repair
demand goes down. Additionally, as hy-
draulic systems tend to be one of the main
causes of downtime in subsea systems,
the potential is there to significantly im-
prove production availability. In addition,
operators can reduce leakage pathways
and marine operations—along with the
risk of incorrect or faulty installation. All
of which suggest reduced OPEX and in-
creased production availability.
Operators can also expect to see in-
spection, maintenance and access re-
quirements go down, reducing staffing
requirements for interventions, especially
in hazardous areas. Finally, removing the
HPU and associated fluid systems also
removes fluid releases and their environ-
mental impacts, both topside and subsea.
Clearly on the other side, subsea insula-
tion resistance reduction in electrical
systems is also a concern, and the quali-
fication and testing of the electrical con-
nectors needs to be managed closely.
Fit for the future. Finally, the report
looked at how the advantages of subsea
electrification can be enhanced further by
digital tools that deliver data access, visu-
alization, monitoring, and diagnostics and
prognostics, and which pave the way to
more predictive maintenance. All these
actionable insights that digital infrastruc-
ture offers would also be available on sub-
sea electrified systems. Not only does this
improve availability of the system, and
support de-staffed, autonomous opera-
tions, it enables future-focused decision-
making to support the longevity and sus-
tainability of the overall subsea system.
For operators, facing tight margins, a
changing investment landscape, an im-
minent skills shortage and unprecedent-
ed political scrutiny, there is little room
for experimentation. Equally, there is
little future in business as usual. Caught
between these opposing pressures, op-
erators and their providers need to think
differently—and they need the evidence
to support that. The evidence is now in
on subsea electrification. And it’s irresist-
ible: subsea electrification is the future.
Transition to energy frontiers with
all-electric. We at Baker Hughes view
all-electric technologies expansion as a
critical-enabler for real step-change in
cost, blue-economy consciousness, and
trust and interdependency from system
intelligences. Furthermore, we perceive
the all-electric system as a central part of
the tapestry for the Baker Hughes energy-
frontier horizon transition, too.
We have ventured to look beyond this
electrified core, to a true, full-electric sys-
tem offering, removing all chemical injec-
tion topside, any subsea HPUs, and utiliz-
ing electric surface-controlled subsurface
safety valves (eSCSSVs). By stepping into
an operational world where there are zero
hydraulics, and a higher dependency on
electrical power, the role of the tethered,
traditional umbilical systems and topside
platform comes more heavily into focus,
especially for long-offset and deepwater
applications.
Uniting other leading peripheral tech-
nology developments and supporting ca-
pabilities, renewable power-generation at
source, connectors, and communication
protocols, we vehemently believe that the
zenith of an all-electric, truly topside free
system is no longer the stuff of “dreams
and science-fiction” but is within reach
with today’s technologies, Fig. 2. This en-
ablement is the genesis to laying out the
possibilities of reconfiguring common
system elements to service the energy
frontiers that lay just beyond the hydro-
carbon horizon.
MATT LAMB is the SPS
systems product manager for
deepwater, long-offset and
all-electric applications. He is
responsible for shaping and
delivering cohesive and
innovative multi-generation
system strategies for the company to
sustainably answer current, adjacent and
frontier energy market needs. Previous posts
for Baker Hughes included leadership roles in
supply chain, operations/manufacturing and
program director positions. His sector
experience spans six years, his previous 11
years in aerospace, having formally delivered
in several manufacturing and customers facing
roles within Rolls-Royce aero engines and GE
Aviation, and most recently as a consultant in
business management and strategic change.
Mr. Lamb earned a first-class honors degree in
engineering and holds charterships in both
engineering and leadership disciplines.
 SPECIAL FOCUS: OFFSHORE TECHNOLOGY

Real-time operations center drives new ESG

opportunities by integrating personnel and data
An integrated platform, continuous data streaming from
incorporating data from the rig to the office.
multiple systems that are • Model preparation, such as
building torque-drag and surge
accessible to a real-time
and swab models.
operations center and field • Operation surveillance, to
personnel, produces a detect dysfunctions and alert
comprehensive model the rig crew, based on certain
of a company’s ecosystem. communication protocols.
The innovative combination Since 2010, the new development of
results in safer, more digital transformation and process auto-
mation has enabled the industry to ex-
reliable operations with
pand the RTOC role from strictly remote
less downtime. monitoring to remote operations and
other responsibilities. Beyond remote
monitoring, the RTOC can work more
effectively with rig operations, as well as
support Environmental, Social, and Gov-
ernance (ESG) efforts through the inte-
gration of systems and technology.
By using an integrated platform, such
as Parker Wellbore’s Automated Digi-
tal Analytic Platform™ (ADAPT), data
from multiple systems is accessible to
the RTOC and Operations. Data from
systems—such as the rig’s EDR, the rig’s
engines, assets management system and
computerized maintenance management
system (CMMS), enterprise resource
planning (ERP) system, knowledge base/

ŝ DR. LEI WANG and CHRIS STEWART, Fig. 1. Clustering analysis for fuel consumption vs. daily footage shows the least-efficient
Parker Wellbore zone in a red ellipse, sub-optimal zone in an orange rectangle, and a data quality issue
zone in a blue circle.

Fuel vs. daily footage

A real-time operations center (RTOC)
is not a new concept to the industry. Start- 30K
ing in the early 1990s, several major com-
panies built data information centers to
compile daily drilling reports via fax. In
the early 2000s, with the rapid develop- 25K
ment of the internet and wide adoption of
drilling data protocols such as WITSML,
many operators and rig contractors were
able to remotely view the rig operations 20K
via electronic drilling recorder (EDR)
sensor data and daily rig reports.
Daily fuel, liter

The RTOC initially played more of a

remote monitoring role instead of inter-
15K
facing with rig operations directly. One of
the reasons is that well construction is a
complicated process. A significant amount
of rig information and data have still not
fully streamed to the remote office. It is 10K
believed that operational decisions should
be made at the rig site, as onsite personnel
have first-hand information and have the
physical ability to respond, as needed. 5K
Essentially, it is more difficult for office
staff to make the decision remotely with
limited information and data streaming to
the RTOC and then communicate actions 0K
to the rig site. The main initial responsi- 0 500 1,000 1,500
bilities of RTOC include: Daily footage, feet
• Data management, to ensure
World Oil® / APRIL 2022 29
OFFSHORE TECHNOLOGY

lessons learned data, and engineering/
drilling model data—allow a unified and
coherent picture of the entire company’s
ecosystem. Having all these data at the
fingertips of the RTOC and rig site per-
sonnel enables for more efficient support
from the RTOC and safer, more reliable
operations with less downtime.
Fig. 2. This rig operation breakdown indicates Well 2 had 60% less reaming and 41% less
circulation, resulting in an 82% reduction in general problems (NPT), compared to Well 1.
Rig time breakdown per well
Well 1
143 76 41
Well 2 37 164 30 24
0 100 200 300
Hours
Moreover, having direct communica- technology, coupled with the RTOC, can
tion via technology—such as mixed real- provide the solution. Along those lines,
ity devices between the RTOC and rig site we see the following two promising trends
personnel—allows for a smaller technical for the upcoming RTOC development.
workforce. Given the restrictions on trav-
elling experienced during Covid and the Remote operations to increase
shrinking pool of qualified new personnel competitive edge. Directional drilling
available and willing to work offshore, this (DD) is probably the first rig operation
transferred into the RTOC as part of the
remote operation initiatives. For example,
a major operator can support multiple DD
Rig Release – move/skid – spud in operations in the Permian basin from its
Drilling actual Houston RTOC center. The initial suc-
Reaming cess demonstrated with the firm’s land
Coring rigs shows significant potential to expand
Circulate hole clean to offshore rigs. The value includes reduc-
Trip tions
Rig Release – move/skid – spud in in personnel onboard (POB) and
141 84 33 49
Lubricate rig costs, in addition to quality and consis-
Drilling actual
Repair rig (NPT) tency improvement.
Cut drilling line
Reaming The pandemic has changed the way in
Wire line logs which we work and how we conduct our
Run casing andCoring
cement lives in a variety of ways. However, one of
90 74 30 Wait on cement/WOC
Circulate hole clean the positive Covid effects is to mandate
Nipple up/down BOPs more remote operations. Besides drilling
Test BOP Trip operations, rig maintenance work holds
Plug back potential for remote operational sup-
Lubricate rig
Fishing port. With capabilities to capture vital
400 500 600
General/other problem
Repair rig (NPT) equipment data in real time, the RTOC

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LIVE WEBCAST: Industry Manager-
Thursday, May 5, 2022 | 10 a.m. CDT / 4 p.m. BST Drilling & Completions
Caterpillar, Inc.
ESG in the Spotlight: Benefits of System Integration
Across the Oilfield SPEAKER:
Mark D. Anderson
Solutions today, for the oilfield of tomorrow. With a range of solution & services, and carbon
Product Strategy and
reduction technology, Caterpillar continues to foster relationships with customers and support
Definition Manager
their operations with efficient, fuel flexible, end-to-end optimized solutions. Join experts from
Caterpillar, Inc.
Caterpillar Oil & Gas as they discuss how the company is leveraging technologies, products, and
solutions to deliver Environmental Social Governance (ESG) benefits for the industry.

• Providing Simple End-to-End Solutions to Customers SPEAKER:

• Enabling New Power Generation Solutions Andy Publes
• Lowering Costs & Emissions Through Optimization & Automation Controls Systems
• Providing Flexibility to Integrate with Future Technologies Sr. Team Lead
Caterpillar, Inc.
Listen and learn in this exciting webinar as industry experts talk about how together, we can tackle
any challenge.
MODERATOR:
Sponsored By: Presented By: Kurt Abraham
Editor-in-Chief
and Chief Forecaster
World Oil
30 APRIL 2022 / WorldOil.com

becomes a major support arm for main-
tenance efforts across global operations.
From the start, safety operation windows
and smart alarms can be set to alert the
RTOC and maintenance teams, when a
certain parameter falls or rises to a critical
level. As more data are gathered, models
can be developed, using artificial intel-
ligence (AI) and machine learning (ML)
for predictive failure analytics. By captur-
ing this type of data, the RTOC can not
only support drilling optimization, but
also the performance of rig equipment.
Recent developments in wearable tech-
nology, such as Microsoft HoloLens and
RealWear, allow for more efficient remote
collaboration with subject matter experts
all across the globe. Whether completing
routine maintenance or addressing a criti-
cal issue in operations, these devices can
quickly, and effectively, connect the end-
user with a remote expert in the RTOC
to support in the process. Beyond remote
collaboration, workflow procedures and
assessment checklists can be developed
onto the devices, to allow for a technician
to have virtual instructions and docu-
mentation available, hands-free for use on
the task.
These new, wearable, mixed reality de-
vices, such as Microsoft HoloLens and Re-
alWear, can be used in hazardous locations
(HoloLens Zone2 and RealWear Zone 1)
and, as in the case of RealWear, be affixed
to a hard hat. RealWear may hold more
potential than HoloLens to our industry,
due to the device design. The RealWear
devices allow the user to continue to have
a natural view of the world, with an adjust-
able eye piece that gives them access to
digital data. These data include drawings,
solid models of equipment, work instruc-
tions or procedures, and many other data
types. With the capability of these devices
to provide two-way video and audio, the
local user (technician on a rig for example)
can work directly in real time with an SME
in the RTOC or other support center.
As offshore technology advances, it re-
quires local maintenance and operational
personnel to continually evolve their skill
sets to maintain and use the equipment.
This poses challenges, due to a large por-
tion of the offshore workforce retiring re-
cently and/or in the next few years. With
few offshore personnel available to recruit
(i.e., those willing to work under existing
conditions) it is becoming more impera-
tive to have technology that connects indi-
viduals offshore to a pool of collective ex-
perts onshore. This reduces the rig’s POB,
operating costs, and the need to retrain or
recruit higher-skilled offshore personnel.
Potential applications for mixed reality
devices with RTOC support can include
things like operational support for tubu-
lar running services (TRS); new services
or crews; rig maintenance work for equip-
ment, such as top drives, mud pumps and
BOPs; HSE reporting and investigation;
and rig condition assessments.
Notwithstanding the many benefits of
this technology, there are some challeng-
es that must be considered and overcome.
These can include training and integra-
tion with existing workflows and network
infrastructure. The latter requires WIFI at
the local rig site, which, in today’s offshore
world, is generally available; however, the
bandwidth is typically the biggest prob-
lem to overcome. In some instances, a
portable cellular network device may be
used in some areas.
Overall, the cost of additional band-
width is outweighed by the reduction in
personnel costs and the increased perfor-
mance and efficiency of the operation.
Moreover, this technology creates the re-
quired infrastructure to support ESG ef-
forts, specifically around greenhouse gas
(GHG) emissions.
Optimizing efficiency with data
analytics. As one of the main sources
of GHG emissions at a rig site, diesel fuel
consumption or generator set (GenSet)
data have been logged for many years.
Due to the lack of automation in digital in-
frastructure, these data had not been fully
utilized for carbon reduction.
Historically, the daily diesel fuel data
were recorded manually in a spreadsheet,
Fig. 3. The optimization process saved 16,000 gal of diesel fuel or the equivalent of
358,000 lb of CO2 reduction, because Well 2 required less reaming and circulating.
0K
1K
2K
3K
Depth, feet
4K
5K
Well 1
Well 2
6K
7K
0 5 10
Rig days
OFFSHORE TECHNOLOGY
with static charts showing cumulative
sum and fluctuation over a certain period.
To push the usage of fuel data beyond
bookkeeping, we must integrate daily fuel
consumption data with the daily drilling
report by joining both data sets in date/
time. This not only allows monitoring of
the fuel consumption, but more impor-
tantly, it also quantifies the fuel consump-
tion for each drilling operation.
To better automate data collection
and enable advanced analytics, Parker
Wellbore initiated a cloud-based Automat-
ed Digital Analytic Platform (ADAPT)
to build an all-inclusive modern data
platform. This includes drilling data,
key performance indicators, reports, rig
equipment data, maintenance data and, of
course, diesel fuel consumption data. This
platform allows us to not only monitor fuel
consumption, but to also quantify the fuel
consumption for each drilling operation.
Once these data are integrated into a
platform such as ADAPT, they can be ana-
lyzed and then visualized in such a way as
to provide valuable insight into the RTOC
and, thus, rig site personnel. This can en-
able more efficient drilling operations, re-
ducing fuel consumption and subsequent-
ly providing a carbon reduction benefit.
This benefit is, however, easier said
than done. As a real-world example of
how this can be achieved, we gathered fuel
consumption data from one of our oper-
ating rigs. For these specific field trials, it
shows that rig engines use about 55% of
total diesel, making them the top consum-
er amongst rig equipment. Although this
is probably quite intuitive, what it doesn’t
immediately tell you is “why.” Is there a
specific drilling operation that drives the
increase in fuel consumption; is it a char-
304K liters
243K liters
108K
77K Party A fuel usage
Others
197K 166K
Well 1 Well 2
5-Rig-Day diesel fuel yields
61K liters (16k gal.) fuel reduction
162 tonnes (358k lb.) CO2 avoided and saved*
*22.28 lb. of CO2 are produced by burning 1 gal of
15 20 diesel fuel per EIA
5 days faster
World Oil® / APRIL 2022 31
OFFSHORE TECHNOLOGY

acteristic of this specific geological forma-
tion; could it be a faulty engine compo-
nent; or is it something else? This begs
the question of how to find the main con-
tributors among different drilling phases.
To address this question, drilling data
must be synchronized with fuel consump-
tion. During these field trials we found the
following observations:
• The total amount of daily fuel
consumption varies with different
operations. As the rig power source,
the rig generator set is always on.
• Tripping and casing running
operations consume the least diesel.
• Drilling (i.e., increasing the depth of
the wellbore) consumes more fuel
than other operations.
• Reaming and hole cleaning
circulation is the second-greatest
diesel fuel-consuming operation,
which is lower than drilling but
higher than other rig operations.
Other ways are needed to further
verify the last observation, since reaming
and hole cleaning circulation are typically
followed by lower fuel-consuming opera-
tions, such as tripping and casing running.
To tackle this challenge, data from six off-
set wells were processed, and then a scat-
ter plot was created, showing a correlation
between daily footage drilled vs. daily die-
sel consumption, Fig. 1. The gray color in-
tensity represents different wells, and the
rig operation associated with each data
point is added as a tool-tip string. Then
a machine learning algorithm clusters the
data into the following three zones:
Least efficient zone is marked with a
red dashed ellipse. Most rig operations in
this zone are confirmed as reaming or hole
cleaning circulation, which consumes a
lot of diesel fuel in the range of 15,000
to 27,000 liters/day. Yet, it increases the
depth of the wellbore at a rate of under
500 ft/day.
Sub-optimal zone is marked with an or-
ange dashed rectangle. The daily fuel con-
sumption increases nearly linearly with
daily footage drilled, but with a variation
of 10,000 liters/day. The lower bound-
ary of this zone may be considered as an
optimal line (marked with a green arrow),
with a slope of 14 liters/ft, which repre-
sent the highest drilling efficiency of that
rig at a rate of 0.07 ft/liter.
The slope of any data point on Fig. 1
is defined as fuel per foot (FPF), repre-
senting the volume of diesel consumed
per one foot drilled. FPF is similar to the
concept of mechanical specific energy
(MSE), which is commonly used in the
industry. The difference is that MSE does
not consider energy loss due to rig engine
efficiency and other energy consump-
tions (drilling fluid circulation, lifting drill
pipes, making connection).
Conversely, FPF measures all the ener-
gy spent via diesel consumption for every
foot of hole drilled. The optimal FPF may
not be comparable to other rigs, because
it depends on many factors, such as rock
strength, wellbore/hole size, drillstring
design, bit selection et.al. Therefore, for
a batch drilling rig with similar well path,
drillstring design, and formations, optimiz-
ing drilling operations and upgrading rig
equipment will improve the optimal FPF.
Data quality issue zone, which is
marked with a blue dashed circle. Those
two outliers with extremely high daily

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World Oil

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32 APRIL 2022 / WorldOil.com

footage and low diesel consumption are
due to bottomhole assembly tripping in
re-drills. The daily drilling report acciden-
tally categorized the tripping operation
as drilling, by using bit depth as wellbore
depth. Both data points are not considered
in the analysis but are still shown here to
indicate the importance of data quality.
The clustering analysis reveals the fol-
lowing insights:
Reduce unnecessary reaming and
hole cleaning circulation operations
to condense the least efficient zone,
Fig. 1. The rig crew may treat reaming
and circulation as operational insurance
for hole cleaning and tend to over-ream
or over-circulate. This analysis quantifies
the fuel consumption of these operations
and triggers a conversation with drilling
engineers about the feasibility of reduc-
ing the frequency and duration of ream-
ing or circulation operations. In the past,
we talked about reducing back reaming,
merely focusing on extending the reliabil-
ity of downhole tools, and now this study
reveals the environmental benefit of re-
ducing back reaming.
Know your rig limits in terms of fuel
reduction. The slope of the green arrow
or the optimal FPF indicates the most ef-
ficient drilling converting diesel into foot-
age, Fig. 1. Any drilling optimization or
redesign may compress the sub-optimal
zone and still yield incremental fuel reduc-
tion. To further improve FPF, other equip-
ment or energy sources may be introduced,
such as providing the utility power line to
the rig site and a generator set with intelli-
gent power management. Additionally, the
low-side and high-side limits of FPF may
help us better estimate fuel consumption
and manage the carbon footprint.
Finally, how do we achieve the most
efficient day with the least fuel con-
sumption? Figure 1 may indicate two
directions for fuel reduction. One is to re-
duce reaming and circulation operations.
The other is to compress the sub-optimal
zone. To make drilling stay on, or close,
to the green optimal line, analysts need to
work with engineers and rig crews to sur-
mise the engineering solutions and pro-
cess redesign.
For instance, the rig crew may back-
ream every stand. Is it possible to reduce
the remaining frequency to every other
stand? Upon reaching a sectional Target
Depth, do we really need to circulate over
4 hrs? Should we check the wellbore/hole
cleaning model and offset data to have
a certain reduction? The data analysts
should ask these questions, and engineers
should redesign the process and then use
the ADAPT to monitor the performance.
It is also a continuous improvement pro-
cess: repeating the whole optimization
process to the next well and pushing the
fuel consumption close to the optimal line.
Environmental aspect. Once these
data have been fed into ADAPT, they can
then be used by the RTOC to automate
ESG reporting. With respect to the envi-
ronmental piece of ESG, we can use the
results of these analytics to assess and
document our Scope 1, 2 and 3 emissions.
Scope 1 emissions are direct GHG emis-
sions that occur from sources that are con-
trolled or owned by an organization (e.g.,
emissions associated with fuel combus-
tion generator sets and vehicles).
Scope 2 emissions are indirect GHG
emissions associated with the purchase
of electricity, steam, heat or cooling. Al-
though Scope 2 emissions physically occur
at the facility, where they are generated,
they are accounted for in an organization’s
GHG inventory, because they are a result
of the organization’s energy use.
Scope 3 emissions are the result of activi-
ties from assets not owned or controlled
by the reporting organization, but that
the organization indirectly impacts in its
value chain. Scope 3 emissions include all
sources not within an organization’s scope
1 and 2 boundaries. The scope 3 emissions
for one organization are the scope 1 and 2
emissions of another organization. Scope
3 emissions, also referred to as value chain
emissions, often represent the majority of
an organization’s total GHG emissions.
Scope 1 tracking represents a good
starting point, as it is the simplest to im-
plement and is fully under one company’s
control. The RTOC utilizes the data to
optimize operations and helps perform
the data quality checks for report genera-
tion. ML/AI techniques are used to auto-
mate the report building.
Scopes 2 and 3 require more data
sharing and integration, which provide
an outstanding opportunity for our in-
dustry to open and share more data. This
would require collaboration at an industry
OFFSHORE TECHNOLOGY
level to standardize on the data format
and governance.
The result from our specific well field
trials showed a reduction of 60% in ream-
ing hours and 41% circulation hours, com-
pared to offset Well 1, Fig. 2. Furthermore,
Well 2 had an 82% reduction in general
problems, i.e., surface equipment non-
productive time (NPT). Ultimately, these
performance improvements not only
saved rig time by five days but also reduced
fuel consumption by 16,000 gal, Fig. 3.
Assuming 22.38 lb of CO2 is produced by
burning one gallon of diesel fuel (EIA),
then the amount of fuel reduction is equiv-
alent to 358,000 lbs of carbon emissions.
VALUE POTENTIAL
By integrating people and data with the
RTOC, new opportunities and synergies
are created to help reduce the environ-
mental impact that our industry makes on
the world. At the same time, this increases
efficiency and adds business value.
DR. LEI WANG is a senior
principal engineer at Parker
Wellbore leading a technical
team to implement digital
technology and support
equipment development
of torque-turn system and
casing while drilling. He has
over 15 years of data science and engineering
experience in the oil and gas industry with 18
patents and 30 publications. Before joining
Parker, he held several roles with ExxonMobil
in drilling mechanics and data analytics such
as senior research engineer, team lead, and
data science advisor. More notably, he was
the principal inventor that developed and
commercialized ExxonMobil’s Drilling Advisory
System. Dr. Wang holds a BS degree in
electrical engineering from Nanjing University
of Aeronautics and Astronautics, an MS degree
in aerospace engineering and Ph.D. in
mechanical engineering from North
Carolina State University.
CHRIS STEWART is director of
technology for Parker Wellbore.
He is responsible for Parker’s
technological development,
evolution of existing intellectual
property, and making strategic
technology investments
necessary to enable Parker
to achieve its overall business objectives.
Mr. Stewart has over 25 years of engineering
and operational experience in both the oil
and gas industry and government service,
encompassing technology development,
engineering, operations, capital projects and
general management. Prior to joining Parker,
he most recently served as director,
engineering and analysis, for Valaris, as
well as engineering and leadership roles at
Cameron, a Schlumberger company, and the
U.S. Navy. Mr. Stewart actively participates in
IADC and API committees to help continually
improve the energy industry. He holds a BS
degree in engineering from Old Dominion
University, an MS degree in engineering
and postgraduate certification in data science
and business analytics, both from the
University of Texas at Austin.
World Oil® / APRIL 2022 33
 Register Now! FirstElementConference.com
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OTC 2022 recognizes Spotlight
on New Technology® Award winners
Annual awards were handed out to 14 deserving technical advancements
and innovations geared to the offshore upstream industry.
ŝ KURT ABRAHAM, Editor-in-Chief
In mid-March, the Offshore Technol-
ogy Conference (OTC) announced the
winners of its 2022 Spotlight on New
Technology Award. This prestigious
award is presented to OTC exhibitors
who are revolutionizing the future of
offshore energy through technological
advancement and innovation. In total,
14 companies, including seven small
businesses, were recognized this year for
their breakthrough hardware and soft-
ware technologies.
Recipients of this year’s award were
selected, based on the following crite-
ria: novelty in the marketplace; level
of innovation; demonstrated success;
broad commercial appeal; and ability
to make a significant impact across the
offshore industry.
“Every year, OTC receives hundreds
of award submissions showcasing re-
markably impressive and groundbreak-
ing technological advancements in the
offshore energy sector,” said Paul Jones,
chairperson, OTC Board of Directors.
“The companies awarded today repre-
sent some of the most innovative and
advanced technologies around, which
we trust will shape and transform the in-
dustry for years to come.”
Since 2014, OTC has recognized the
innovation and technologies developed
by small businesses. In order to qualify
for the small business award, companies
must meet the above criteria, be indepen-
dently owned and operated or registered
as a nonprofit organization, and have
no more than 300 employees in the 12
months prior to the application deadline.
Founded in 1969, OTC’s flag-
ship conference is held annually in
Houston. For more information, visit
www.otcnet.org.
2022 SPOTLIGHT WINNERS
There were seven winners among the larger firms category, as outlined below.
FIRST ELECTRIC SUBSEA VALVE
ACTUATOR.
Bosch Rexroth has produced the SVA
R2 (Fig. 1), with safety by springs and as
compact as hydraulic actuators. This dis-
ruptive innovation for electrically actu-
ated valves in the subsea process industry
combines safety, efficiency and electric
operation for depths up to 4,000 m. Al-
though it is a small component, it should
have a big impact on sustainability and
productivity.
The SVA R2 has seamless integration
with subsea equipment. It is the same size
as existing hydraulic cylinders and includes
standard ROV interfaces for easy handling.
Power supply and communication are
handled with just a single cable—like a
sensor. This device speeds up installation
and commissioning in the field with digi-
tal twins and standardized interfaces. Op-
erators can easily automate existing equip-
ment with simple retrofit solutions.
Fig. 1. The SVA R2 is the world’s first
electric subsea valve actuator.
Fig. 3. The MPD and RGH joint provides reduced NPT, fast rig-up time, and improved riser
gas handling.
OFFSHORE TECHNOLOGY AT OTC
FIRST FULLY AUTONOMOUS
WELL INTERVENTION SYSTEM
Expro has developed Galea™, a system
that replaces larger, conventional, and
labor-intensive wireline rig-ups to per-
form a range of routine slickline opera-
tions, Fig. 2. Galea reportedly decreases
deferred production, lowers OPEX costs,
reduces HSE exposure for personnel, and
significantly lessens the carbon footprint
of intervention operations.
Galea can be configured in different
operating modes to suit a range of appli-
cations and environments. In fully auton-
omous mode, the system is permanently
installed onto the wellhead and deploys a
Fig. 2. The Galea system replaces larger,
conventional, and labor-intensive wireline
rig-ups to perform various slickline
operations while decreasing deferred
production, lowering OPEX costs,
reducing HSE exposure, and lessening
carbon footprint.
World Oil® / APRIL 2022 35
OFFSHORE TECHNOLOGY AT OTC
Fig. 4. The Merlin™ 15K HPHT riser system enables cost-effective drilling of shallow-water
HPHT wells with a jackup rig.
Fig. 5. Vacuum-assisted pure oil recovery
from R3 Environmental Systems recovers
drilling fluid and water from waste
mud/cuttings and allows companies to
significantly reduce the amount of virgin
drilling fluid that they need to purchase,
transport, and eventually dispose of.
tool string into the well, either at regular
intervals or defined by well conditions.
Between interventions, the tool string is
parked within a short lubricator section.
In semi-autonomous mode, a pre-pro-
grammed intervention sequence is initi-
ated locally or remotely. This configura-
tion is particularly suited to multi-well
platforms or pads where regular interven-
tions are required. Manual mode enables
a quick rig-up intervention solution that
is operated locally using familiar wireline
winch controls.
MPD AND RGH JOINT
The Oil States MPD (managed pres-
sure drilling) and RGH (riser gas han-
dling) Joint (Fig. 3) is a step forward in
integrating managed pressure drilling and
riser gas handling into a drilling riser. The
system's innovative design solutions, such
as retrievable packers and pull-in bridle,
provide reduced NPT, fast rig-up time,
and improved riser gas handling.
Designed to improve safety and in-
crease operational efficiency, the joint’s
hands-free flowline and umbilical stab-
bing remove the need for man-riding. This
joint is around half the length and up to
one-third the weight of conventional RIJs,
making it easy to handle and fast to rig-up.
Being fitted with twin, retrievable
36 APRIL 2022 / WorldOil.com
Fig. 6. Schlumberger’s extreme-
performance instrumented wireline
intervention service leverages intelligent
downhole technologies to optimize results
in extreme conditions.
stripper packers and bearing assembly,
the joint is completely serviceable while
over well center. Stripper packers are run
and retrieved by drill pipe tools, removing
the need to pull the RIJ from the string or
return to the onshore service center to re-
place annular seals.
A 15K HPHT RISER SYSTEM
Oil states and TotalEnergies have
produced a 15K high-pressure, high-
temperature riser system for subsea
drilling applications in shallow water,
Fig. 4. The Merlin™ system enables cost-
effective drilling of shallow-water HPHT
wells with a jackup rig while offering
superior fatigue performance and im-
proved safety with automated connection
make-up. The system is believed to be
the first-of-its-kind design-rated for sour
service applications.
Drilling wells from a jackup utilizes a
dry surface BOP and an HP drilling riser,
complete with a hydraulic subsea connec-
tor to the subsea wellhead. Quick con-
nections are used to interface with the
rig surface 18 ¾-in. BOP stack. A landing
joint provides interface between the BOP
and the tension joint. The connections on
either end of the tension joints can be de-
signed to be project-specific.
VACUUM-ASSISTED PURE
OIL RECOVERY
R3 Environmental Systems’ innovative
technology is a highly efficient, environ-
Fig. 7. Schlumberger’s autonomous
directional drilling focuses on intelligent
planning and execution capabilities, along
with surface automation.
Fig. 8. The subsea flow temperature
monitor was devised by ClampOn as a
non-intrusive sensor that determines the
temperature of the flow medium from
outside the pipe.
mentally friendly method for recovering
drilling fluid and water from waste mud/
cuttings, Fig. 5. The recovered fluid (mar-
keted as “SecondSource Drilling Fluid)
has been independently verified to be
equivalent to virgin drilling fluid—the
result being one of the most environmen-
tally friendly drilling fluids on the market.
As a result, companies can significantly
reduce the amount of virgin drilling fluid
that they need to purchase, transport, and
eventually dispose of. Recovering and re-
using the base drilling fluid instead of us-
ing new drilling fluid is an opportunity
for the industry to meaningfully reduce
greenhouse gas emissions while main-
taining quality standards. The technology
helps reduce the carbon footprint and
other environmental impacts of oil and
gas E&P.
EXTREME-PERFORMANCE
INSTRUMENTED WIRELINE
INTERVENTION
Schlumberger has devised the Re-
SOLVE iX extreme-performance instru-
mented wireline intervention service,
Fig. 6. It leverages intelligent downhole
technologies to optimize results in ex-
treme conditions, such as HPHT, sour,
and restricted-access environments. The
combination of innovative hardware,
automation, and digitization enables
operators to monitor and control inter-

Fig. 9. The CoDril™ tool is a supplemental
downhole convertible core bit that can
switch between coring and drilling modes.
Fig. 10. The MXT+™ Hydraulic Torque
Wrench delivers significant advances
in industrial bolting by integrating
dual-reaction technology, auto-release,
integrated cycle counter and coaxial drive
into one flexible tool.
vention in real-time and take immediate
action to address downhole challenges.
Now available in two sizes, ReSOLVE
Family services comprise the 31/8-in
ReSOLVE instrumented wireline inter-
vention service and 21/8-in ReSOLVE
iX extreme-performance instrumented
wireline intervention service and can
be adapted to meet an operator’s ob-
jectives and maximize intervention
impact. ReSOLVE iX service capabili-
ties are uncompromised by its size and
enable intervention in extreme condi-
tions, such as complex completions with
small restrictions and sour and HPHT
environments.
AUTONOMOUS DIRECTIONAL
DRILLING
This service by Schlumberger lever-
ages automation and digitalization to
advance offshore exploration and pro-
duction, Fig. 7. This tool drills wells—re-
gardless of the field, rig, or trajectory—in
the most efficient and consistent manner
possible, says the vendor. And this is done
Fig. 11. The HYTORC Connect Software App communicates wirelessly with the company’s
electric torque tools.
by focusing on Intelligent planning and
execution capabilities, along with surface
automation that complements a powerful
suite of downhole automation features in-
corporated in the firm’s steering tools.
Autonomous directional drilling
stays right on a trajectory plan, because
this tool measures the exact strength of
the earth’s gravitational and magnetic
fields every second, and uses 3D reser-
voir mapping in real time to help pin-
point its exact subsurface location, and
determine the precise steering responses
needed. This enables real-time reservoir
characterization and getting to the sweet
spot in the pay zone.
2022 SPOTLIGHT
SMALL BUSINESS WINNERS
There were seven winners in the Small
Business category, including one firm
with two wins.
SUBSEA FLOW TEMPERATURE
MONITOR
ClampOn devised this monitor as
a non-intrusive sensor that determines
the temperature of the flow medium
from outside the pipe, Fig. 8. The sensor
measures the pipe surface temperature
underneath insulation and calculates the
temperature of the flow medium, using
algorithms that compensate for ambient
temperature and insulation coefficients.
This monitor can be used as a stand-
alone temperature sensor. The instru-
ment can be retrofitted to existing instal-
OFFSHORE TECHNOLOGY AT OTC
lations, for example, to replace broken
intrusive sensors. It also can be integrat-
ed into ClampOn’s range of Compact
Subsea sensors to provide temperature
measurement alongside sand monitor-
ing, pig detection, vibration monitoring
or leak detection.
The sensor utilizes the firm’s well-es-
tablished DSP subsea hardware platform,
which has been in operation for more than
20 years. It is built into more than 4,000
subsea sand monitors, pig detectors, leak
monitors and vibration monitors.
CODRIL™ CORE BIT
CoreAll’s Intelligent Coring System
and Logging While Coring tool pro-
vide real-time transmission of gamma-
ray, resistivity, downhole vibration and
core jam indication. The CoDril™ tool
(Fig. 9) is a supplemental downhole
convertible core bit, allowing the opera-
tor to select between coring and drilling
modes. This saves a complete round trip
to change the BHA every time.
HYDRAULIC TORQUE WRENCH
The MXT+™ Hydraulic Torque
Wrench (Fig. 10) combines the best of
HYTORC’s original MXT Wrench with
the latest advanced technology. It delivers
significant advances in industrial bolting
by integrating dual-reaction technology,
auto-release, integrated cycle counter
and coaxial drive into one flexible tool.
The cycle counter monitors tool use and
schedules preventative maintenance and
calibration. This feature helps maintain
the tool at peak performance
World Oil® / APRIL 2022 37
OFFSHORE TECHNOLOGY AT OTC
Fig. 12. ROCSOLE’s electrical tomography
provides intelligent level detection and
data analytics for sand management.
Fig. 14. KINEKtron® is a retrofit subsea
strain monitoring system developed by
Aquatec.
The MXT+ tool is offered in a range
of sizes for tackling tough bolting jobs,
resulting in faster, safer and more reliable
bolting. It is constructed from higher-
strength materials for rugged industrial
use and highly repeatable performance.
SOFTWARE APP FOR BOLTING
OPERATIONS
The HYTORC Connect Software
App (Fig. 11) is used with the firm’s elec-
tric torque tools to automate bolting op-
erations consistent with the industry’s 4.0
digital transformation. The app commu-
nicates wirelessly with the tool, initializes
bolting parameters, guides the operator,
monitors results, collects data, and gener-
ates complete quality documentation to
assure bolted joint integrity.
The app simplifies and speeds up the
configuration of bolting operations by
sending pre-set bolting parameters to the
tool. It guides the user during simple or
multi-pass sequential bolting operations
to ensure job accuracy. Detailed bolting
results are captured wirelessly for com-
plete project documentation.
INTELLIGENT LEVEL DETECTION
AND DATA ANALYTICS FOR SAND
MANAGEMENT
In oil and gas facilities, sand produc-
38 APRIL 2022 / WorldOil.com
Fig. 13. Innovative technology by Subsea Shuttle provides modular subsea chemical
storage and injection.
tion is an unwanted element. Robust and
reliable sensors are critical for automated
sand management systems to secure the
proper functionality and avoid unex-
pected shutdowns or reduced production
rates. ROCSOLE’s electrical tomography
is a real-time non-radioactive monitoring
solution (Fig. 12) that physically sees and
measures a separator's emulsion layer, im-
proving separation efficiency by optimiz-
ing residence time and resulting in higher
quality output downstream.
SUBSEA CHEMICAL STORAGE
AND INJECTION
Subsea Shuttle’s innovative technol-
ogy provides subsea chemical storage
and injection that satisfy the need for
longer and more cost-effective deepwater
subsea tie-backs, Fig. 13. The system fea-
tures a cost-effective modular design and
delivers application flexibility regard-
ing injection rates, autonomy, reliability,
and compatibility with a wide range of
production chemicals.
In addition, the technology lowers
development costs while reducing host
platform space and weight requirements.
It eliminates hazardous chemical inter-
action with offshore personnel while
achieving lower chemical costs. The tech-
nology also facilitates de-manning of plat-
forms while easing host tie-in burdens.
The benefits of subsea chemical stor-
age and injection include supplementing
existing clogged and/or “under-tubed”
umbilicals to maintain subsea well pro-
duction. It also enables production of re-
sources past (further offset) the current
limits of “chemical-tubed” umbilicals, de-
veloping tie-back opportunities that cur-
rently are only possible with new host fa-
cilities. In addition, it lowers development
costs of tie-back opportunities within cur-
rent technology reach by removing tubes
from umbilicals (and reducing umbilical
costs by up to 80%). This technology was
previously cited with a World Oil Award
last October.
NEW-GENERATION SUBSEA
STRAIN MONITORING
KINEKtron® is said to be the world's
first fully functional, tested and deployed
retrofit subsea strain monitoring system,
Fig. 14. The system is capable of measur-
ing strain on structural tubular members.
It combines many of Aquatec's existing
underwater instrumentation and com-
munications technologies with a new and
unique method for measuring strain in a
robust ROV-installable package.
Key features also include a unique,
multi-point strain transfer mechanism
that facilitates high-dynamic range mea-
surement with microstrain resolution.
There are also dual through-wter com-
munications and ultra-low-power design
technology that provides up to three
years’ continuous strain data.
The instrument pod is rated to 150 m
and has a protective shroud for secure in-
stallation. It handles data acquisition,
storage and communications electronics.
There is a wetmate connector for surface
interaction, plus an ROV handle, pressure
sensor, accelerometer, acoustic modem
and optical modem.
SAVE
THE ADAPTI NG .E VOLVI NG .LE AD I N G.

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REGIONAL REPORT
GULF OF MEXICO
Slings and arrows
ŝ MIKE SLATON, Contributing Editor
Skyrocketing oil prices caused by Rus-
sia’s war on Ukraine and Biden’s war on
hydrocarbons present the Gulf of Mexico
E&P industry with a conflicting brew of
circumstances.
While the demand for oil becomes
even more critical, U.S. operations in the
Gulf are stymied by outrageous fortune.
A successful Gulf lease sale was summar-
ily cancelled. Court and regulatory ma-
neuverings have further stalled lease sales
and, at the moment, halted the processing
of drilling permits for federal waters.
For the deepwater Gulf, these slings
and arrows imperil future production
more than today’s immediate needs. In a
region where hugely complex and expen-
sive projects can take decades, the reper-
cussions will come tomorrow.
THE FRONT LINE
Drilling permits and leasing on
federal lands and waters were blocked in
February after a federal judge in Louisi-
Vito newbuild (left) on the way to Shell operations in the Gulf. Source: Sembcorp Marine. Due online in 2024, the Anchor project’s discovery well (center) was drilling in 2015
by Pacific Drilling’s Pacific Santa Ana drillship. Source: Chevron/Pacific Drilling. BP’s Argos platform (right) arrives in Texas. Source: BP.
40 APRIL 2022 / WorldOil.com
ana found in favor of Republican attorney
generals from oil states.
At issue is the “cost estimate of carbon
emissions,” an economic model aimed at
determining the social impact of climate
change. The Biden administration raised
it from $7/ton to $51/ton of carbon di-
oxide. The judge said the increase would
artificially increase the cost estimate of
leases and harm energy producing states.
Louisiana Attorney General Jeff
Landry called it a win and said the Biden
order “was an attempt by the government
to take over and tax the people, based on
winners and losers chosen by the govern-
ment.” But the more immediate and con-
trary result was that the federal govern-
ment used the ruling to stop work on new
leases and drilling permits.
“Work surrounding public-facing rules,
grants, leases, permits and other projects
has been delayed or stopped altogether so
that agencies can assess whether and how
they can proceed,” said the Department of
Justice. “The consequences of the injunc-
tion are dramatic,” said the administration.
The White House’s Office of Information
and Regulatory Affairs said dozens of ac-
tions at the departments of Energy, Trans-
portation and the Interior, as well as the
Environmental Protection Agency (EPA)
will be “postponed or reworked.”
But on April 15, the Interior Depart-
ment quietly announced plans to hold its
first onshore oil and gas lease sales since
Biden took office. DOI is opening just
144,000 acres for lease and will charge op-
erators higher royalties to drill on federal
lands, raising them for the first time. Royal-
ty rates will increase to 18.75% from 12.5%.
So far, no news on plans for the Gulf.
Lease sales in the Gulf and else-
where had already been challenged and
set aside. On Jan. 27, 2021, President
Biden issued Executive Order 14008, ti-
tled “Tackling the Climate Crisis at Home
and Abroad.” It required a “pause” in new
oil and natural gas leases on public lands
or in offshore waters, pending completion
of a comprehensive review and reconsid-
eration of Federal oil and gas permitting
and leasing practices.”
The order resulted in a series of ac-
tions using environmental legislation and
processes to delay, confound and stop
U.S. oil and gas development across the
board. Arctic National Wildlife Reserve
(ANWR) leases were issued, then paused
and ultimately suspended. Next door in
the National Petroleum Reserve, opera-
tions were delayed by a new review of an
environmental statement published last
year. The planned Cook Inlet OCS Oil
& Gas Lease Sale 258 off Alaska’s south-
central coast was sidelined on Feb. 2.
Gulf of Mexico leasing was hit Feb.
12, 2021, when BOEM rescinded the
Record of Decision for Lease Sale 257.
Planned for March 2022, it was the eighth
sale under the 2017-2022 National Oil
and Gas Leasing Program. But the game
was on again in September, when a U.S.
District Court compelled BOEM to hold
the auction while conducting its “compre-
hensive review of the deficiencies associ-
ated with its offshore and onshore oil and
gas leasing program.”
And so, on Nov. 17, 2021, Lease Sale
257 was held. Thirty-three companies par-
ticipated, submitting $191,688,984 in to-
tal bids for 308 tracts covering 1.7 million
acres in the Western, Central and Eastern GOM Shelf, Renaissance Offshore, Mon-
Planning Areas. Highest bids came from forte Exploration, EnVen Energy Ven-
Anadarko (Occidental) for Alaminos Can- tures, Ankor Energy, and Samchully En-
yon ($10,001,252) and Green Canyon 551 ergy and Environment, Table 1.
($6,001,252). It was followed by Chevron Total oil and gas production from
for Mississippi Canyon 40 ($4,409,990) the U.S. Outer Continental Shelf (OCS)
and Walker Ridge 842 ($4,341, 006). Oth- dropped in 2020. Most of that decline
er successful bidders included Shell, BHP occurred in the GOM region, by far the
Billiton and LLOG exploration. dominant producer versus the Alaska and
But, like ANWR, it didn’t last long. Pacific regions.
The deal made it to Jan. 27, 2022, when For the first time since 2013, total OCS
a federal judge annulled the sale, claiming oil production fell by 91,311,659 bbl for a
it did not sufficiently take climate change total 606,377,776 bbl. There wasn’t much
into account. help in 2021, with BSEE figures for the
BY THE NUMBERS
GOM production took a dip in Table 1. GOM production by operator,
2020 and 2021. But there is basis for im- ranked by volume
Operator Total oil, bbl Total gas, Mcf
provement this year. In deepwater opera-
Anadarko
tions, which account for the lion’s share of Petroleum
5,015,044 4,337,923
GOM production, a dozen or more recent Shell Offshore 4,018,069 3,313,909
discoveries are lined up: Murphy’s new Quarter
1,000,275 1,568,849
fields are due to come online; and some North Energy
GOM Shelf 231,087 637,657
big startups are planned, including BP’s
Renaissance
Mad Dog Phase 2 and Shell’s Vito. Deeper, Offshore
88,962 155,078
high-pressure prospects will open up over Monforte
12,352 22,994
the next couple of years, as two high-capac- Exploration
ity drillships go to work for BOE’s Shenan- EnVen Energy
0 0
Ventures
doah and Chevron’s Anchor projects. ANKOR Energy 0 0
At the start of 2022, leading Gulf op- Samchully
erators, ranked by volume of production, Energy and 0 3,326
Environment
were Anadarko Petroleum (Occidental) Note: Gulf production volume leaders
Shell Offshore, QuarterNorth Energy, for January-March 2022. Source: BSEE.
World Oil® / APRIL 2022 41
REGIONAL REPORT / GULF OF MEXICO

Table 2. U.S. OCS oil and gas production by calendar month

Oil production, bbl Gas production, Mcf
Month Alaska Pacific Gulf Total Year Alaska Pacific Gulf Total
Dec. 2020 33,006 385,989 55,121,793 55,540,788 Dec. 2020 331,392 227,575 68,335,042 68,894,009
Jan. 2021 40,591 376,970 55,007,096 55,424,657 Jan. 2021 262,554 227,840 72,630,185 73,120,579
Feb. 2021 38,329 344,553 50,259,385 50,642,267 Feb. 2021 158,897 229,131 65,229,540 65,617,568
March 2021 42,547 384,270 58,243,336 58,670,153 March 2021 229,751 247,788 75,181,454 75,658,993
April 2021 39,893 370,470 53,843,391 54,253,754 April 2021 220,460 248,537 70,697,784 71,166,781
May 2021 37,196 378,066 56,316,263 56,731,525 May 2021 202,709 229,885 73,025,744 73,458,338
June 2021 35,186 361,802 53,518,856 53,915,844 June 2021 182,890 238,106 68,436,549 68,857,545
July 2021 29,533 379,765 57,313,360 57,722,658 July 2021 148,710 246,582 72,880,254 73,275,546
Aug. 2021 35,637 352,252 47,996,275 48,384,164 Aug. 2021 221,487 244,639 62,269,922 62,736,048
Sept. 2021 35,828 357,988 31,652,870 32,046,686 Sept. 2021 193,961 237,744 35,310,772 35,742,477
Oct. 2021 38,195 231,277 51,667,481 51,936,953 Oct. 2021 198,263 214,103 60,696,719 61,109,085
Nov. 2021 37,717 226,271 52,462,283 52,726,271 Nov. 2021 210,733 209,414 79,346,153 79,766,300
Source: BSEE

Fig. 1. While deepwater continued to gain as a percentage of total production, total Table 3. GOM OCS Approved well permits
output fell in 2020. Source: BSEE by water depth for all types
Shallow Deep
Total
Year (<500 ft) (>500 ft)
2022 thru
12 52 64
February
2021 148 633 781
2020 83 718 801
2019 225 794 1,019
2018 185 913 1,098
2017 158 627 785
2016 76 675 751
2015 170 709 879
2014 434 669 1,103
2013 507 554 1,061
2012 446 520 966
2011 418 274 692
Source: BSEE

first 11 months totaling 572,454,932 bbl,
Table 2.
In the Gulf, oil production in 2020 was
601,351,182 bbl, down from 692,760,802
bbl in 2019. It was the first decline since
2014. In 2021, January to November,
the production tally was still low at
568,280,596 bbl.
Total OCS gas production dropped
to 809,482,112 Mcf, down from
1,040,044,903 Mcf in 2019. In the Gulf,
gas fell from 1,034,420,387 Mcf in 2019
to 804,537,475 Mcf in 2020. In 2021,
January to November, production was not
much improved at 735,705,076 Mcf.
Deepwater production continued
to dominate the GOM as a percentage of
total output. In 2020, that portion gained,
with oil at about 93% of the regional total
and gas at about 73%; in 2019 the figures
were 91% and 70%, respectively, Fig. 1.
But in terms of total deepwater produc-
tion, 2020 output dropped to 557,809,297
bbl, compared to 629,665,171 bbl in the
year prior, and 575,767,623 bbl in 2018.
The total for deepwater gas in 2020 was
42 APRIL 2022 / WorldOil.com
589,255,880 Mcf, down from 721,301,118
Mcf in 2019.
Rig activity in the Gulf has been rela-
tively steady over the last year at roughly 14
rigs. On March 25, 2022, there were 14 ro-
taries working, up 2 rigs from the same pe-
riod in 2021, according to Baker Hughes.
There were 20 rigs working in March 2020.
Well permits marked a two-year de-
cline in 2021, with 148 shallow-well per-
mits and 633 permits for deepwater wells.
The 781 total permits are down 20 from
the 2020 yearly total and minus 238 from
2019’s figure. As of February 2022, BSEE
had approved 64 permits—12 shallow-
water and 52 deepwater permits, Table 3.
BSEE breaks out permits in six catego-
ries—new well, revised new well, bypass,
retrieved bypass, sidetrack and revised
sidetrack. The number of permits for each
type varies year to year with project de-
mand. For 2021 shallow permits, the big-
gest category was revised sidetracks, with
53 permits; in 2020, there were 23. The
deepwater permits were more consistent,
with the revised new well category ac-
counting for 417 approvals in 2021, com-
pared to 410 in 2020.
FIELD NOTES
The two ultra-deepwater drillships
that Transocean has been building for Gulf
operators are due on location in 2022 and
2023. Their arrival will open up new high-
pressure prospects, with the first drillship
use of 20,000-psi BOP technology and
3-million-pound hookload capacity.
Transocean’s Deepwater Titan and
Deepwater Atlas are built in Singapore by
Semcorp Marine’s Jurong Shipyard. The
advanced vessels were started in 2014 and
have faced Covid-related delays. Never-
theless, they appear to be headed toward
a GOM arrival this year and next. Deep-
water Atlas will work for BOE Exploration
and Production during second-half 2022;
Deepwater Titan is scheduled to be onsite
for Chevron U.S.A. in first-quarter 2023.
Anchor. Chevron needs the Deepwa-
ter Titan’s high-pressure BOP and mas-
sive hookload for its Anchor project in the
Green Canyon area. Anchor’s first phase

calls for a seven-well subsea development
and semisubmersible floating production
platform. The planned facility has a design
capacity of 75,000 bopd and 28 MMcfgd.
Total recoverable oil-equivalent resources
may exceed 440 MMbbl.
Chevron discovered the Anchor find
in 2015, when its Well 2 in Green Canyon
Block 807 found oil in multiple zones of
the Lower Tertiary Wilcox sands. The
well is in about 5,000 ft of water and was
drilled to 33,749 ft, MD. The project was
sanctioned in 2019 and is expected to cost
$5.7 billion, Fig. 2.
Arrival of the Deepwater Titan will start
a development process expected to see
first oil in 2024. Recoverable assets are es-
timated to exceed 440 MMbbl.
Shenandoah. BOE Exploration will
use the Deepwater Atlas in drilling and
completion of its Shenandoah project.
Each phase should last a little less than a
year. Transocean says the drillship will
use dual 15,000-psi BOPs for the drilling
program and switch over to the 20,000-psi
BOP for the well completion phase.
The Shenandoah discovery well was
drilled in 2009 by Anadarko Petroleum on
Walker Ridge Block 52. It is in 5,750 ft of
water. The 30,000-ft, TD, well found about
300 ft of oil pay in the Lower Tertiary Wil-
cox sands, and appraisal wells were drilled.
In August 2021, a group comprised of BOE
(operator), Navitas Petroleum and HEQ
Deepwater awarded Transocean the Deep-
water Atlas contract to develop Shenando-
ah. The subsea development will produce
through a production platform.
A Navitas timeline shows completion
of subsea facilities in early 2023 and subsea
pipelines in early 2024, with first oil expect-
ed in June 2024. The project was originally
planned on a regional hub model similar to
the DeltaHouse and Who-Dat fields.
Mad Dog 2. The Argos floating pro-
duction platform for Mad Dog 2 arrived
at the Ingleside, Texas, Kiewit Offshore
Services fabrication yard in April 2021.
BP (operator) plans start-up for second-
quarter 2022, Fig. 3.
The platform was built by Samsung
Heavy Industries in South Korea and
transported by the BOKA Vanguard. It is
expected to support about 800 jobs in In-
gleside and about 250 jobs once in opera-
tion, says BP. After final work and inspec-
tions at Kiewit, the 60,000-ton platform
will be towed to location, about 6 mi from
the original Mad Dog spar, about 190 mi
south of New Orleans, where it will oper-
GULF OF MEXICO / REGIONAL REPORT
ate in 4,500 ft of water,
Mad Dog 2 is the southwest extension Fig. 2. Chevron project start-ups include
Mad Dog 2 in 2022; St. Malo injection in
of Mad Dog field and may have recover- 2023; Anchor and Whale in 2024; and
able oil-equivalent resources exceeding beyond that, Ballymore. Map: Chevron.
500 MMbbl. BP has a 60.5% interest,
along with co-owners BHP (23.9%) and
Union Oil Company of California, an af-
filiate of Chevron Corp. (15.6%).
Vito. Fabrication of Shell’s Vito float-
ing production unit was completed in De-
cember 2021 by Sembcorp Marine. It will
be transported to the Gulf, where produc-
tion is scheduled for this year, Fig. 4.
Vito is a Miocene development discov-
ered in 2009. It is laid out on four Missis-
sippi Canyon lease blocks under 4,000 ft
Fig. 3. The Argos FPU in South Korea on
of water. It features eight subsea wells and the BOKA Vanguard, headed to the
a deep (18,000 ft) in-well gas lift. Peak Kiewit Offshore Services fabrication yard
production is expected to be in excess of in Ingleside, Texas. Image: BP.
900,000 boed. The development is owned
by Shell Offshore Inc. (63.11%, operator)
and Equinor (36.89%).
Whale. Shell also has started con-
struction of an FPU for its Whale proj-
ect. Sembcorp is also the shipbuilder, and
Shell says the design is a 99% replicated
hull and an 80% replication of the top-
sides from its Vito project. The FID for
the project was announced in July 2021 Fig. 4. Integration of Vito topside
after a year-long Covid delay. Production structure with the FPU hull using a pair
is scheduled in 2024. of 30,000-tonne goliath cranes at Tuas
Boulevard Yard, Source: Sembcorp Marine.
The Whale production facility is in
Alaminos Canyon Block 773, next to the
Shell-operated Silvertip field, and approxi-
mately 10 mi from the Shell-operated Per-
dido platform. The development, in more
than 8,600 ft of water, features a semi-sub-
mersible production host with 15 oil wells.
Whale is owned by Shell Offshore Inc.
(60%, operator) and Chevron U.S.A. Inc.
(40%). Peak production is estimated at
100,000 boed, and the asset has an esti-
mated recovery of 490 MMboe.
St Malo. Ongoing work on the St.
Malo field waterflood is aimed at first in- provide engineering and procurement
jection in 2023. The Chevron-operated services to support subsea and topsides
field in Walker Ridge will get two new systems. The field is in Mississippi Can-
production wells, three injectors and top- yon Block 607, in about 6,581 ft of water.
sides water injection equipment. It will be Chevron is the operator (60%) with TO-
Chevron’s first waterflood project in the TAL E&P USA Inc. (40%) as co-owner.
Wilcox trend. Khaleesi-Mormont and Samurai.
Chevron holds a 51% working inter- King’s Quay FPS is scheduled to go into ser-
est in St. Malo field, along with co-owners vice in mid-2022, in Khaleesi/Mormont
MP Gulf of Mexico, LLC (25%), Equinor and Samurai fields, says operator Murphy
Gulf of Mexico LLC (21.5%), Exxon Mo- Oil. In March, the company said its well
bil Corporation (1.25%) and Eni Petro- completion program was underway, and
leum US LLC (1.25%). final pre-commissioning activities were
Ballymore. A subsea tie-back for ongoing to receive first oil during second-
Chevron’s Ballymore field was announced quarter 2022. The FPS is designed to pro-
in mid-April 2021 by Worley, which will cess 80,000 bopd and 100 MMcfgd.
World Oil® / APRIL 2022 43
 Take your business further with our
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 FORMATION EVALUATION

Three-dimensional mapping improves reservoir

understanding with volumetric and 3D insights
To achieve more sustainable viously acquired well logs, the new set of magnetic dipole antennas within azimuth-
drilling, operators should measurements almost doubles in number. al resistivity. It sends the data uphole in
drill fewer, more accurate Because the new inversion algorithm is not real time via mud pulse telemetry or wired
wells. This becomes confined to any specific forms of models, it drill pipe. The modular tool layout has one
is suitable for exploring complex reservoir transmitter and multiple receivers spaced
increasingly challenging, settings and finding solutions. between 5 m and 35 m apart. Antennas
as operators encounter The latest advances in the scalability operate at multiple frequencies between 2
more complex reservoirs. A and algorithm design of the cloud com- kHz and 96 kHz.
new 3D reservoir mapping puting infrastructure improve turnaround Using cloud computing, the 3D reser-
service helps operators time for the new inversion by more than voir mapping-while-drilling technology
improve geosteering in such 100 times. When combined, the features inverts the large datasets with a 2D azi-
provide a 3D reservoir map without having muthal pixel-based algorithm. The service
environments, reducing the
to compromise between high resolution then produces 3D-resistivity volumes,
need for more wells while and depth of investigation. The real-time which are filtered to understand the geo-
optimizing production. 3D reservoir map enables an up-to-date
reservoir model that helps the operator Fig. 1. GeoSphere 360 service acquires
make informed decisions while drilling 360° tensor data and sends it up-hole
ŝ MAURO VIANDANTE, JEAN MICHEL and enabling targeting of more complex in real time via mud pulse telemetry and
wired drill pipe.
DENICHOU and HAIFENG WANG, Schlumberger reservoirs and improving geosteering re-
sults. The ability to update reservoir mod-
els can help improve drilling, completion,
As reservoir complexity increases, drill- production and reservoir management.
ers require expanded reservoir mapping
capabilities with the ability to map resis- How the technology works. The 3D
tive boundaries on or near the vertical axis. reservoir mapping-while-drilling service
Conventional 2D reservoir mapping does acquires 360° EM tensor data of the for-
not allow for lateral changes in the plane, mation surrounding the tool, using tilted
and the 1D inversion algorithm only in-
verts for resistivity profile vertically at each
given point on the trajectory. Fig. 2. Integration of a 1D longitudinal resistivity inversion and a 2D transverse resistivity
inversion map in the 3D reservoir steering workflow enables imaging of lateral resistivity
An improved understanding of the res- variation.
ervoir structure and fluid contact in a full
3D context around the wellbore enables
geoscientists to better steer the well. Re-
cent advancements in deep directional
electromagnetic (EM) measurements, for
mapping deeper into the reservoir, have
enabled looking ahead of the bit while
drilling, reducing risk associated with un-
planned penetration of certain formations.
The GeoSphere 360* 3D reservoir
mapping-while-drilling service from
Schlumberger includes three parts: a set
of new measurements acquired downhole
and transmitted to surface in real time; a
new inversion algorithm that is model-
independent and fit for any reservoir
complexity; and a new cloud computing
capability that enables answers in real time
while drilling, Fig. 1. Compared with pre-
World Oil® / APRIL 2022 45
FORMATION EVALUATION
metrical relationship of the resistive geo-
bodies around the wellbore, calibrating
the seismic data and feeding into reservoir
modeling workflows. The 2D inversions
integrate the 1D inversion results, illustrat-
ing vertical separations between two resis-
tive bodies in a lateral plane, Fig. 2. The
2D transverse inversion slices illustrate the
lateral variation in the resistive bodies. The
2D transverse inversion enhances integra-
tion of the geological dataset from a nearby
wellbore to reservoir scale, enabling highly
educated geosteering decisions at realistic
drilling ROPs.
Because the full 3D data have sig-
nificantly more data points, the pre-drill
seismic images and geobody extractions
are calibrated more accurately than what
is possible with conventional technol-
ogy. Comparing all data sources enables
further validation of interpretation. Ad-
ditionally, subsurface geomodels, updated
in real time to a high resolution, enable
higher-confidence strategic geosteering
decisions in 3D.
Inversion algorithm. Eight measure-
ment classes, combined with shallow con-
ventional resistivity data, are inverted in
real time using cloud computing for the
2D transverse resistivity inversion. The re-
sistivity and anisotropy of each pixel in a
symmetric grid are inverted with the two
alignment angles of the trajectory w.r.t.
the 2D plane. A single data point or a data
window can be used in the inversion to es-
Fig. 3. (A) Interpolated 3D volume from 2D azimuthal inversion is shown unfiltered.
(B) The same aspects are filtered to show resistivities above 2.5 ohm.m. (C) Geobody
extraction from the RMS amplitude attribute (green points). (D) With z-slices of 3D
interpolated volume from the 2D azimuthal inversions.
46 APRIL 2022 / WorldOil.com
timate the resistivity anisotropy inside the
2D plane and its alignment angles. With
the single data point and execution of the
inversion on cloud computing services, a
turnaround time of 15 min. or less can be
achieved for a two-receiver BHA, enabling
real-time inversion processing of the mea-
surements transmitted uphole. A 3D reser-
voir map can be derived from the multiple
2D inversions.
Data transmission. The 3D reservoir
mapping-while-drilling service gener-
ates numerous real-time measurements.
Conventional 2D reservoir mapping
technology generates a multi-frequency
measurement set with 55 measurements,
transmitting 30 curves from three fre-
quencies in real time. Compared with
the previous technology, the number of
curves in each measurement set using the
3D reservoir mapping technology almost
doubles. Every measurement set from one
transmitter-receiver pair has 96 measure-
ments, which means a total of 54 curves
are sent in real time.
Advanced compression algorithms can
achieve an effective rate of more than 80
bits per second (bps) in the latest MWD
system. This enables transmission of the
large number of curves needed for 3D res-
ervoir mapping technology in real time,
using a mud-pulse telemetry system.
CASE STUDIES
Operators in the North Sea and Aus-
tralia have used the 3D mapping-while-
drilling technology to improve reservoir
understanding.
North Sea operator extends well
and gains extra net pay interval. In
a well with a coarsening upward sequence
of offshore shales and lower shoreface
sediments, an operator wanted to land as
early as possible, to ensure maximum net
sand once inside the reservoir. Another
objective was to stay high on the structure,
maintaining between 3 m and 7 m, TVD,
from the top.
Because of a wedge geometry and pre-
dicted volume from seismic data, the abil-
ity to map the structural variations of the
reservoir laterally and vertically would be
a significant advantage, Fig. 3. The op-
erator also wanted to optimize high-angle
well placement for total hydrocarbon re-
covery and deployed geosteering support
for both the landing and the reservoir sec-
tion. A conventional reservoir mapping-
while-drilling service provided 1D forma-
tion resistivity mapping while drilling, but
real-time interpretation was limited by
this type of inversion. More advanced 2D
transverse inversions provide new infor-
mation, highlighting 3D structural com-
plexity and fluid movements locally in the
near-wellbore region.
The application of the 3D mapping-
while-drilling service enabled steering
away from the planned trajectory toward
the sweet spot, which was located side-
ways from the planned trajectory. This was
made possible by the real-time processing
of the 2D transverse resistivity inversions
while drilling from the heel up to the to-
tal depth of the 8.5-in. horizontal section.
2D advanced transverse inversions were
incorporated into the current geosteering
workflow. This provided a complete 3D
structural understanding from the land-
ing zone when approaching the reservoir
top, all the way to steering inside the main
section in the horizontal interval. This in-
tegrated approach was used for 3D reser-
voir mapping while drilling and provided
relevant real-time information to steer
laterally, to keep the borehole within the
optimal reservoir exposure.
The 2D transverse inversions while
drilling mapped a higher resistive geo-
body located sideways from the wellbore
path. From the inversion results, it also
was possible to identify a lateral dip where
inclination and direction correlated with
the structural true dips derived from the

borehole LWD density images. This novel
real-time information supported a strate-
gic change in the trajectory to turn fully
westward, respecting the dogleg sever-
ity limit for running a production liner to
target and intercept the sweet spot. This
azimuthal 3D reservoir steering decision
delivered nearly 100 m, MD, of extra net
pay interval by extending the well inside
this reservoir section.
North Sea operator maximizes res-
ervoir exposure. To enable strategic
geosteering decisions, another operator
in the North Sea wanted to integrate data
from multiple scales of measurement, such
as borehole-scale and borehole-derived
near–seismic-scaled LWD, with attribute
analysis of surface seismic, Fig. 4. The well
contained significant static and dynamic
uncertainties throughout the well design
and execution phases, including fluid dis-
tribution and structural geometry.
The project’s objective was to improve
and enhance geosteering operations in a
complex reservoir, which contains an oil
accumulation with a gas cap. The reser-
voir comprised sandstones of a deepwater
turbidite channel system. The geological
structure was a complex, four-way dip
closer anticline with bounding faults and
expected sub-seismic faulting, increasing
the level of uncertainty and complexity.
An area of bypassed oil identified on the
eastern flank of the structure was the tar-
get for an infill well.
Australian operator geosteers well
100% inside target zone. In an oil field
offshore Australia, an operator wanted to
drill a new producer well that could be
geosteered to maximize reservoir expo-
sure while maintaining DLS and well tor-
tuosity, thus ensuring a smooth comple-
tion run. The ability to map the reservoir
and know where to blank it off was critical
for success. The operator also wanted to
blank off conglomerate and avoid a chan-
nel cut to the reservoir layer.
Other common challenges included
structural complexity, faults, channel cuts,
reservoir property lateral variations, and
oil/water contact (OWC).
The operator selected the 3D reser-
voir mapping-while-drilling service to
use the resistivity profile map from the
conventional curtain section inversion
result to map the top and base of the res-
ervoir and assist geosteering to optimize
the well position vertically. Toward the
Fig. 4. 2D azimuthal inversion slices, every 10 m, from a 75-m MD section, looking
north. The upper resistive red body is truncated in the earlier slices, with the truncation
reducing along hole. The inversion also images the stacked reservoir channels, yielding
important information on vertical connectivity in the lateral direction.
toe of the well, the service could poten-
tially help geosteering azimuthally. The
service can map the resistivity profile lon-
gitudinally and to the left and right, with
the depth of detection covering the previ-
ous well. This could help increase under-
standing of the reservoir and the previous
well’s issue. Furthermore, it would help to
map the water saturation profile, if OWC
moved up in some areas due to existing
well production.
The service enabled the operator to
achieve all objectives. The well was geo-
steered 100% inside the target zone and
reached the required length. Real-time 3D
reservoir mapping enabled the operator to
make informed decisions on the well path
in the completion design. The service also
mapped some conductive features, help-
ing the operator better understand the
reservoir dynamics related to fluid move-
ment in the field. For the first time, the
operator ran 12-bps mud-pulse telemetry
without issues. Despite the additional data
required to send uphole and the high ROP
of more than 30 m/hr, the update rate was
very good at 1.5 m for both receivers. Dur-
ing post-job, a 3D pointset and 3D cube
delivered to the operator enabled better
visualization and utilization of data for
reservoir model refining.
VALUE DELIVERED
The ability to achieve 3D reservoir
mapping while drilling provides a bet-
ter understanding of the 3D geological
environment and fluid distribution with
a deep depth of investigation, as well as
the required information to create sup-
port for reservoir steering decisions for
optimal well positioning. By improving
FORMATION EVALUATION
reservoir understanding, operators can
book more reserves, unlock more oil
production, enhance completion and
production design, place fewer wells with
greater certainty and improve returns
from complex reservoirs. The 3D reser-
voir mapping-while-drilling service capa-
bilities open opportunities for additional
applications and integration with 3D or
4D seismic workflows.
*Mark of Schlumberger
MAURO VIANDANTE is the
geosteering and reservoir
mapping domain champion
for Schlumberger. He has 15
years of experience in drilling,
logging and geosteering in the
North Sea, Europe, Australasia
and the Middle East. He has
been involved in field-test development of
both hardware and software of new LWD
technology and has authored several papers
on geosteering techniques and LWD technology.
Dr. Viandante holds a master’s degree in
geology and a doctorate in structural geology
from the University of Chieti-Pescara.
JEAN MICHEL DENICHOU
has gained experience in
geosteering for the past
26 years while based in
Nigeria, Algeria, Tunisia,
Norway, the U.S. and China.
His responsibilities include
technical advice, corporate
strategy, product development, planning and
execution of geosteering, and reservoir
mapping operations worldwide.
HAIFENG WANG is the
geosteering and reservoir
mapping domain champion
from Schlumberger, based
in Perth, Australia. He joined
the company in 2001 and
since has worked as a project
engineer, project manager,
geosteering engineer, product champion, and
domain champion over the past 19 years. He
holds bachelor’s degrees in economics and
computer science and a master’s in geology
from Peking University.
World Oil® / APRIL 2022 47
 Shale Energy Technology Conference
PERMIAN SHALES
$100 OIL, EUROPEAN
TENSIONS TEST BASIN-WIDE DISCIPLINE
ŝ JIM REDDEN, Contributing Editor
Scott Sheffield has a forewarning for the acre-
age-restricted private operators helping drive re-
cord production in the Permian basin: your annual
double-digit growth rates are unsustainable.
“A few private independents have announced
growth rates of 15% to 20% per year and eventu-
ally they’ll run out of inventory fairly quickly,” the
Pioneer Natural Resources Co. CEO warned
on Feb. 17. “Also, many of the private companies
are experiencing labor issues, cost issues and can’t
get equipment.”
Sheffield says Pioneer will not deviate from a
maximum 5% production growth rate, even with
“$100 oil or $150 oil,” echoing many of his contem-
poraries, which flush with cash, are determined to
return more of same to investors, rather than maxi-
mize production growth. “So far, the public inde-
pendents are staying in line and I’m confident they
will continue to stay in line,” he said.
That confidence is in jeopardy, however, as Eu-
ropean turbulence spills over into West Texas and
southeastern New Mexico, pressuring multi-zone
48 APRIL 2022 / WorldOil.com
Permian operators to reverse the calculus. “I will
not be surprised, if there is not a call on the U.S.
shale producer to grow, depending on what hap-
pens to world energy markets, global inflation and
some of the turmoil we’re seeing around energy
security,” Coterra Energy Inc. CEO Tom Jorden
said prophetically on Feb. 24. That was the day
Russia’s unprovoked invasion of Ukraine further
roiled the market, eventually sending West Texas
Intermediate (WTI) oil prices to a since-corrected
11-yr high of $123/bbl on March 8.
For now, the U.S. Energy Information Adminis-
tration (EIA) estimates April oil production in the
Permian’s Midland and Delaware sub-basins will
hit a record of just over 5.2 MMbpd, Fig. 1. Mostly
associated gas production, likewise, is expected to
reach a new high of 20,280 MMcfd, thanks in no
small part to basin-wide initiatives aimed at miti-
gating routine flaring to help reduce emissions,
amid concerns over strained takeaway capacity.
March and April drilling activity also increased
significantly, jumping by 18 rigs during the four
Pumpjacks are working at capacity, as
Permian oil production exceeds 5.2 MMbpd.
Image: Ovintiv Corp.

World Oil® / APRIL 2022 49

SHALETECH / PERMIAN SHALES
Fig. 1. March-to-April oil and gas production in the Permian is projected to increase
by 70,000 bpd and 120 MMcfd, respectively. Source: U.S. Energy Information
Administration (EIA).
Fig. 2. Patterson-UTI super-spec rigs (14 gross) in the Permian this year
Rig 257 is one of the 334 rigs active in and put 300 to 330 wells online.
the Permian during April. Image:
Patterson-UTI Energy, Inc In no danger of running out of resourc-
es or places to drill, ExxonMobil plans
to increase Permian production this year
to more than 550,000 boed, up 25% over
2021. Its subsidiary, XTO Energy Co.,
will operate between 10 and 12 rigs and
6-8 frac crews in 2022, the company said
during the March 2 Investor Day.
The same for Chevron, which aims
to hike production by 60,000 boed this
year, compared to 2021. The super-major
raised 2022 Permian capital expenditure
to $4 billion—a $1 billion jump over
2021—and will operate around seven
rigs and put more than 200 new wells on
production, up 50% over last year. “That’s
a meaningful step-up in activity, and we
want to execute that well. I don’t think
we’re going to be tempted by the price of
the day to put that at risk by doing more,”
weeks ending April 14 to 334 active rigs, says CEO Mike Wirth.
according to Baker Hughes. For others, inflation is taking a bigger
bite across their ever-tightening supply
PRODUCTION CONSTRAINTS chains. “Like all of our peers, we are expe-
Increasing production may be easier riencing inflation across our supply chain.
said than done, given a tight labor pool, This includes rig rates, pressure pumping,
supply chain issues with everything from labor, fuel, sand and chemicals,” says Co-
tubulars to sand, and a nearly 43% year- terra’s Jorden.
over-year drop in the Permian inventory An offshoot of the October merger of
of drilled-but-uncompleted (DUC) wells. Cabot Oil & Gas and Cimarex Energy,
Vicki Hollub, CEO of Occidental Pe- Conterra, nevertheless, will average six
troleum Corp, told CERAWeek by S&P rigs and two completion crews in the
Global that even the world’s largest shale Permian this year with 50-60 wells put
play is unable to singularly ease the current on production. Nearly 50% of the compa-
supply-demand imbalance. “The call for ny’s 2022 drilling and completion spend
increased production from the U.S. at this will be diverted to the Permian, with oil
point, especially with supply-chain chal- production expected to increase mod-
lenges, can’t happen at the level that’s need- estly from 78,000 bpd in 2021 to between
ed,” Hollub said on March 8 in Houston. 81,000 and 86,000 bpd this year, led by
Like Pioneer, Oxy will maintain Cimarex’s legacy Permian, and to a lesser
around 5% annual growth, with 2022 degree, Anadarko assets.
Permian production expected to stand pat With few exceptions, a sampling of oth-
at between 527,000 and 537,000 boed. er high-profile public companies shows a
Occidental plans to run around nine net concerted effort, for now at least, to mod-
50 APRIL 2022 / WorldOil.com
erate production growth while generating
robust free cash flow (FCF).
With a near-company record $1.8 bil-
lion in FCF in 2021, Apache Corp aver-
aged 227,991 boed in the fourth quarter,
largely from its southern Midland and
Delaware basin assets. Averaging two rigs
in the Permian basin, with a third slated
for the Delaware by mid-year, the com-
pany drilled and completed 12 net (13
gross) wells during the quarter in its Texas
holdings, which also include the Austin
Chalk, where two gross wells were turned-
in-line. “Our overarching goal for the next
few years is to return to pre-pandemic
production levels and then invest at a pace
that will sustain or modestly grow those
production volumes,” President and CEO
John Christmann said on Feb. 22.
Centennial Resource Develop-
ment Inc. expects oil production to reach
a high of 36,500 bpd this year—a 10% to
15% increase over 2021—while generat-
ing FCF of more than $400 million. Run-
ning a two-rig program, the company will
drill and complete between 47 and 53
gross wells with 80% of the completions to
tap the Bone Springs in Lea County, N.M.
After FCF tripled last year to a com-
pany-record $2.9 billion, Devon Energy
Corp. also plans no more than 5% produc-
tion growth this year. This commitment
follows fourth-quarter output of 416,000
boed from a 400,000-net-acre Delaware
basin leasehold—up 34% from the Janu-
ary 2021 closing of the WPX Energy
acquisition. The company will hold pro-
duction at between 570,000 and 600,000
boed from its five unconventional assets,
with 60% of activity directed to the New
Mexico Delaware, with an average of 14
rigs and some 220 new wells.
Ovintiv Corp. averaged 2021 Perm-
ian production of 118,000 boed, where
it drilled 80 net wells and put 93 wells on
production. With a 2022 FCF target of
$2.9 billion, the company, as of Feb. 25,
expects to hold cumulative oil and con-
densate production at 180,000-190,000
bpd in its core Permian, Anadarko and
Montney shale plays. Ovintiv plans to av-
erage three rigs in the Permian, with 60-65
net wells put on production.
Marathon Oil Co. averaged 22,000
boed of production from its northern
Delaware asset in the final quarter of 2021
and plans to put 20-25 gross wells online
in 2022, all in the second half. “We are not
allocating any production growth capital
in 2022 and expect our total company oil

and oil equivalent production to be flat
with the 2021 full year averages,” Mike
Henderson, executive VP of operations,
said on Feb. 17. Marathon closed out 2021
with FCF of $2.2 billion.
$3.2-BILLION MOVE-IN
For Bakken pioneer Continental Re-
sources Inc., the time was right to finally
stake a claim in the Permian basin. “We’ve
actually been looking at the Permian for
quite some time, “ CEO Bill Berry said
on Feb. 15, just under two months after
closing on the $3.25-billion acquisition of
Pioneer’s Delaware basin asset. The deal
included around 55,000 boed of produc-
tion and more than 92,000 net contiguous
acres, mainly in Texas’ Pecos, Reeves and
Ward counties.
Continental will operate four rigs in
the Permian this year with 46 wells ear-
marked for first oil. At the time of the Dec.
21 closing, the newly acquired assets aver-
aged roughly 42,000 boed of production.
Pure play Pioneer, meanwhile, will fo-
cus entirely on the “high-margin” Midland
basin, where it holds some 820,000 net
acres. The company will operate 22-24 rigs
and six frac crews in 2022 with 475-505
wells turned-in-line. With an average $30/
bbl break-even cost, Pioneer estimates
year-end FCF of more than $7 billion.
Pioneer intends to maintain wholly un-
hedged production of 623,000 to 648,000
boed this year. “With demand up, we may
need those extra barrels today, but the
question is will we need them in ‘23 and
‘24,” Sheffield says.
Callon Petroleum Co. is going full-
bore after integrating the 35,000 net acres
in Reeves County, Texas, acquired in the
$788 million acquisition of tightly held Pri-
mexx Energy Partners last October. Callon
says 85% of its $725 million capital alloca-
tion this year will be spent in the Permian,
with production estimated at 101,000 to
105,000 boed, compared to 105,000 boed
in 2021. The company will average six to
seven rigs and two completion crews in the
135,000 net acres now controlled in the
Midland and Delaware basins.
After spending $9.5 billion in Decem-
ber to snap up Shell’s Permian opera-
tions, ConocoPhillips Co. is reportedly
looking to unload some Delaware basin
acreage with an estimated $1 billion valu-
ation, according to Bloomberg. A Cono-
coPhillips spokesman declined comment
on the Feb. 11 report that the company
was working with an advisor and had
Fig. 3. One of 12 centralized BasinScan laser nodes onsite in the Permian basin.
Image: LongPath Technologies, Inc.
opened a data room for potential buyers.
ConocoPhillips is running 20 rigs and
nine frac crews across its Big Three (Perm-
ian, Eagle Ford and Bakken) plays, with all
but one rig active in the two Texas plays.
Permian production was 483,000 boed in
the fourth quarter.
“The increase in activity that we’ve
seen from the privates and such will gen-
erate more production. But I think com-
panies like ours and other large companies
kind of think more of a sustainable growth
rate because that’s really where you get
your efficiency,” says Tim Leach, execu-
tive VP of Lower 48.
EMISSIONS CONTROL
Meanwhile, in a play where nighttime
flares once gave the aerial impression of a
bustling city after sunset, public and pri-
vate initiatives are intensifying to mitigate
routine flaring and reduce greenhouse
gas (GHG) emissions. While the largely
industry-friendly Railroad Commission
(RRC) says statewide flaring rates fell to
a new low of 0.19% in November 2021,
the Environmental Defense Fund (EDF)
in December said a helicopter survey
showed emissions continuing at a “high
rate” in the Permian. The EDF said it de-
tected methane plumes from 40% of 900
sites measured, with 14% attributed to
malfunctioning flares.
Once again, Sheffield, whose company
plans to reduce methane emissions in-
PERMIAN SHALES  / SHALETECH
tensity 75% by 2030, leveled a broadside
at private operators. “Private companies
continue to vent and flare, much greater
than 1%. The privates need to be reined
in, because they are the biggest flarers in
the Permian basin,” he said.
Among the public companies, Apache
lays claim to being among the first to end
routine flaring in the basin. “In 2021, we
set an ambitious goal of eliminating rou-
tine flaring in the Permian basin by year-
end, which we accomplished three months
ahead of schedule,” says CEO Christmann.
To help meet weighty ESG objectives,
operators employ a variety of gas capture
and emissions monitoring mechanisms.
One of the latest advancements deployed
in the Permian leveraged Noble Prize-
winning technology developed at the
University of Colorado and the National
Institutes of Standards and Technology
(NIST) to engineer laser systems that de-
tect the unique adsorption “fingerprints”
of methane, carbon dioxide (CO2) and
other GHG molecules.
Developed by LongPath Technologies,
Inc. of Boulder, Colo., the laser-driven Ba-
sin-SCAN continuous methane monitor-
ing and abatement technology is designed
to reduce emissions by 60% to 80% in
the respective coverage areas. By the end
of March, 12 systems had been installed
in the Permian, covering 156,000 acres
across more than 160 production and
gathering sites, the company said.
World Oil® / APRIL 2022 51
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 MANAGEMENT ISSUES

Oil and gas expansion accelerates

as outlooks improve significantly
Compared to fourth-quarter share reporting an increase, the index will licly traded producers are restraining pro-
2021, the Dallas Fed’s survey be below zero, suggesting the indicator has duction growth despite high oil prices.
found that U.S. E&P activity decreased over the previous quarter.
OIL & GAS PRICES
surged in first-quarter 2022.
Data were collected March 9–17, and On average, respondents expect a
However, there are still a 141 energy firms responded. Of the re- West Texas Intermediate (WTI) oil price
few question marks that will spondents, 91 were exploration and pro- of $93/bbl by year-end 2022; responses
linger through the year. duction firms and 50 were oilfield equip- ranged from $50/bbl to $200/bbl, Table 1.
ment/service firms. Survey participants expect Henry Hub nat-
ural gas prices to average $4.57 per million
ŝ MICHAEL PLANTE and KUNAL PATEL, Special questions asked of executives British thermal units (MMBtu) at year-
Dallas Federal Reserve Bank for this quarter include an annual update end, Table 2. For reference, WTI spot pric-
on breakeven prices by basin; expected es averaged $103.07 per barrel during the
firm growth in crude oil production; survey collection period, and Henry Hub
Activity in the oil and gas sector accel- anticipated changes in employee head spot prices averaged $4.65 per MMBtu.
erated during first-quarter 2022, accord- counts for 2022; the oil price needed to re- One of the special questions posed
ing to oil and gas executives responding turn publicly traded producers to growth to executives was “In the top two areas in
to the Dallas Fed Energy Survey. The mode; and the primary reason that pub- which your firm is active, what WTI oil
business activity index—the survey’s
broadest measure of conditions facing Table 1. What do you expect the Table 2. What do you expect the
WTI crude oil price to be at the end Henry Hub natural gas price to be at
Eleventh District energy firms—jumped of 2022? the end of 2022?
from 42.6 in the fourth quarter to 56.0, Dollars per barrel Percent of companies Dollars per MMBtu Percent reporting
reaching its highest reading in the survey’s < 70 4 < 3.50 2
six-year history, Fig 1. 70.00–79.99 12 3.50–3.99 10
80.00–89.99 30 4.00–4.49 30
OVERVIEW 90.00–99.99 25 4.50–4.99 28
The Dallas Fed conducts the Dallas Fed 100.00–109.99 12 5.00–5.49 16
Energy Survey quarterly to obtain a timely 110.00–119.99 4 5.50–5.99 5
≥ 120 13 6.00–6.49 7
assessment of energy activity among oil
Source: Dallas Federal Reserve ≥ 6.50 2
and gas firms located or headquartered
in the Eleventh District (Texas, northern Fig. 1. Measurement of oil and gas activity in Federal Reserve District 11.
Louisiana, southern New Mexico).
Dallas Fed Energy Survey Business Activity Index
Index
Methodology. Firms are asked whether
80
business activity, employment, capital ex-
penditures and other indicators increased, 56
60 2022:Q1
decreased or remained unchanged com-
pared with the prior quarter and with the 40
same quarter a year ago. Survey responses
are used to calculate an index for each in- 20
dicator. Each index is calculated by sub- 0
tracting the percentage of respondents
reporting a decrease from the percentage -20
reporting an increase.
When the share of firms reporting an -40
increase exceeds the share reporting a de-
-60
crease, the index will be greater than zero,
suggesting the indicator has increased -80
over the previous quarter. If the share of 2016 2017 2018 2019 2020 2021 2022
SOURCE: Federal Reserve Bank of Dallas.
firms reporting a decrease exceeds the
World Oil® / APRIL 2022 53
MANAGEMENT ISSUES

price does your firm need to cover oper- sections other than Midland and Delaware. a new well? The results, as displayed in
ating expenses for existing wells?” The re- In non-shale plays, the figure is $38/bbl. Fig. 3, were very divided. They averaged
sults shown in Fig. 2 are quite interesting. An additional special question asked $48/bbl in the Eagle Ford and $50 to $54
Among shale plays in the 11th Fed District, was “In the top two areas in which in the various sections of the Permian.
they show a low of $23/bbl in the Eagle your firm is active, what WTI oil price But the price required to drill a new well
Ford shale to a high of $35/bbl in Permian does your firm need to profitably drill jumped to an average $60/bbl in non-
shale plays, and it climbed further to an av-
erage $69/bbl for shale plays outside the
Fig. 2. Special Question on price needed to operate existing wells. Eagle Ford and Permian.
In the top two areas in which your firm is active: What WTI oil price does your firm need to cover operating expenses for existing wells?
OIL PRODUCTION
Dollars per barrel
Oil production increased at a faster
90 Permian Permian
(Midland) Other U.S. (Other) Other U.S. pace, according to executives at E&P firms.
80 (Shale) (Nonshale) The oil production index rose sharply from
Permian
70 (Delaware) 19.1 in fourth-quarter 2021 to 45.0 in first-
60 quarter 2022. Similarly, the natural gas pro-
50 duction index advanced 14 points, to 40.0.
40 Eagle Ford $35
$38 Meanwhile, one of the special ques-
$33
$28 $29 tions asked was “By what percent do you
30 $23 expect your firm’s crude oil production
20 to change from fourth-quarter 2021 to
10 fourth-quarter 2022? The results for that
0 question can be seen in Table 3. Executives
5 19 17 11 22 51 from 82 E&P firms answered this question
Number of responses during the survey collection period. Small
NOTES: Lines show the average, and bars show the range of responses. Executives from 84 exploration and production firms answered this question
during the survey collection period, March 9–17, 2022.
firms are defined as producing less than
SOURCE: Federal Reserve Bank of Dallas.
10,000 bpd in fourth-quarter 2021, while
large firms produced 10,000 bpd or more.
Fig. 3. Special question on price needed to drill wells profitably. Responses came from 62 small firms and
20 large firms. As can be seen, the answers
In the top two areas in which your firm is active: What WTI oil price does your firm need to profitably drill a new well?
were spread out over a variety of ranges,
Dollars per barrel
although smaller firms tended to project
180 larger growth rates, and larger operators
Other U.S. Other U.S.
160 (Nonshale) (Shale) were more restrained.
140
120 COSTS/FACTORS
Permian Permian Costs increased for a fifth straight quar-
100 (Midland) (Other)
Eagle Ford Permian ter. Among oilfield equipment/service
80 (Delaware) $69
$54 $60 firms, the index for input costs increased
60 $48 $50 $51 from 69.8 to 77.1—a record high. Only
40 one of the 50 responding oilfield equip-
20 ment/service firms reported lower input
0 costs this quarter. Among E&P firms, the
5 19 17 23 47 10 index for finding and development costs
Number of responses advanced from 44.9 in fourth-quarter
NOTES: Lines show the average, and bars show the range of responses. Executives from 83 exploration and production firms answered this question 2021 to 56.0 in first-quarter 2022. Addi-
during the survey collection period, March 9–17, 2022.
SOURCE: Federal Reserve Bank of Dallas. tionally, the index for lease operating ex-
penses also increased, from 42.0 to 58.9.
Table 3. By what percent do you expect your firm’s crude oil production to change from Both indexes reached highs for the sur-
fourth-quarter 2021 to fourth-quarter 2022? vey’s six-year history.
Percent of respondents Given the rising costs, one would logi-
Response Large firms Small firms cally want to know at what oil price pro-
Less than 0% 0 10
ducers think that they can opt for produc-
0% 25 11
tion growth. Accordingly, another special
More than 0% but not more than 5% 25 5
More than 5% but not more than 10% 20 18
question asked them, “What West Texas
More than 10% but not more than 20% 15 23
Intermediate crude oil price is neces-
More than 20% but not more than 30% 0 11 sary to get publicly traded U.S. producers
More than 30% 15 23 back into growth mode?” As displayed in
Median growth, percent 6 15 Fig. 4., roughly 40% of executives said a
Source: Federal Reserve Bank of Dallas. price of $80/bbl to $99/bbl. Another 20%
54 APRIL 2022 / WorldOil.com
 MANAGEMENT ISSUES

of respondents said $100/bbl to $119/

bbl, and a few went much higher. Inter- Fig. 4. Special question on price level needed to prompt greater activity by producers.
estingly, nearly 30% said that whether to What West Texas Intermediate crude oil price is necessary to get publicly traded U.S. producers back into growth mode?
grow production was not dependent on Percent of respondents
any specific price. 45
Following onto that topic, another spe- 40
cial question asked executives, “Which of
35
the following is the primary reason that
publicly traded oil producers are restrain- 30
ing growth despite high oil prices?” As 25
seen in Fig. 5, the number-one answer, 20
by far, was “investor pressure to maintain
15
capital discipline,” at 59%. The remaining
41% of executives answered either, “other,” 10
“ESG,” “lack of access to financing,” or 5
“government regulations.” 0
$80‒$99 $100‒$119 $120‒$139 $140‒$159 ≥$160 Not dependent
on price
OFS SECTOR NOTE: Executives from 123 oil and gas firms answered this question during the survey collection period, March 9–17, 2022.
Oilfield equipment and service firms SOURCE: Federal Reserve Bank of Dallas.
reported improvement across all indica-
tors. The equipment utilization index re- Fig. 5. Special question on factors holding back production growth.
mained elevated, but it edged down from Which of the following is the primary reason that publicly traded oil producers are restraining growth despite high oil prices?
51.1 in fourth-quarter 2021 to 50.0 in first- Percent of respondents
quarter 2022. The operating margin index 60
advanced from 11.6 to 21.3. The index of
prices received for services jumped from 50
30.3 to 53.2, a record high.
40

EMPLOYMENT TRENDS 30
All labor market indexes in the first
quarter reached record highs, pointing to 20
strong growth in employment, hours and
wages. The aggregate employment index 10
posted a fifth consecutive positive read-
ing and increased from 11.9 to 28.0. The 0
Investor pressure to Other Environmental, social Lack of access to Government regulations
aggregate employee hours index jumped maintain capital and governance issues financing
from 18.0 to 36.0. The aggregate wages and discipline
benefits index also rose, from 36.6 to 54.0. NOTE: Executives from 132 oil and gas firms answered this question during the survey collection period, March 9–17, 2022.
Six-month outlooks improved signifi- SOURCE: Federal Reserve Bank of Dallas.
cantly, with the index climbing from 53.2
last quarter to 76.3, a record high. The out- Table 4. How do you expect the number of employees at your company to change from
December 2021 to December 2022?
look uncertainty index also jumped from Percent of respondents
-1.5 to 31.9, suggesting uncertainty be- Response All firms E&P Services
came much more pronounced this quarter. Decrease significantly 1 1 2
One additional special question asked Decrease slightly 3 5 0
executives, “How do you expect the num- Remain the same 51 63 32
ber of employees at your company to Increase slightly 37 31 48
Increase significantly 7 0 18
change from December 2021 to Decem-
Note: Percentages may not sum to 100, due to rounding. Source: Federal Reserve Bank of Dallas.
ber 2022?” As detailed in Table 4, the
leading answer was “remain the same,” MICHAEL PLANTE joined the Federal Reserve Bank of Dallas in July 2010. Recent
with 51% of all companies selecting that research has focused on topics, such as the economic impact of the U.S. shale oil
boom, structural changes in oil price differentials and macroeconomic uncertainty.
answer. Yet, there were differences. A He has also been the project manager of the Dallas Fed Energy Survey since its
whopping 63% of E&P firms chose this inception in 2016. Mr. Plante received his PhD in economics from Indiana University
answer, while only 32% of service compa- in August 2009.
nies did the same. The “increase slightly”
option was chosen by 37% of all firms, but KUNAL PATEL is a senior business economist at the Federal Reserve Bank of Dallas.
He analyzes and investigates developments and topics in the oil and gas sector.
that also broke out to 31% of E&P firms Mr. Patel is also heavily involved with production of the Dallas Fed Energy Survey.
and 48% of service companies. Overall, Before joining the Dallas Fed in 2017, he worked in a variety of energy-related
positions at Luminant, McKinsey and Co., and Bank of America Merrill Lynch. Mr.
it’s a somewhat optimistic outlook for up- Patel received a BBA degree from the Business Honors Program at the University
stream employment. of Texas at Austin and an MBA in finance from the University of Texas at Dallas.

World Oil® / APRIL 2022 55

 THE ENERGY TRANSITION – OFFSHORE WIND

Global offshore wind capacity achieves record growth

After a record year in 2021,
projections suggest that
global offshore wind may
reach 712 farms, 29,000
turbines and 235 GW by
2030, including 96 farms,
1,300 turbines and 14.5 GW
in floating facilities.
ŝ STEPHEN GORDON, Clarksons Research
Offshore wind continues to play a vi-
tal role in the global Energy Transition. It
was another record breaking year in 2021
for the offshore wind industry, with re-
cord start-ups (84 farms, 18.5 GW, 3,400
turbines) increasing global active capacity
58% to an all- time high of 50.5 GW, Fig. 1.
This takes offshore wind to approximate-
ly 0.3% of total global energy supply: our
energy transition modeling suggests this
Fig. 1. Exemplified by this wind farm complex offshore northern Germany, active
offshore wind capacity shot up 58% during 2021. Image: RWE.
could reach 6% to 9% by 2050 and gener-
ate 4,870 TWh to 5,990 TWh of power.
China led the way for new capacity ad-
ditions and overtook the UK as the largest
offshore wind market. The country has 16
GW coming online, mostly in the final two
months of 2022, ahead of the expiration of
a government subsidy deadline at the end
of the year. New capacity additions were
more modest in Europe, as 1.8 GW were
fully commissioned, with 17 GW current-
ly under development in the region.
Offshore wind project CAPEX com-
mitments reached $44.6 billion in 2021
(the second-highest total on record), with
a number of significant projects reaching
FID. These include the first utility-scale
offshore wind project in the U.S. (Vine-
yard Wind, 806 MW, Fig. 2). In Europe
alone, $18.7 billion of project CAPEX
were committed to offshore wind projects
(compared to the $10.3 billion commit-
ted to offshore oil and gas projects).
The crown jewel in European proj-
ects is Dogger Bank Wind Farm. It is an
offshore wind farm being developed in
three phases–Dogger Bank A, B and C–
located between 130 km and 190 km
from the North East coast of England at
their nearest points, Fig. 3. Collectively,
these phases will become the world’s larg-
est offshore wind farm. Each phase will
have an installed generation capacity of
1.2 GW and represents a multi-billion
pound investment. Combined, they will
have an installed capacity of 3.6 GW and
will be capable of powering up to 6 mil-
lion homes.
The “wind” vessel market continued
to evolve, reaching nearly 1,100 vessels by
year’s end. Global wind turbine installa-
tion vessel (WTIV) utilization averaged
83% during 2021 (up 6 percentage points
y-o-y), while exceptional demand for ves-
sels off China consistently kept utilization
over 90% in the second half of the year.
Rates responded, with the average dayrate
assessment for third-generation WTIVs
in Europe up 18% across the year, in ad-
Fig. 2. Under construction offshore
Massachusetts, Vineyard Wind is the
first utility-scale offshore wind project in
U.S. federal waters of the Atlantic. Map:
Vineyard Wind JV.

56 APRIL 2022 / WorldOil.com

dition to increases in the commissioning/
service operation vessel (C/SOV) mar-
ket. Dayrates reportedly quadrupled off
Guangdong in China during the middle
of the year.
Record newbuild investment devel-
oped during 2021, with over $4 billion
of orders placed and increasing focus on
alternative fuels and Energy Saving Tech-
nologies (ESTs). This included over 17
(plus 9 options) WTIV newbuild con-
tracts placed (totalling ~$2.5 billion), the
highest yearly total on record, while 15
C/SOVs were ordered (totalling ~$800
million), also the highest number on re-
cord, plus 39 CTV contracts placed.
Both OEMs and wind farm develop-
ers came under pressure from rising ma-
terial costs in 2021. Chinese steel prices
averaged $827/tonne during the year (up
47% y-o-y), while annual average copper
prices increased 51% to $9,317/tonne.
Lower-than-average wind speeds in much
of Europe also limited power output from
offshore wind farms, reducing the vol-
umes that operators could sell into the
market. Offshore wind farms in Germany
generated 23.5 TWh of power in 2021,
compared to 26.9 TWh in 2020.
Power prices in Europe surged in 2021,
due to a tightness of gas supplies and low-
er average wind speeds. Day-ahead elec-
tricity prices averaged €97.75/MWh in
Germany in 2021 (more than triple their
level in 2020) and €103.55/MWh in the
Netherlands (up 236%, y-o-y).
During 2022, we are projecting a
healthy 9.5 GW of offshore wind capac-
ity will come online (involving 1,400 tur-
bines), bringing the fully commissioned
global total to 60.0 GW. Offshore wind
CAPEX commitments are expected to to-
tal some $55 billion, just below the record
of $56 billion in 2020.
Fig. 3. The jack-up vessel that will enter
service for the first time to install the
turbines on Dogger Bank Wind Farm was
officially launched in January 2022. Image:
Dogger Bank Wind Farm.
THE ENERGY TRANSITION – OFFSHORE WIND
Our longer-term projections suggest
that the global offshore wind sector may
reach 712 farms involving over 29,000 tur-
bines and 235 GW by 2030 (current capac-
ity: 250 farms, 10,800 turbines, 50.5 GW).
FLOATING OFFSHORE WIND
Within the overall offshore wind mar-
ket are floating offshore wind installa-
tions and projects. While “floating wind”
is only a small part of the offshore wind
industry today (only 10 projects of 124
MW are active, with a further 8 projects
of 165 MW under construction), strong
growth is expected from the middle of the
2020s as the sector reaches commercial-
ization. Our projections suggest that 96
farms, 14.5 GW and 1,300 turbines could
be active by 2030.
Floating wind is likely to open up new
regional markets, where development
has, so far, been unfeasible. Countries
with significant numbers of floating wind
projects already proposed include the UK
(31.1 GW), Australia (13.8 GW) and the
U.S. (10.7 GW). Over 150 floating off-
shore wind projects (totaling over 100
GW) have been mooted by developers
in 21 countries/regions, with 37 having
nameplate capacities >1 GW.
As the floating sector moves toward
commercialization, the industry has pro-
posed a variety of foundation designs (at
least 12). Semi-sub foundations are the
most common design in projects pro-
posed (over 1,200 mooted, compared to
the combined ~350 across spar, barge
and TLP turbine solutions).
Floating wind poses new installation
challenges for developers, and our analy-
sis has examined which contractors and
Fig. 4. Equinor’s Snorre and Gullfaks platforms offshore Norway will be powered by the
firm’s Hywind Tampen floating offshore wind farm.
yards have already been active in the sec-
tor. We’ve also looked at the demands on
the installation and support fleet, port in-
frastructure and the unique maintenance
requirements of floating wind farms.
Leading developers of floating wind
to date include Equinor (2 farms, 32
MW active, with 1 farm / 88 MW un-
der development); Cobra (2 farms, 50
MW active); Ocean Winds (1 farm, 30
MW active); and Windplus (1 farm, 25
MW active). In terms of potential capac-
ity, leading developers include BlueFloat
(8.5 GW); Hexicon (7.7 GW); Oceanex
(7.4 GW); Aqua Ventus (5.1 GW); and
Scottish Power (5.0 GW). Contractors
involved in turbine installation to date
have included DOF Subsea (11 turbines
under development); Saipem (5 turbines
installed); Bourbon (5) and Boskalis (5).
Equinor is developing the first floating
offshore wind farm, Hywind Tampen, to
supply renewable power to oil and gas in-
stallations in Norway, Fig. 4. The Snorre
and Gullfaks oil and gas platforms will be
the first ever powered by a floating off-
shore wind farm.
The broader offshore wind industry
continues its exciting growth phase. Our
long-term scenarios suggest offshore wind
will play a vital role in energy transition and
may provide between 6% and 9% of global
energy supply by 2050. Data as of February
2022: for updates contact Clarksons.
STEPHEN GORDON has been global head
of Clarksons Research since 2012 and leads
a team of 150 experts providing widely
respected data and intelligence around
shipping, trade, offshore and energy. Clarksons
processes and analyzes millions of data
points each day, supporting thousands of
organizations across the maritime.
World Oil® / APRIL 2022 57
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World Oil® / APRIL 2022 59


U.S. industry adapts to new normal
Despite WTI surging to an 11-year high
of $108.50/bbl in March, U.S. shale oper-
ators resisted ramping-up drilling activity
and remained disciplined with capital ex-
penditures. The speed at which new rigs
have been deployed to the field is consid-
erably less than in previous up-price cycles.
Most U.S. shale companies are being con-
servative, as priorities remain focused on
funneling record free cash from this year’s
oil rally into share buybacks, dividends,
debt reduction and acquisitions rather
than drilling new wells. However, this new
fiscal responsibility has been forced on the
industry and is not voluntary.
This point was hammered home at
the American Association of Drilling En-
gineers Fluids Technical Conference and
Exhibition in a keynote address on April
19 by Richard Spears, managing director
of Spears & Associates. Spears’ talk, titled,
How extreme financial discipline impacts
drilling activity in 2022 and 2023, outlined
what has caused oil companies to display
uncharacteristic financial restraint, despite
surging oil prices.
No more boom/bust cycles. Spears
outlined the familiar boom-and-bust cy-
cle saying, “for decades, the relationship
between oil price and U.S. land drilling
activity was correlated and predictable, be-
cause with high oil prices, capital and debt
surged into the industry to pursue reserve
growth and production growth. However,
in 2019, that came to a screeching halt, as
a new generation of investors demanded
their money back in the form of dividends
and debt reduction. Every old relation-
ship between oil price and rig count was
thrown out the window, never to return.”
Other factors include high company debt
and the tainting and subsequent defund-
ing of our industry initiated by the ESG
movement. Also, there is hyper-inflation
caused by rig/tool shortages created by
underinvestment by the OFS sector.
Opportunity for DUC reduction. For
many operators, this environment is a per-
fect opportunity to draw down their DUC
inventories, which has helped reduce
60 APRIL 2022 / WorldOil.com
THE LAST BARREL
CRAIG FLEMING, TECHNICAL EDITOR
capital expenditures while maintaining
production levels. And according to the
March 2022 tally by EIA, the DUC total
stood at 4,273, a reduction of 2,639 wells
on a y-o-y basis. In the Permian basin, op-
erators have completed 1,854 DUC wells
during the last 12 months, a reduction of
59%. The Permian count now stands at
just 1,309 wells waiting on completion. It’s
the 20th straight month of declines in the
West Texas/New Mexico field, leaving the
lowest inventory of DUCs in the largest
U.S. oil field since February 2017. Six of
the seven basins counted in the EIA report
show reductions, with the exception of the
Haynesville, where the DUC total stands
at 383, an 18% increase on a y-o-y basis.
U.S. shale production expected to
grow. In spite of the lack of investor fund-
ing and free-flowing bank loans, crude
production in the U.S. has recovered con-
siderably from the lows seen during the
first wave of the Covid-19 pandemic, and
the brief price war between Saudi Arabia
and Russia (GlobalData). The U.S. pro-
duced approximately 11.5 MMbopd in
February 2022, a 19% gain over the May
2020 production of 9.7 MMbopd.
“As most countries have eased Covid
restrictions, global oil demand is anticipat-
ed to rise over the coming months. In line
with this demand growth, the U.S. shale
oil production is expected to increase fur-
ther and could potentially reach pre-pan-
demic levels by 2023,” says GlobalData
Analyst Ravindra Puranik. The EIA pre-
dicts WTI futures to average $113/bbl
in May, and possibly remain in this range,
depending on the duration of the Rus-
sia-Ukraine military conflict. “Oil prices
were on an upward trend before the start
of the Russia-Ukraine war, as global de-
mand was projected to outweigh supply in
2022. Since then, several majors, including
BP, Shell and ExxonMobil, have decided
to exit from the Russian oil and gas indus-
try amid concerns over Western sanctions.
Some of these companies may divert their
capital—which was earlier allocated for
Russian assets—to the U.S. shale fields, as
the prevailing high prices make shale drill-
ing highly profitable,” Puranik concluded.
U.S. natural gas prices skyrocket.
The Russia-Ukraine war also helped drive
natural gas prices at Henry Hub to a 13-
year high during the first half of April,
topping $6.7/MMBtu. Colder-than-nor-
mal temperatures in the northern U.S. and
Canada were also a factor. The elevated
domestic and export demand from Eu-
rope has brought U.S. storage to a low-
er-than-average level at this time of the
year, helping to sustain higher prices (Rys-
tad). While Europe has banned the import
of Russian coal, and a few countries have
banned Russian oil, gas flows from Russia
to Europe increased 20% in March, com-
pared to February. This suggests it will be
some time before Russian gas exports are
targeted, which may create a temporary
sense of confidence in the market. How-
ever, with the rubles payment deadline
looming, and the anticipated escalation of
the situation in Ukraine, any relief for gas
markets may be temporary.
Change is painful. The U.S. oil in-
dustry has a long and proud history of
suppling crude markets, and now we also
export natural gas. The energy crisis trig-
gered by Russia’s invasion of Ukraine has
created a new demand that will drive bil-
lions of dollars of investment in the global
oil and gas industry. The U.S. and Europe-
an countries are planning new LNG termi-
nals that will be in service for decades and
U.S. suppliers will be pressed to fill a supply
gap for nations moving away from Russian
gas. And despite opportunistic statements
about greens potential, consumption and
demand are returning to pre-Covid event
levels. Until proven otherwise, hydrocar-
bons still drive our economy and are de-
livering the reliable, cost-effective energy
we require to get us through another dif-
ficult situation and beyond. Maybe the
green guys could stop kicking our indus-
try (at least momentarily), and just say
“thank you.”
ŝ CRAIG.FLEMING@WORLDOIL.COM
 2022
OCTOBER 13, 2022
THE HOUSTONIAN | HOUSTON, TEXAS

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