September 2016

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : SEPTEMBER 2016

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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)

September 2016 ISSUE

Percussion or Cable Tool Onshore Drilling Method

The Earth has been explored for valuable resources since recorded history. Ancient civilizations began the process of exploration by digging for water and irrigation. At first, these wells were primarily dug by hand, then by stone or wood tools. The first recorded instance of the practice of ‘drilling’ holes in the ground came about around 600 B.C., when the Chinese developed a technique of repeatedly pounding bamboo shoots capped with metal bits into the ground. This method is referred to as Percussion Drilling, an onshore drilling method that is still used today. In this issue of the Petroleum Update, we will look at a brief overview of the cable tool drilling technique used in the onshore drilling arena.

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Onshore drilling is simply land based drilling facilitated by ground transportation. The two main types of onshore drilling are percussion and rotary drilling. Percussion drilling is also referred to as ‘cable tool’ drilling. This method consists of raising and dropping a heavy metal bit into the ground, effectively punching a hole down through the earth. Cable tool drilling is usually used for shallow, low pressure formations. Although this drilling method has largely been supplanted in recent years by other, faster drilling techniques, it is still the most practicable drilling method for large diameter, deep bedrock wells, and in widespread use for small rural water supply

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Percussion Drilling: Onshore Drilling Method wells. The impact of the drill bit fractures the rock and in many shale rock situations increases the water flow into a well. This manual drilling technique employs a heavy cutting or hammering bit attached to a rope or cable and lowered in the open hole or inside a temporary casing. This temporary casing of steel or plastic is used to prevent the hole from collapsing. When the permanent well screen and casing are installed, this temporary casing has to be removed. By moving the rope or cable up and down, the cutting or hammering bit loosens the soil or consolidated rock in the borehole, which is then extracted later. This type of technique is usually suitable for unconsolidated and consolidated formations: Sand, silt, stiff clays, sandstone, laterite and gravel layers that are generally up to depths of 25 meters.

function in the drilling process. The cable tool bit is usually massive and heavy so as to crush and mix all types of materials. The drill stem gives additional weight to the bit, and its length helps to maintain a straight hole when drilling in hard rock. Drilling jars consist of a pair of linked, heat-treated steel bars. When the bit is stuck, it can be freed most of the time by upward blows of the free-sliding jars. The swivel socket connects the string of tools to the cable; in addition, the weight of the socket supplies part of the upward energy to the jars when their use becomes necessary. The socket transmits the rotation of the cable to the tool string and bit so that the rock is cut on each down stroke, thereby ensuring that a round, straight hole will be cut. The wire cable that carries and rotates the drilling tool is called the drill line. Its main purpose is to twist the tool joint on each Cable tool drilling equipment consists of five major upstroke to prevent it from unscrewing. A component components: drill bit, drill stem, drilling jars, swivel worth mentioning is known as a bailer. Bailers used to socket, and cable. Each component has an important

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remove the mud or rock slurry consists of a pipe with a check valve at the bottom. The valve may be either a flat pattern or a ball and tongue pattern called a dart valve.

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formations. Onshore drilling has many different challenges related to industry economics, equipment used, location of the field, well profile and formations. Rig day rates make running a rig expensive, which means that the speed of rigging down, moving and rigging up is crucial to guarantee project success. Drilling equipment has to be reliable and easy to handle on the rig floor. The physical location of the well site sets limits on the size and type of drilling equipment and sometimes the drill string. Well sites in Arctic areas, for example, have surface equipment and downhole equipment that are exposed to surface temperatures for long periods before use, which can impact their performance.

The advantages of this method include the fact that unlike any other drilling method, percussion can remove boulders and break harder formations, effectively and quickly through most types of earth. It also works with most ground conditions and can drill hundreds of feet (one well hand-drilled in China in 1923 was over 4000 feet deep). Also, rigs are relatively inexpensive and are simple in design and require a little sophisticated maintenance, borehole is stabilized during the entire drilling operation, recovery of reliable samples is possible from every depth unless heaving conditions occur, wells can be drilled in areas where a little makeup water exists, wells can be constructed with little chances of contami- Cable tool drilling was one of the first methods used to nation and the driller maintains intimate contact with drill a borehole. It is said to have been in existence for the past 4,000 years, originating in China. Traditionally, the drilling process. cable tools constructed from bamboo were used to drill However, some disadvantages of the cable tool method for brine. It is said that depths up to 3,000 feet (914 m) include low penetration rates, high casing costs in ad- have been recorded. Cable drills were used for projects dition to the fact that when the temporary casing has such as drilling boreholes in the search for shallow oil to be used, the time taken driving and removing it can and gas wells in the Alps. The cable tool as it is known significantly increase drilling time. Also, the equip- today was invented in 1825. ment can be very heavy and relatively expensive; the method can prove to be slow especially in harder rock

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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : SEPTEMBER 2016

PETROLEUM NEWS & HAPPENINGS LNG To Fire Up Bogue Plant In Early October [...]...Read more Gas Prices Down $1.90, Diesel Down $2.43 [...]...Read more

Caribbean Energy Guyana Urged To Take Lessons From Ja. On Putting Oil To Use [...]...Read more Petrojam Assures Fuel Supply As Tropical Storm Matthew Approaches [...]...Read more

New Fortress Energy Does More Dredging [...]...Read more Oil up 2 Percent on Producer Deal Speculation; Gasoline Dips [...]...Read more LNG Marine Terminal For Set Up In Portland Bight Area [...]...Read more Gas Prices Down $2.73, Diesel Down $1.29 [...]...Read more OPEC Oil Consensus Taking Shape [...]... Read more

JGRA Says Energy Minister’s Intervention Averts Petroleum Crisis [...]...Read more

Dreams Of Wealth, Fears Of Problems As Guyana Finds Oil[...]...Read more

Petrojam Dilemma – Jamaica, Venezuela Showdown Looms Over Upgrade [...]...Read more

JPS Spends $36 Million on Road Leading to Site of New Power Plant [...]...Read more

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Prices at the Pump SEPTEMBER 2016

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Retail prices for Regular Unleaded Gasoline in the thirteen Caribbean countries reviewed at the end of September 2016 showed a minimal decrease in prices for Belize and the Cayman Islands. Bahamas, Dominica, Jamaica and St.Lucia recorded price increases between 1.5% and 3.8%, the highest of which was recorded in Dominica. Prices in the remaining seven countries were stable. The average retail price for period remained stable when compared to the previous month.

Regular Unleaded Gasoline: Average Retail Price (US$/Litre) January - September 2016 COUNTRIES ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] CAYMAN ISLANDS DOMINICA GRENADA (95 OCT) GUYANA JAMAICA 87 Octane[E10] MONTSERRAT ST. LUCIA ST. VINCENT/ GRENADINES TRINIDAD/ TOBAGO [92 OCT] AVERAGE RETAIL PRICES

1.60

JAN 1.11 1.01 1.36 1.07 1.08 0.80 1.06 0.95 0.91 0.87 0.86 0.87 0.42 0.95

FEB 1.03 0.95 1.35 1.03 1.08 0.78 1.04 0.85 0.86 0.76 0.80 0.78 0.42 0.90

MAR APR MAY JUN 1.03 1.03 1.03 1.03 0.97 0.94 1.05 1.09 1.32 1.39 1.36 1.42 1.09 1.16 1.21 1.24 1.03 1.03 1.06 1.12 0.74 0.76 0.76 0.84 1.01 1.05 1.10 1.13 0.85 0.85 0.88 0.90 0.88 0.91 0.98 1.03 0.76 0.92 0.92 0.92 0.78 0.82 0.82 0.92 0.78 0.78 0.78 0.78 0.42 0.42 0.42 0.42 0.90 0.93 0.95 0.99

Comparative Retail Pump Prices Regular Unleaded Gasoline September 2016 vs. 9Mths Avg (Jan-September 2016)

1.40

SEP

US$/Litre

1.20

9 Mths AVG

1.00 0.80 0.60 0.40 0.20 0.00

13 Caribbean Countries

See prices for all products at www.cippet.org

JUL 1.03 1.09 1.47 1.25 1.13 0.87 1.14 0.90 0.97 0.92 0.92 0.78 0.42 0.99

AUG 1.03 1.05 1.45 1.23 1.13 0.83 1.11 0.90 1.00 0.92 0.88 0.78 0.42 0.98

SEP 1.03 1.06 1.45 1.22 1.11 0.86 1.11 0.90 1.01 0.92 0.90 0.78 0.42 0.98

9 Mts AVG 1.04 1.02 1.40 1.17 1.09 0.81 1.08 0.89 0.95 0.88 0.85 0.79 0.42 0.95

NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.


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International OIL PRICES

CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : SEPTEMBER 2016

50.00

Average Weekly and Monthly Crude Oil Prices July - September 2016 48.17

48.00 US$/Bbl

46.00 45.96

44.00

38.00 36.00 Period

45.00

44.34

42.00 40.00

40.82

WK1

WK2 Jul-16

WK3 Aug-16

WK4

MTH AVG

Sep-16

Average Monthly Crude Oil Prices 2013-2015 120.00

106.61

105.78

100.00 US$/Bbl

Analysis of International Crude Oil Prices from July to September 2016 period showed an average price of US$45.00/bbl . This average price was 2.4% lower than the average price seen in July 2016 and 1% higher than the average price in September 2016. The highest weekly price seen in September 2016 for the commodity was US$45.96/bbl-reflected in week two while week three accounted for the lowest price of US$44.34/bbl. Overall, the lowest price recorded for the period was US$40.82 in week one of August 2016. The highest price for the three month period was US$48.17/bbl recorded in July 2016. The average price reported in September 2016 was 1.7% lower than the average price recorded in September 2015.

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80.00 60.00

59.91

40.00 20.00

2013

2014

2015

0.00

Period

FEATURED OFFERS: P E TS TATS   -   t h e   Ca r i b b e a n   E n e rg y   I n fo r m at i o n System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.

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