ARC Advisory Group
For decades, upstream operating companies have employed some sort of artificial lift technology to increase production of mature wells, both onshore and offshore. These solutions are also being employed in newer unconventional wells to help offset the steep decline rates, and maximize the production over the life of an individual well.
Solutions designed to optimize the artificial lift systems are in great demand as owner-operators, independent E&P companies, and other industry stakeholders try and squeeze out more profits per barrel of oil equivalent produced in the face of today's declining prices.
It is well known that the era of easy oil has past, with unconventionals, such as shale oil and gas, ultra-deepwater and subsea, among other energy sources, rapidly becoming the new normal. In this environment, owner-operators and independent E&P companies realize the value of investing in automation and other technology solutions to enhance production, improve and/or enhance recovery, and help ensure more efficient operations with less experienced personnel.
Artificial lift solutions are designed to overcome bottomhole pressure to enable a well to produce at the desired rate. This typically involves either injecting gas into the producing fluid column to reduce its hydrostatic pressure or using a downhole pump to provide additional lift pressure downhole.
The majority of oil and gas wells become unstable at some stage during their production lifetimes, mainly during the tail end of production, limiting average production rates and oil and gas recovery. This instability can occur for a variety of reasons. These include gas or cone water breakthrough; the accumulation of water, oil or condensates in the pipeline (slugging); or increased pressures in the well. Artificial lift is a key instrument in bolstering recovery from older fields. With artificial gas lift, gas is injected into the production tubing to reduce the impact of the hydrostatic pressure in wells in which the reservoir pressure is no longer sufficient to force the hydrocarbons to the surface. By reducing the oil viscosity and thus allowing reservoir liquids to enter the well bore at higher flow rates, fields around the world can enjoy improved reservoir performance.
Artificial lift selection requires detailed analysis
The majority of oil and gas wells operated throughout the world requires some form of artificial lift during their life cycle. Selecting the right lift technology requires detailed analysis, including gas, oil and water property predictions; pressure loss from inflow to wellhead; variation in gas and oil ratio; and water cut over a time period.
Once implemented, monitoring and optimizing the artificial lift system is equally important, because improper operation of the lift system generally leads to higher operating costs, ultimately requiring additional capital investment. Monitoring is generally performed using downhole and surface sensors, since these provide basic information about lift performance. However, this information is not always sufficient to determine if the well is running at the highest possible efficiency. Such calculations require a sophisticated mathematical model to capture physical and chemical processes that take place during the lifting process.
Depending on the production level of an individual well (or field) the financial benefit of increasing performance by even 3% or 4% can translate into millions of dollars per year, or even per day for very large wells. Therefore, investments in artificial lift optimization solutions must be viewed in terms of meaningful ROI metrics in which owner-operators, independent E&P companies, and oilfield service suppliers can measure and manage. Industry sources indicate that the vast majority of wells, over 90%, are producing at rates sufficient to financially justify an investment in an artificial lift system. Due to this, the majority should be leveraging an artificial lift optimization solution.
Suppliers of artificial lift optimization solutions employ a variety of different means (software and services) to optimize the performance of the respective lift systems. These include understanding well dynamics, physical pump operating conditions (temperature, oil viscosity, vibration, etc.), and performance of key components such as variable speed drives, motors, etc.
Although artificial lift systems are typically applied for mature wells, an increasing number of unconventional shale oil and shale gas wells are believed to be incorporating artificial lift at the outset of well production due to the steeper rates of decline than conventional wells. In addition, new study findings indicate that field production can be enhanced by employing different artificial lift optimization solutions during different phases of a well's production life. New research indicates that users find that deployment of a jet pump or an electric submersible pump (ESP) system during the early and transitional phases of the well's life, respectively, can be used in conjunction with rod pump systems deployed later in the well's life to realize the largest estimated ultimate recovery (EUR).
New approaches to artificial lift optimization
An increasing number of end users will be deploying artificial lift optimization solutions that leverage the connectivity, real-time monitoring, Big Data information management, and advanced analytics capabilities of the Industrial Internet of Things (IIoT), which lends itself to the geographically distributed and infrastructure-constrained nature of upstream production assets onshore, offshore, and subsea. IIoT-enabled solutions can extend the reach of a respective artificial lift system operation that may be covering disparate and distributed projects, such as found on multi-well pad sites. In these applications, one or more operating companies can benefit by sharing operational data across the field or larger reservoir.
The initial well planning process should consider the deployment of artificial lift systems, recognizing that at some point in the well's life cycle, it's likely that artificial lift optimization will also have to be deployed. Lift requirements should be based on the overall reservoir exploitation strategy and will have a strong impact on the well design. While numerous factors influence the selection of an appropriate artificial lift method, it's clear that the deployment of artificial lift optimization solutions is critical to ensuring owner-operators, independent E&P players and drilling contractors can maximize their production, improve recovery rates in new wells, enhance oil recovery in more mature wells and open up the production envelope in a broader array of well types and application locations including subsea, offshore and onshore.
Given the large installed base of artificial lift optimization systems in wells across the world, it is safe to say that these systems provide meaningful ROI. As oil and gas become more challenging and costly to bring to market, and the current trend is toward dropping prices, owner-operators and other stakeholders cannot afford not to invest in these types of solutions.