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The extreme world of oil industry

Message From The Chief Editor

Message from The Chief Editor Let me first of all take this opportunity to wish all our readers a very happy , peaceful and prosperous new year. Finally after great efforts, sleepless nights, hard working, loyalty and firm management, we were able to achieve our goal and publish our first issue of the zero volume of Petropulse magazine the AAPG SU SC official magazine. Congratulations all SU SC-AAPGIANS& being proud of being the first chief editor of our first magazine issue, I’d like to show my great gratitude to all who participated in searching, writing, editing and designing it.

Why a Magazine? 1) As magazine is the 2nd most powerful means of marketing after website according to the worldwide statistics, so having a magazine is more vital than TV Radio channel to show your work. 2) Magazine is the backbone of any big organization marketing systems to mark out its achievements. 3) Having a magazine with a predetermined target, powerful mission and clear vision means we AAPGIANS have put our feet on the way towards the top . Our vision: to have an outstanding well known magazine after a short time that will be suitable for different levels of students, engineers and professors. Our mission:1) Enrich our readers’ brains with various useful information on petroleum industry the biggest industry all over the world 2) Increase our chapter rank among worldwide ones through focus on our chapter achievements

3) Providing high professional advertising & publicity campaign suitable for different companies Our Target: to publish 4 issues of 4000 copies at least this year covering more than 30 petroleum articles What makes petropulse helpful? it’s more than some printed papers & more than a traditional magazine it’s a real magazine that will surely fulfill your petroleum interest through numerous scientific articles about new technologies , interviews with high experienced engineers, worldwide petroleum companies news , local petroleum companies news and petroleum economics. “We took the first step on the success road and added an additional new STAR to our chapter several STARS. Now it’s your turn, you should add new STARS to your life , you should start, continue, never stop and remember that success is never ending & failure is never final” Chief Editor Karim Magdy

February 2013



The extreme world of oil industry

Message from The Chapter Advisor

Message from The Chapter Advisor As faculty professors, we are most linked with today’s youth. I believe that their future is completely related to how we deal with them and how we treat them. We must believe in their capabilities and have complete faith that they CAN. I have been with AAPG SUSC (Suez university student chapter) for three successive years. We have successfully delivered this message. Through those years we empowered today’s engineers with the required technical andmore important- personal skills. The passion and hard work of those young students inspired me more and more and we decided never to stop as long as we can achieve this great vision. “Petropulse” is a step on our long journey. Our vision simply is supplying engineering society with a professional magazine suitable for different levels of petroleum engineers; students, engineers and professors. It covers different aspects and aims mainly to supply you with different issues as, new technologies in petroleum industries, interviews with field experts, most recent news of AAPG SUSC, students’ researches and many other topics. Petropulse will be certainly a great leap that will help more and more in reaching our main targets.


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I am completely proud of this great work and of the effort exerted to produce it as you see it now. Although those young engineers work with little resources, they know how to use it wisely and how to make use of all their talents. I am feeling so proud of being the advisor of those young professionals and of being a part of such successful organization. Finally I would like to invite everyone to share this vision with us. We LEAD in our field; we have no limits, every year the number of Aapgians increases more and more. We want to INSPIRE people around us and inspire the whole community; we want everyone to know his true value, unleash his capabilities and use it in the most effective way. We truly want to MAKE A DIFFERENCE in people’s way of thinking, actions and lifestyle. This couldn’t have been done without the hard work, creative ideas and enthusiasm of those young engineers. Simply, AAPG lead…inspire…make a difference.

My vision isn’t only to provide an engineer empowered with tough science, they should have a complete clear vision for their future and how they will participate in developing their community so we have to empower them with the talents to achieve both.

Dr. Ali Abbas

Ph.D of Geophysics , Caen , France Head of Geological & Geophysical Eng



The extreme world of oil industry


By : Karim Magdy Shawky El Sayed

Mr. Anil Mathur Stimulation Domain Manager (EEG), Schlumberger


efore beginning , we’d like to express our great gratitude for hosting us at your office and sparing us a portion of your valuable time

In any successful business there are four main factors that must coexist in harmony (man,money,machine&management) management is the spirit of these factors. In your opinion, what do you think it takes to be a successful manager? In addition to the technical capabilities required at all levels, a successful manager should first of all be a leader for his team and should lead his team by example. He should listen to the needs of his team, respond positively and effectively, and be able to deliver on the team objectives through the integration of hard work, diligence, integrity, and the efforts of the whole team he is leading.

We know you have made a lot of achievements during your career, feel free to enrich our readers with some of them especially the most outstanding one. In my career with Schlumberger, I started as a Field Engineer 23 years ago. Through persistence and perseverance, training and experience in several oilfields all over the world, I have been able to build a level of technical expertise that is recognized by my company. This technical expertise allows me to work with our esteemed clients and address their needs in the oilfield by working together as a team to realize the maximum potential of oil and gas wells in the field. My greatest achievement lies in being perceived as a trusted technical advisor by our clients wherever I have had the opportunity to work. Piano keys as known aren’t all white, but some are white and the others are black ,so facing challenges during any task is a must.What were the challenges that you had confronted and the procedures taken to prevent it? February 2013



The extreme world of oil industry

Interview Having worked in several countries I have had the chance to work with colleagues and clients from all over the world. The biggest challenge I have faced is breaking down the cultural barriers between people in order to work effectively as a team. To a certain extent I have been able to do this by making an effort to learn the local language, trying to appreciate and enjoy local cuisines, whether that means having vodka in Russia or a falafelsandwich in Cairo, and basically trying to fit into the local culture of any country that I have lived in with my family. Before directing our mind ship towards your company sea ,It is important for us to know what are the skills that you have gained during your career period? As I mentioned, in working for a major technology-driven company like Schlumberger, you acquire a lot of knowledge and skills by continuously learning and applying yourself in your job. Fortunately, I work for a company that places great emphasis on training its employees and has one of the largest R&E budgets in the oilfield services industry. I am constantly learning about new technologies, services and tools in my job and it’s a process I enjoy tremendously. All of this knowledge and expertise gained needs to be transferred to and applied in the field to address our clients’ needs. As a senior employee in the company, I also mentor and train our younger engineers in oilfield technology, a very important and rewarding part of my work and responsibilities.


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As we know, Schlumberger is present in over than 85 countries. What is unique about the way this company operates with its services? You are correct, Schlumberger operates worldwide in more than 85 countries - essentially we are operating wherever oil and gas is explored and produced. Since we hire from the local talent almost everywhere, this helps build tremendous diversity within the employee population, which is one of our main assets. The diverse population brings with it all kinds of expertise, experience, and knowledge which is freely interchanged through frequent personnel moves and transfers, segment and product bulletin boards, and online information exchanges. This helps foster a community feeling with a strong support culture aided by our product and research centers, to provide the best solutions to our clients. And What about the biggest problem facing Schlumberger in Egypt? While we haven’t experienced any major problems, Egyptian oil and gas fields are mature assets

and our operations span from the Western Desert to the Eastern Desert, from the Gulf of Suez to the Sinai Peninsula, in addition to offshore operations in the Mediterranean Sea. This geographical spread presents numerous logistical challenges compared to areas like North America. We are, however, able to provide full services to all our clients through operation bases located across the country. Latest statistics show that the number of employees working at Schlumberger is 113,000. Our readers especially fresh graduates are really curious to know how they can become the 113, 001 employee? At this stage of your student life, I would recommend that you study hard, maintain your grades, and keep a positive attitude in life. Schlumberger is always looking for bright men and women with wellrounded personalities to work in our organization at all levels. When you are about to graduate from college, contact your career services or placement office to check if Schlumberger is interviewing on your campus, and feel free to contact the Career & Staffing department listed on our public website at

Mr. Anil Mathur is the Stimulation Domain Manager for Schlumberger for the East Africa & Eastern Mediterranean (EEG) GeoMarket based in Cairo, Egypt. Mr. Mathur has 27 years experience in the oil and gas industry. His areas of expertise include Hydraulic Fracturing and Production Enhancement for oil and gas wells and mature fields. He is a member of the American Association of Petroleum Geologists AAPG.



The extreme world of oil industry

Interview As you mentioned above , slb is known with its unique&high-tech services ,(HiWAY flow tech) a new technology introduced by Schlumberger, tell us more details about its mechanism & major applications? HiWAY Channel Fracturing is a major technological breakthrough in the way we provide hydraulic fracturing services to our clients. The E&P industry has been trying to achieve infinite conductivity in fractures through cleaner fluids, and advanced breaker and proppant technologies. The HiWAY technique has been able to do so through a step-change in the design and execution of fracturing treatments. The technique can be used for vertical and horizontal wells, sandstone and carbonate reservoirs, and for both oil and gas reservoirs. As a new technology , it has some unique features & benefits over traditional ones What are these? The two unique features of HiWAY technology are the perforation strategy and the pumping operation in alternating pulses of clean fluid and proppant-laden slurry. This technique results in a ‘pillarand-column’ structure which is the key to providing the infinite-conductivity channels within the fracture, thus ensuring an open channel for hydrocarbon flow within the fracture with a minimum pressure drop. Better well performance is thus achieved compared to conventional treatments. Recently published in Schlumberger official website ‘’highway flow


technology hydraulic fracture will We have pumped fracturing treatminimize sand and water consump- ments utilizing the HiWAY techtion’’ what is your comment? nique for several of our clients in the Western Desert area. I am exThat is quite true - we have seen tremely encouraged by the initial that for similar fracture geometries, production results we have seen so the HiWAY technique utilizes less far, but of course we would like to proppant and less water compared see the results over a longer period to conventional fracturing tech- and perform a rigorous evaluation niques. This has implications on the of the production data compared overall logistics of the job, such as to offset wells that have been less water hauled to the well site, fractured using conventional techlower fuel costs, and a smaller foot- niques. print on location resulting in an overall lower environmental im- Before ending this interesting conpact. versation we have another last question. Can you give me three names of What about its limitations? famous people whether in the field or not that you admire and advice There are very few limitations, if any, our readers to follow their leads? for the technology and its applications. We are continuously striving This is a tough question as I adto stretch the limits of its applica- mire several people for different bility to ensure it can be pumped in qualities in different walks of life. all reservoirs at all given reservoir Abraham Lincoln is renowned for conditions and well configurations. his steadfast commitment to his ideals in the face of adverse opinAs we know in oil & gas industry ions and circumstances. I think very the economical factor is the most highly of Nelson Mandela for upvital one, does it cost much to use holding principles of human dignity this technology? and decency, and for attempting to instill these throughout his nation You’ll be surprised that the pricing and across the world. Carl Sagan is fairly comparable to the conven- is one of the brightest minds in his tional fracturing techniques. Again, field, and I am constantly amazed by the important thing to emphasize his inquisitiveness and the work he here is the improved well perfor- does towards making science intermance that we have seen with this esting and available to anyone. technique - not only in Egypt, but in other areas of the world including North America, Argentina, Russia, Saudi Arabia, Oman, and India. Is highway flow tech already applied in Egypt? If so what about the results? February 2013



The extreme world of oil industry

Petroleum New Technology

Microemulsion Technology This article presents a technical overview of microemulsion technology. Field applications are presented that demonstrate the efficiency of microemulsion fluids for removing S/OBM debris and filter cakes, reducing near-wellbore damage and improving well productivity.


ormation damage is a by-product of the drilling, completion, and production process and can be attributed to many factors. In openhole (OH) and cased-hole (CH) wells, hydrocarbon flow may be impeded by various damaging mechanisms caused by drilling and completion fluids, in-situ emulsions, water block, organic deposition, and oily debris left downhole. Microemulsion fluids have been successfully developed to effectively resolve the persistent problem of near-wellbore damage. The physicalchemical properties of these microemulsion systems include high oil solubilization, high diffusion coefficients through porous media, and the reduction of interfacial tension between organic and aqueous phases to near zero, making them excellent candidates for removing formation damage. The chemistry of microemulsion fluids make these systems excellent choices for superior synthetic or oil-based mud (S/OBM) displacements in casing and for OBM filter cake cleanup in openhole completion applications. Formulations have also been developed for casedhole perforation applications as well as postperforation remediation treatments to remove the formation damage around the perforation or fracture zone The three primary cleaning activities target: (1) casing displacement clean-out, (2) filter cake removal in OH completions that use sand control techniques and (3) the clean-out of perforation tunnels in the near-wellbore region.

Microemulsion Technology

Microemulsions are thermodynamically-stable, optically transparent solutions composed of two immiscible fluids. They differ from ordinary emulsions in that they can be prepared with little or no input of mechanical energy. They are typically composed of a nonpolar or oil phase, an aqueous phase, surfactant(s) and an optional co-surfactant. Depending on how they are formulated, they can exist in one single-phase or in a three-phase system, in which the middle-phase microemulsion is in equilibrium with excess water and oil. The formulation characteristics, phase type, and ultimately the cleaning efficiency of a microemulsion is dictated by the hydrophiliclipophilic balance between the surfactant(s) and the physico-chemical environment.7, 8 The microemulsions described in this study are singlephase in which oil and water are co-solubilized by the surfactant(s) and co-surfactants. The water/oil interface has a zero or near-zero curvature,


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Wael El Sherbeny Baker Hughes

indicative of the bicontinuous phase geometry that produces very low interfacial tension and the rapid solubilization of oil upon contact.9 The formation of a microemulsion itself does not ensure the fluid will solubilize oil effectively to leave surfaces water-wet. The microemulsion phase behavior and cleaning efficiency can be altered by salinity, surfactant, cosurfactant, oil type, temperature, and particulates. No two wells are identical and the physical and chemical conditions can vary greatly depending on the application. As a consequence, robust, optimized formulations are needed and validation testing is required to determine the efficacy of a microemulsion for a specific application, i.e., OBM displacement/cleanup and removal of formation damage in openhole and casedhole wells.

Field Applications

To illustrate the efficacy of the microemulsion technology in field applications, the following case histories are presented.


The extreme world of oil industry

Petroleum New Technology Case 1. In the gas fields of the Nile Delta, an operator drilled a calcareous, cemented sandstone reservoir with an OBM. While drilling, the operator entered a high-pressure zone and a saltwater influx occurred. During efforts to kill the well, 1,100 bbl of OBM was lost across the lower productive sand interval. As a result of a drop in hydrostatic pressure, the hole collapsed, forcing the customer to drill a sidetrack 4.5 meters away from the original hole. The sidetrack was drilled safely and when the well was brought on line, the lower zone did not contribute in the production. The lower gas zone, where the losses occurred, is calcareous cemented sandstone with permeability values ranging from 200 to 400 md. Stimulation using acid was restricted to avoid communication with the original wellbore and losing the well completely. The short horizontal distance between this well and the original wellbore also restricted a hydraulic fracturing solution. The high concentration of bridging materials, such as sized salt and sized calcium carbonate and the poor injectivity index, required a chemical stimulant that could diffuse into the rock matrix without applying high pressures. After reviewing all available drilling and completion fluid data, it was concluded that the salt water and lost OBM created an emulsion and was the cause of the lost production. After reviewing solutions from various vendors, the microemulsion treatment technology was chosen, primarily based on the oil-solubilizing and self-diffusion characteristics afforded by the ultra-low interfacial tension properties. The other treatment proposals submitted were

conventional surfactant/acid treatment designs that required energy force diffusion into the rock matrix. Due to placement restrictions, the microemulsion treatment was bullheaded down the tubing, gently squeezed into the rock matrix and allowed to soak overnight. Zone

Expected Production

Pretreatment Production

Posttreatment Production


10 mmcfpd

10 mmcfpd

10 mmcfpd


10 mmcfpd

0 mmcfpd

6.4 mmcfpd

The table shows the production data before and after the well was brought back on line and resulted in a 64% restoration of the expected gas production

Case 2. An operator in the Gulf

of Mexico drilling a well with a synthetic-based mud performed a clean-out operation before running completion screens. On this competitor well, initially a conventional solvent/surfactant spacer train was used to prepare the openhole and casing for the screen placement. After this first attempt to clean the wellbore, the BHA was pulled out of the hole. When the BHA reached the surface, it was covered with a viscous emulsion, After repeating the clean-out a second time with the conventional spacer train, the BHA was again covered with the viscous emulsion. The operator requested the microemulsion spacer system be pumped on third clean-out attempt to remove the damaging emulsions from the wellbore. Predicting that the bottom interval might also be contaminated with sludge, additional microemulsion

treatment fluid was sent to the rig to remove the sludge deposits and filter cake from the openhole section of the wellbore. the first attempt to remove the sludge from the BHA using microemulsion technology was very successful. In addition, due to the well producing 3,000 bopd through the completion screens, it was assumed that the remediation treatment was also successful in removing the sludge in the openhole.


We thank the management of Baker Hughes especially Nick Beeson (Egy-Syr Managing Director) and Emri Zein (Sales & Engineering Director) for allowing us to publish this paper.


1.Bennion, D.B., Thomas, F.B., Bietz, R.R., “Formation Damage and Horizontal Wells – A Productivity Killer?”, SPE 37138, 1996 Conference on Horizontal Well Technology, Calgary, Canada, 18-20 November, 1996. 2.Emiliani, C.N., Ripa, G., Sportelli, M., Cobianco, S., Del Gaudio, L., “ SPE 94712, SPE European Formation Damage Conference, 25-27 May 2005, Sheveningen, The Netherlands. 3.Van der Zwagg C.H., Benchmarling the Formation Damage of Drilling Fluids (2004) SPE 86544 4.Vickers, S., Bruce, S., Hutton, A., Nunzi, P., “Protect and Inject: Optimized Well Fluids Successfully Drill Depleted Reservoirs to Store Gas”, SPE 144798, SPE European Formation Damage Conference, Noordwijk, The Netherlands, 7-10 June, 2011. 5.Christian, C., Quintero, L., Clark, D., Jones, T., “Production Enhancement of Cased-Hole Wells Using Mesophase Fluids”, SPE 120602, SPE Saudi Arabia Section Technical Symposium, 9-11 May 2009, Al Khobar, Saudi Arabia, May, 2009. 6.Quintero, L., Jones, T., Pietrangeli, G., “Phase Boundaries of Microemulsion Systems Help to Increase Productivity”, SPE 144209, SPE European Formation Damage Conference held in Noordwijk, The Netherlands, 7–10 June 2011. 7.Shinoda K., and Friberg, S., “Microemulsion: Theory and Practice” in Advanced Colloid Interface Science, ed by L. M. Prince, Academic, New York. 4, (1975) 281. 8.Salager, J.L and Antón R. E.; “Ionic Microemulsions”, in Handbook of Microemulsion Science and Technology, ed by P. Kumar and K. L. Mittal, Marcel Dekker, Inc, New York (1999) 247. 9. Salager, J.L., “Phase Transformation and Emulsion Inversion on the Basis of Catastrophe Theory”, Encyclopedia of Emulsion Technology, Vol 3, ed by Paul Becher, Marcel Dekker, Inc, New York (1988) 79.

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Scientific Research

The Compatibility of Egyptian Bentonite During Drilling Shale Formations In this work, we examine the changes that take place in the rheology and properties of water-base mud using the Egyptian bentonite of south Hammam area which is produced by Egyptian Drilling Derivatives Company instead of the imported bentonite. We will study their change in behavior during drilling through shale rocks due to swelling and expansion of shale.


rilling fluid is a vital element of the drilling process which, any Prof. Dr./ Mahmoud Ibrahim drilling fluid must have common properties that facilitate safe and satisfactory completion of the well. The main component Director of Oil Field Center (EPRI). of water base mud is clay (mostly bentonite). The present consumption of bentonite clay in the drilling operations alone can After the circulation of shale reach over 100 thousands tons a year and all of it is imported. The large with drilling fluids we can consumption and the high importation cost of this material lead to an observe the sloughing of shale after contact with water present attempt to find a local substitute. in the water-base mud. The Water-base mud was prepared by using Egyptian bentonite and sloughing of shale of the four circulated with shale at the same conditions of well borhole using the samples (that ranges from 66% oven roller device. Rheological properties, and filtration characteristics after 8 hours to reach about 96% after 40 hours) tends to are determined to evaluate the local bentonite. The swelling-phenomenon in rocks results from the change in crystal raise the density from 10 to 11 dimensions or grain boundaries. This occurs when drilling through shale lb/gal through 40 hours. Also, formations. Such swelling _ as a result of this circulation_affects the the viscosity of the water-base rheological properties of mud fluids, like the density, viscosity, filtration mud changes as a result of increasing sloughing of shale. loss and filter cake thickness. Apparent viscosity increased Exprimental Work from 35.5 to 48 cp, while Circulation of shale with water base mud byusing roller oven device plastic viscosity increased from Al-Aboudi (1994) and Abdou, M.I. (1999) The following charts show the percent values of shale sloughing of 2 to 7 cp. Yield point increased four samples of shale after circulation with water based mud through from 63 to 92 lb/100ft², and gel strength increased from 40 to 40 hours. 80 lb/100ft². But the thixotropy showed variable change as a result of the presence Technical Pages 05 Technical Pages 06 of shale, increase of solid concentration and increase in the viscosity by weighting the filter cake thickness (which increased from 0.7 mm to 2.2 mm after 40 hours). Meanwhile, the fluid filter loss decreased from 16 mm/30min. to 13 mm/30min.


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The extreme world of oil industry

Scientific Research Resistivity of samples after saturation with saline water. Unshaley water-base mud andshaley water-base mud. Petrophysical parameters The main properties of rocks that are affected by water-base mud to evaluate the Egyptian bentonite are permeability, porosity and resistivity. They were measured in averages for nine plugs prepared through two cases saturated with unshaley waterbase mud and shaley waterbase mud. Average permeability, porosity, and average resistivity was measured for three samples. Saturation by unshaley waterbase I-Permeability: Average permeability ranged from 855 to 3,950 md after saturation with fresh water. But permeability decreased by average (30%) from 521 to 2,311 md after saturation with waterbase mud due to the invasion of bentonite clay particles of mud into pores. II- Porosity: Average porosity ranged from (24%) to (32%) after saturation with fresh water, and decreased with average (10%) to range between (19) and (28). III- Resistivity: Average resistivity ranged from 159 to 255 ohm after saturation with saline water and increased to be about 336 to 698 Ohm. 336 ohm to 698 Ohm,after the saturation by water-base mud. Saturation by shaley water-base mud In the following, there are three measurements of permeability, porosity and resistivity and

Porosity of samples after saturation with fresh water. Unshaley water-base mud andshaley water-base mud. Permeability of samples after saturation by fresh water. Unshaleywater-base mud and shaley waterbasemud. their averages for nine plugs of samples after saturation with shaley water-base mud, as follows: I-Permeability:-Average permeability decreased by average (55%) from 407 to 1989 md, due to invasion of shale particles and bentonite clay of mud into the pores. II- Porosity:- Average porosity decreased by (12%) to range between (20%) and (28%). III- Resistivity:- Average resistivity increased from 447 to 905 ohm. Summary and Conclusions As a result of the circulation of mud fluids with shale, it is concluded that, the shale when circulated with water-base system, it adsorbs the water occurred in the mud system then swelled. Shale sloughing with high ratio caused changes in the compositions of the mud fluids, which change the trend of variation in the rheological properties, filtration loss and filter cake thickness. We concluded that the effect of the Egyptian bentonite of the south hammam on the shale was nearly identical with the imported

bentonit. Also the results revealed from the previous works concerned with the testing on the imported bentonite exhibited that there is nearly identical on the petrophysical properties (permeability, porosity and resistivity) as in the presence of Egyptian bentonite of south Hammam. REFERENCES

- Aboudi, M.A., Ghofrani, R., and SENGUPTA, P., (1994): Damage caused by clay based and clay free inhibitive fluids in sandstone formations. Paper SPE 23815 Pro. Int., Symposium Formation Damage Control. Publ. by Soc. of Pet. Eng. of AIM, Rirchardson, TX, 8 p. - Abdou A. Abdou(1992):Geological and mineralogical studies of some barite and bentonite deposite in Egypt.PH.Theisis - Abdou, M.I. (1999): Study of pay zone formation damage caused by oil-well drilling fluids components, PH.D Faculty of science, Geology Department- Al-Azhar University, Cairo, Egypt. - Ali, S., Mcginn P. and Fitzaptrick, H.(1996): Fluid loss control materials increase production at Alba. World Oil Journal, V.217, No 5, 4 p. - American Petroleum Institute, (1997): Standard Procedure for Testing Drilling Fluids. API Code RP.13 B, 10 p. - Briscoe, B. J., Luckham, P. E., Ren, S., (1992): Rheological properties of barite loaded drilling fluids. Chem, Eng, Res, Des. V. 70 No. 1, 8 p. Bouse, E. E., (1987) :Butter mud viscosity data necessary. Oil and Gas-Journal. V. 85 No. 26, 4 p. Chenevert, Me. and Amanullah, M. (1997): Shale preservation and testing and testing techniques for borehole stability. Procceedings of the Drilling Conference, Univ., Texsas. 5 p. Chenevert, M. E. and Pernot, V. (1998): Control of shale swelling pressures using inhibitive water-base muds. Proceedings SPE Annual Technical Conference and Exhibition. V. Delta, Soc Pet Eng (SPE) Richardson, TX, USA, 10 P. Chilingarian and Varabutr,(1981): Drilling and Drilling Fluids, developments in petroleum science. 11, El - Sevier Sc. Pub. Co. Amesterdam

February 2013



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Petroleum Economics

Drilling Economics Because of the current attitude of the major international oil companies to minimize the final total cost of the well, methods have been proposed to evaluate the drilling cost, then trying to minimize it. The purpose of this article is to review the factors that impact drilling cost and how to reduce the total cost of the well.


rilling is a complex and multifaceted activity that is subject to significant sources of variability. Although the physics of drilling is the same throughout the world, geologic conditions, contractor experience, equipment availability, well specification, and numerous other factors can lead to a wide range in drilling performance. Performance comparisons are mostly done on a well-by-well, actualversus- plan basis, or seek to correlate costs to performance indicators, metrics, or drilling parameters. To evaluate the differences that exist in drilling wells and to compare costs, it is necessary to establish statistically reliable relationships between performance metrics and the factors that impact drilling. The formation geology at the site and the location of the target reservoir is a primary factor that influences drilling cost. The drilling methods used to make hole depend upon the geologic formation and the technology applied, the amount of information known about the formation, the experience and preferences of the operator, available equipment, and the drilling contractor’s experience and execution. Bit hydraulics has a major influence on drilling efficiency, and its role is complex since it is closely tied to other drilling variables, such as lithology, bit type, downhole conditions, mechanical drilling parameters, circulation system and drilling mud. Site characteristics such as the water depth, operators experience in the region, and expected environmental conditions influence the operator’s decision regarding the selection of the contract and rig type, which in turn influence drilling performance metrics. Exogenous events such as stuck pipe, adverse weather, and mechanical failure cannot be predicted and can have a significant impact on the time and cost to drill a well.

Well Construction Process

The well construction process typically consists of four stages: design, planning, execution, and analysis. The design and planning phases represent the first stage of well construction, and is usually initiated through the preparation of a drilling proposal by geologists and reservoir engineers. The proposal provides the information upon which the well will be designed and the drilling program prepared. Project team selection; well design; health, safety, and environmental quality; tendering contracting procurement; finance and administration; operations planning; and logistics are the main elements included in the proposal. The drilling engineer prepares the drilling prognosis, and all the information that is required to safely and efficiently drill the well, including the well loca-


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Mohsen A. Farhan Drilling superintendent

tion and water depth, the vertical depth and total measured depth, the depth of the expected reservoir sands, downhole reservoir pressures, expected hydrocarbons, the presence of toxic gases, evaluation requirements (mud logs, electric logs, drillstem tests, etc.), special drilling problems such as loop currents, shallow hazards, or shallow water flows, final disposition of the well, and future sidetracking.

Drilling Cost

Major part of expenses in development of oil and gas fields is related to the drilling phase of the project. Each well according to the geology of the region, top of the target formation, technical weighing and other non associated waiting may have a certain drilling duration. Sometimes, due to some drilling problems, drilling duration may be extended. Drilling cost can be broken down to two parts, fixed and variable costs. This formula describes drilling cost: ( Cost/ft ) = [ Cb + Cr (tb + tc + tr) ] / ΔD

Cb is bit cost ($), Cr is rig operation cost ($ / hr), tb is bit running time (hr), tc is connection


The extreme world of oil industry

Petroleum Economics time (hr), ΔD is the drilled interval (ft), and tr is drilling trip time (hr) and can be roughly estimated by: tr = 1 + (3 Din / 100) Where: Din is the length of drillstring in hole. Drilling cost is a critical factor in determining the financial returns from an oil and gas investment. Its critical nature is particularly true when operating costs are high and when drilling problems may be likely to occur. Drilling optimization is the key to reduce Non-Productive- Time (NPT) when drilling is ceased. In order to reduce the total cost, drilling rate should be increased which is attainable with paying attention to how interrelated operational parameters can affect each other in order to increase rate of penetration. According to the formula, three different acronyms illustrate role of time in the cost equation. Connection time depends on the drilling crew efficiency and tripping time also depends on depth and efficiency of the crew on the floor. Bit type controls bit running time and tripping time. Inappropriate type of bit will cause a decrease in penetration rate and also unripe tripping which forces drilling operator to pull the bit out of hole. This will waste the time and impose extra expenses to the operator company. The stuck pipe and lost circulation are the major problems which decrease the performance level and increase the drilling cost. These occurrences are common everywhere in the world and are estimated to cost the industry hundreds of millions of dollars annually. In some areas, events related to differentially stuck pipe can be responsible for as much

as 40% of the total well cost. This huge loss is always accounted in the well budget cost as a contingency factor for the risks associated with the stuck pipe problems in the well planning and drilling performance approach.

NPT Analysis

Non-productive time is defined as the time during which drilling is ceased or penetration rate is very low. The followings can be categorized as main features of NPT:z 1. Lost circulation (severe and complete losses) . 2. Pipe sticking (differential, me chanical and wellbore geom etry related sticking). 3. Dealing with kicks and some times subsequent complete loss due to narrow mud weight window. 4. Wellbore instability issues. 5. Formation breakdown ( gen eration of induced fractures) due to high ECD or pressure surges. 6. Slow ROP in hard formations. 7. Tripping for changing the bit. 8. Fishing operation. 9. Remedial cementing for icre ment of primary cementing.

Qualitative NPT impact can be classified as follows: 1.

Loss of or damage to equiment. 2. Financial loss (behind budget operation). 3. Health, safety and environmen tal (HSE) issues. 4. Waiting for equipment arrival and new technique set up.

Dodson in 2004 found that about 40% of non-productive drilling time was caused by both wellbore instability and pore pressure issues (e.g. kicks, gas flow, shallow water flow, lost circulation, wellbore instability, sloughing, and stuck pipe).

Reducing NPT Wellbore



in exploration and development drilling operation cost the drilling industry more than $100 million per month worldwide and possibly as much as one billion dollars annually. The most commonly encountered wellbore instability is borehole enlargement or collapse due to brittle rock failure of the wall. When the borehole wall starts to break out, small and large pieces of rock may settle down around the drill string and pack the annulus off, while larger particles may go around the bottomhole assembly (BHA) and jam the drill string which can cause string sticking and prevent its movement. When drill string can not be pulled out, freeing operation should be started and spending time for freeing may bring drilling program behind the schedule. Most often, pipes will be freed by working on them, but if the drillstring can not be freed, it should undergo back off operation. In this operation after determination of free point along the drill string, drill pipes will be unscrewed across the nearest tool joint above stuck point. Upper section will be pulled out of the hole and operation will be resumed by running fishing tools to retrieve the stuck part. Fishing operation may last few hours up to many weeks. For development wells, time break down structure will be as follows: • Moving 6% • Drilling 33% • Tripping 5% • Repair 4% • Fishing 3% • Other 13% • Waiting 10% • Formation evaluation 4% • Casing & cementing 12% • Hole conditioning 10%

Stuck pipe and lost of circulation can incredibly increase non-productive time. A methodology was proposed for prediction of lost cirFebruary 2013



The extreme world of oil industry

Drilling Economics culation and stuck pipe probability in any coordinates of field using operational data. Drilling rate at the technical limit This new approach suggests that the drilling rate is compared with a newly introduced parameter; called Drilling Rate Technical Limit (DRTL). It will be defined as the maximum achievable drilling rate without risking drilling safety. This method is superior to learning curve analysis because; (1) it does not depend on the previous drilling records, (2) it aims to drill at the fastest rate possible without jeopardizing the safety of drilling operation. It has a couple of disadvantages; (1) the proposed method can only compare the drilling rates, (2) it is laborious. This new method calls for the assessment of the operational values that will maximize the drilling rate, then reduce the well drilling cost. The rate of drilling can be improved for a given field until it reaches its technical limit, without jeopardizing drilling safety (DRTL). DRTL can only be achieved by carefully selecting all critical drilling parameters, which influences DR. These are Mud Weight (MW), WeightOn Bit (WOB), rotary speed or Rotation Per Minute (RPM), bit type and hydraulic parameters, such as; flow rate (Q) and impact force are among the controllable drilling variables. It has long been observed that the DR generally increases with increasing Q, WOB, RPM and fractional bit tooth height. On the other hand, it decreases with increasing drilling fluid viscosity and MW. Some of these variables may have significant effects on DR whereas others may have marginal effects. Appropriate selection of these


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variables can significantly improve the DR and reach Drilling Rate Technical Limit (DRTL). This can be approached if: •MW is selected as the biggest of following two values; a) minimum MW needed to prevent formation fluid kick. b) minimum MW needed to prevent borehole collapse. • WOB is selected as the smaller of following two values; a) optimum WOB for minimum cost per footage, and b) minimu critical buckling load of drill string portion that will be put in compression. • RPM is selected as the smallest of following thre values; a) maximum allow able RPM for rotational drag, b) maxi mum allow able RPM for bit hang up, c) optimum v for minimum cost per foot age. • Q is selected as the bigger of following two values; a) minimum flow rate needed to prevent cuttings bed formation in inclined holes and vertical holes, b) the flow rate need for an effective cleaning beneath the bit tooth. Real Conditions in Egypt The major reasons of uneconomic drilling operations are: 1. Planning efficiency (or no planning) for drilling operations. 2. Availability & accuracy of offse wells data. 3. Qualification & training of drilling staff. 4. Application of advanced drilling technology. 5. Philosophy of time value & Self motivation behaviour. 6. Management behaviour

(achievement & motivtion). 7. No clarity for achievement evaluation system (key performance Indicators). 8. Old & Bad Managerial procedures followed by slow decisioning. 9. Less expenditure for development of human per formance and job efficiency. 10. Drilling rate at the Technical limit Conclusion. A key to succeed in any drilling well job is to minimize costs along with safety, environmental issues and without drilling problems. Reduction of non productive time can strongly reduce drilling cost, especially while drilling development wells. The rate of drilling can be improved for a given field until it reaches its technical limit. This is the maximum achievable drilling rate (DR) without jeopardizing drilling safety. References.

1. Moazzeni Alireza; Nabaei Mohammad; Azari Ahmad / Advances in Petroleum Exploration and Development Vol.1 No.1, 2011 24. 2. “A survey of drilling cost and complexity estimation models Mark J. Kaiser “. International Journal of Petroleum Science and Technology. 30 Oct, 2011. 3. Ferda Akgun “Drilling rate at the technical limit”. International Journal of Petroleum Science and Technology. FindArticles. com. 30 Oct, 2011. 4. Moazzeni, A.R., Nabaei, M., Shahbazi, K. & Shadravan, A. (2010). Mechanical earth modeling improves drilling efficiency and reduces non-productive time (NPT): SPE 131718. 5. Paes, P., Aragao, A., & Chen D.C. (2005). Cost effective drilling optimization technologies in Campos Basin: SPE 94785. 6. Dodson, J. and T. Dodson, “Drilling efficiency numbers static,” Offshore, 55 (9), 26-28, January 2003. 7. Noerager, J. A., White, J.P., Floetia, A., “Drilling time predictions for statistical analysis,” SPE/ IADC 16164, 1987 SPE/IADC Drilling Conference, New Orleans, March 1987. 8. Garnier, A.J. and Van Lingen, N.H., Phenomena Affecting Drilling Rates at Depth, pp.232239; Trans. AIME 216, 1959. of Microemulsion Systems to Increase Productivity”, SPE 144209. Technical Pages 05


The extreme world of oil industry


Ahmed Selim

It has always been a target for me to study abroad so last year I applied for scholarships .. I went to England and I did Energy Engineering and Engineering Management courses at City University London for one year. It truly was life changing as I lived in a big city by myself, traveled all over Uk and met new people from different cultures. The university life was very organized, engaging and offers a better insight into global industries giving further skills that help self-development. I have now returned to Egypt and hope I can implement the ideas that I learnt from this experience.

AHMED El-gohary I applied for an exchange program to study in the US called (NESA UGRAD) . It was really a very good experience for me. I got to know different people from all over the world and different cultures. I also had the chance to attend SPE ATCE international conference in Denver to work as a research assistant in chemical EOR lab at the university of Wyoming and to visit some field locations in the US. Next year, I shall transfer this experience to my home country Egypt.

Muhammad Shafik I participated with my project “Oil Shale Technology and Efficient Utilization of Oil Shale Resources in Egypt� under supervision of Eng. Tawfik Elshehaby in SPE Student Paper Contest and I got the first rank in SPE Sub-Regional(North Africa Region) Paper contest, 2011 and second place in the Regional Contest (North Africa-Middle East-India) in Abu Dhabi, UAE, 2012 and I was nominated to represent my region with this project in the International Student Paper Contest which was held in conjunction with ATCE in San Antonio, Texas, USA, 2012. In this project we study the strategic significance of oil shale development in Egypt (economic profit-employment benefits- socio economic impact) and the critical issues which may threaten establishing this project and we put alternative solutions to face these challenges in the future.

February 2013



The The extreme extreme world world of of oil oil industry industry

Local News Minister of Petroleum discussed business plans with the heads of foreign companies over the coming period.

Eng. Osama Kamal, Minister of Petroleum and Mineral Resources held a meeting with several heads of foreign companies operating in Egypt, British Petroleum (BP) and the German RWE, Malaysia’s Petronas and British Gas and Gaz de France.During the meeting, The Minister of Petroleum highlighted the companies work programs in the coming period. whereas BP will drill a new well with its partners Shell and Petronas in the Mediterranean Sea at a drilling cost of $ 400 million. Also, BG will drill a deep well in the Mediterranean Sea at a cost of drilling $ 200 million; continue in the of the West Delta Deep concession in the Mediterranean Sea to increase natural Egypt’s Oil & Gas Reserves to Reach 20B b/y Egypt’s oil and gas reserves are now put at the equivalence of 18.6 billion barrels of crude oil and are projected to reach 20 billion equivalent barrels in a year time. That was reported in the media quoting Eng. Osama Abdallah Kamal Ghorab, Minister of Petroleum and Mineral Wealth, indicating that production now is going at a rate of 1.9 billion equivalent barrels of oil. Meanwhile the Minister revealed that plans are on hand to increase the number of vehicles and buses operated by natural gas to reach 205,000 served by 172 fuelling and conversion stations by the end of FY 2012/ 2013. $1 Billion British Investments in Oil and Gas Domains. GUPCO’s Chairman, Eng. Abdul Qadir Abdellah, pointed out that the budget for the new year is the largest, ever, in the history of the company’s investments which exceeds $ 900 million, and targets maximizing production rates, reserves as well as maintaining the infrastructure, increasing

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gas production rates. The Minister future in addition to credibility and pointed out that the companies’ commitment that relate the petroleum continuous commitment to implement sector with its foreign partners. their programs is a message of reassurance of Egyptian petroleum developmental and exploratory rigs to reach 5 rigs, maintenance of 27 wells, thus contributing to keep production rates at a level of 80 thousand barrels of oil per day. The company’s budget includes about $ 63 million allocated for wells development and exploration in Sinai region to put 3 new wells on stream during 2012. For his part, Eng. Ahmed Hosni, Chairman of Pharaonic Petroleum Company , clarified that the new year plan includes investments of $322 million approximately , from British Petroleum Co. and the Italian IEOC for drilling 6 wells at Ras El-Bar concession area at the Mediterranean Sea, at Haapi, Tort and Seth fields. This will be reflected in the natural gas production increase of the company to reach 720 million cubic feet per day, in addition to the implementation of expansion projects at the offshore production terminal at Port Said, carried out by Enppi and Petrojet with investments up to $258 million to increase its capacity.

Bakly: high production Khalda Petroleum Company for 53 million barrels of oil. Eng Osama Bakly Chairman Khalda Petroleum Company, high volume production of crude oil and condensates of up to 53 million barrels and 348 billion cubic feet of gas, as a record added reserves of oil and condensates 53 million barrels, and gas 288 billion cubic feet. We work on increasing the size of the company’s investments to reach $ 835 million, pointing out that the company’s plan aimed at increasing the volume of production of oil and gas, where the company has recently concluded 3 contracts run 3 devices new drilling join the fleet drilling operating company, bringing the number of rigs and maintenance to 28 devices, contributing to increased drilling up to 141 wells including 40 exploratory wells to add new reserves.


The extreme extreme world world of of oil oil industry industry The

International News Nigerian Crude Oil Production Hits 2.7 Million Barrels... As NNPC, Benue Pledge to Resuscitate Makurdi Depot

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Engr. Andrew Yakubu has revealed that a significant milestone was yesterday recorded in the oil and gas sector as Nigerian crude oil production has increased from 2.4

Million barrels per day to 2.7 mbpd. Engr. Yakubu disclosed this on Thursday when the Governor of Benue State, Dr. Gabriel Suswam led a high powered delegation on a working visit to the NNPC Towers, Abuja. The GMD stated that the security measures put in place

by the Federal Government in the Niger Delta region was beginning to yield positive results as shown in the increased crude oil production in the country.

US warship collides with oil tanker near Gulf.

Shell Leads LNG Competitors Out to Sea With Biggest Ship

BP Still Keen on Russia Despite Troubled Venture

A US guided-missile destroyer collided on Sunday with a Japanese-owned bulk oil tanker near the entrance to the Gulf, but no one was hurt, and the ship is able to operate, the US Fifth Fleet said. “No one was hurt Sunday morning when a US Navy guided-missile destroyer and a large Japanese-owned merchant vessel collided near the Strait of Hormuz,” the Bahrain-based fleet said in a statement on its website.

Shell will forge the hull of a floating LNG plant in South Korea by year-end that will be the world’s largest vessel, weighing six times the biggest aircraft carrier, a Nimitz-class warship. Some 5,000 workers will build the factory to produce LNG off Australia’s northwest coast in a $13 billion project that also will shield Shell from escalating costs it would have to pay at the country’s onshore plants. That also will shield Shell from escalating costs it would have to pay at the country’s onshore plants.

LONDON—BP PLC said Friday it aims to stay in Russia for decades to come and could use some of the proceeds from the potential sale of its stake in joint venture TNK-BP to increase its holding in Russian oil giant OAO Rosneft. BP said it wanted to continue its investments in Russia regardless of whether it sells its 50% stake in TNK-BP to Rosneft or to the group of Soviet-born billionaires who own the other half of the joint venture. The comments illustrate the U.K.based energy company’s desire to retain a significant presence in oil-rich Russia. February May / June2013 2012

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tweets Champions do not become champions when they win the event, but with the hours, weeks, months and years they spend preparing for it.

I can’t believe that the purpose of life is to be "happy." I think the purpose of life is to be useful.

Discipline yourself to look neither forward nor backward and you can accomplish things you never thought you could possibly do.

Vision without action is merely a dream, Action without vision just passes time, vision with action can change the world.

No one is in control of your happiness but you, so you have the power to change anything about yourself or your life that you want to change.

Success is a result of luck? No, success is a result of how you spend your free time.

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