June 2019

Beyond efficiency into the next S-curve of production

For the last five years, our industry has focused on reducing cost through operational efficiency and supply chain management.
Eric Carre / Halliburton

For the last five years, our industry has focused on reducing cost through operational efficiency and supply chain management. We’ve worked on standardization and lean-based initiatives. In addition, there have been many procurement-driven initiatives aimed at price compression through contract tendering and pricing negotiation.

Efficiencies yield lower break-evens. The impact of these initiatives is evident in reduced break-even prices. The break-even for unconventional resources in the U.S. fell from $70/bbl to the $30-40s/bbl, and we are producing 3 MMbbl more per day, using approximately half the rigs. The deepwater segment has followed suit, with some projects around the $30-40 mark. That would have been unimaginable a couple of years ago.

Now, the gains we have achieved from these initiatives are starting to plateau, and cost inflation is setting in. Global activity is increasing, and pressure on returns from investors is high. The next round of value creation will need to come from increasing production and recovery rates.

More value from increased production/recovery. Better technology and improved collaboration will allow us to achieve this, especially in ever more challenging E&P environments. There are many opportunities to improve full-cycle production during well construction, completion and production.

During well construction, sweet spot identification, and ensuring wellbore integrity for the well’s entire life, will allow maximium production. In unconventionals, reducing well interference and maximizing fracture complexity will drive improved production. During production, flow assurance, artificial lift, and secondary recovery can help optimize returns.

In a recent completion job, reservoir heterogeneity and the varying thickness of target zones posed a number of challenges in the design and execution of an effective fracturing treatment. It made even distribution of fluid and proppant across the clusters difficult to achieve. To solve these challenges, we worked closely with our customer to engineer a solution focused on improving cluster efficiency through automation during the formation breakdown phase. We combined real-time information from our equipment, pressure response from the reservoir, and our algorithms to control the breakdown process. This allowed us to consistently maximize the cluster efficiency of every stage and increase production, compared with a manual operation. With the permanent installation of fiber-optic cable, we also were able to validate the fluid and proppant distribution in each cluster in real time. We reduced the variability in the flowrate per cluster up to three times, which yielded significant production gains.

Drilling advances. For well construction, a customer faced challenging deepwater drilling conditions that included exploring a new part of the reservoir. The drilling window was very tight, one of the most complex wells this operator ever planned.

Halliburton deployed several cutting-edge technologies, including a new real-time ultra-deep resistivity LWD service that allowed the operator to “see” 200 ft radially. The data also enabled us to create the first-ever commercial 3D inversion of ultra-deep resistivity in a reservoir section, showing exactly where the secondary pay zones were located. After we identified the formation sweet spots, we had to place the well within a narrow target. Using automated drilling and a digital twin of the well, we placed the well more accurately and improved reservoir exposure.

Well integrity. Finally, for producing assets, well integrity is critical to maintaining production. We had a customer that needed to pinpoint the source of a leak in a well and determine if there were other potential corrosion issues across multiple casing strings. Working collaboratively, we used two different technologies to tackle the challenge. Using a proprietary technique for measuring acoustic energy allowed us to accurately identify the radial and vertical location of the leak in real time. Then, by using high-definition electromagnetic technology that can determine metal loss across five casing strings, we were able to identify two other areas of well thinning from corrosion. Based on the information provided, our customer determined the best course of action.

In conclusion, existing efficiency initiatives have been helpful up to a point, but they will only get us so far. We need to start looking for new ways to increase returns, and that requires an increased focus on production and recovery rates. Collaboration and technology will be key.

About the Authors
Eric Carre
Eric Carre is Executive Vice President of Halliburton Global Business Lines and Chief HSE Officer for Halliburton. He is a member of the company’s executive committee. Mr. Carre began his career with Halliburton in 1991 as a project enginerer and manager of technology, holding multiple operational and leadership roles worldwide. He holds a master’s degree in mechanical engineering from Université Libre de Bruxelles in Belgium, and an MBA in finance from the University of Wisconsin in Madison.
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