Making the commercial case for new downhole technologies

Nov. 25, 2019
The world outside is wireless. Your phone is wireless, car keys have almost ceased to be, and “fly by wire” is old hat. Why is the oilfield often reluctant to look beyond the horizon at new technologies that other industries have adopted for years?

The world outside is wireless. Your phone is wireless, car keys have almost ceased to be, and “fly by wire” is old hat. Why is the oilfield often reluctant to look beyond the horizon at new technologies that other industries have adopted for years?

There is much talk of digitizing the oil field, production 2.0 and Big Data. These efforts tend to focus on data that has already been collected. The development of downhole electromechanical tools has progressed apace over the last five to 10 years; they have been adopted in formation evaluation and drilling applications for years, yet they have been slow to gain traction in well completions and construction applications. In some cases this is understandable, as most industries, and especially safety critical ones, are reluctant to make changes, instead preferring time proven solutions.

The oil industry is no different. However, if “necessity is the mother of invention,” then the sustained lower-oil-price environment is the necessity that the industry needs to drive it toward innovative technologies. Rather than focusing on pushing down the cost of a given product or system, it has pushed operators to look at the overall cost of delivering the well.

In the past, the industry placed self-imposed barriers to adopting these technologies. These barriers included concerns over reliability, battery life, cost and contingency options.

All new technologies have a learning curve, and completion-based interventionless tools have had a learning curve steeper than many. This is partially because the tools are never normally planned to come back to surface. Therefore, it is very difficult — if not impossible — to diagnose any failures in a tool that is 3 to 4 mi (5 to 6 km) underground. The main learning points have been from deployment in test wells or from tools recovered to surface following an operation. Now, as the technology has begun to mature, reliability in recent years has increased to a near-perfect deployment rate.

Battery life is of course another key consideration. Currently, most interventionless tools have found their home as commissioning tools: that is to say, they are used in the initial installation and setup of a well. In this application most tools can be setup to change their mode of operation to optimize the use of their available battery power. This gives a useful battery life of typically six to 18 months in hole. But depending on the application, it could be further extended.

Contingency options have also occupied the discussion over whether these types of tools are suitable for downhole deployment. Given that once their batteries are exhausted most interventionless tools default to becoming traditional mechanical tools, this is probably the wrong question to be asking. The question should be: What additional functionality could they bring to my well before they become mechanical tools?

Cost to deploy these tools has to make commercial sense. These tools cost more than traditional mechanical tools. However, their commercial viability can be quantified in two ways: direct – the amount of opex the tool saves; and indirect – beneficial operations that can only be performed with the new tool.

Downhole electromechanical tools bring two primary benefits to completion and well construction applications. Firstly, they can address existing issues; remotely functioned tools are currently being used successfully in the Middle East, where previous mechanical solutions were deemed too risky to isolate extended-reach drilling liner applications of 20,000 to 30,000 ft (6,096 to 9,144 m) or more. RFID-activated ball valves are being deployed globally in offshore wells to address well-known reliability issues around opening barrier valves.

The other primary benefit is that they can offer entirely new functionality that enables operations to be optimized to a specific scenario. In the case of well testing, multi-cycle tools can test discrete reservoir sections with no intervention. Electronic delays can trigger the sequenced opening of individual zones, to enable the optimal staged clean up methodology of liner sections and multi-laterals.

Fundamentally these types of tools can be used to change completion methodology entirely. SNEPCO (Shell Nigeria) has adopted an RFID-based technical solution to deploy single trip completions in its deepwater Bonga field. It was found that by adopting the RFID-enabled single trip concept, rig time savings of up to 60% could be realized. In an offshore environment where spread costs are larger, this effect is typically magnified, and the return on investment has typically been shown to be in the order of 500 to 600%.

While the industry has been slow to adopt electromechanical tools in downhole applications, now that their reliability and commercial case has been proven, they are gaining traction at an exponential rate. In the last couple of years, they are being adopted by major operators in multiple deepwater fields across the globe. They have both conquered previously unsolvable technical problems and turned marginal projects into commercial certainties. The question has now become: Can you afford not to use them?

Euan Martin Murdoch, RFID Completions Product Line Manager, Weatherford