Statoil transfers proven Norwegian techniques to draw out Peregrino's heavy crude

The start-up of the Peregrino heavy oil field in Brazil's Campos basin in April marked a major milestone in Statoil's international ambitions. Peregrino is the company's largest operated field outside Norway and the first it has brought onstream in Brazil. Development of Peregrino, which contains 14º API crude, also benefited from Statoil's heavy oil expertise.

Jul 1st, 2011
Pennwell web 400 267

Nick Terdre
Contributing Editor

The start-up of the Peregrino heavy oil field in Brazil's Campos basin in April marked a major milestone in Statoil's international ambitions. Peregrino is the company's largest operated field outside Norway and the first it has brought onstream in Brazil. Development of Peregrino, which contains 14º API crude, also benefited from Statoil's heavy oil expertise.

"This is a very significant step in the further development of the Statoil group," says Thore E Kristiansen, senior vice president and head of the South America and Sub-Saharan Africa region. "Peregrino is the biggest international field that Statoil operates today. The project has been a very purposeful part of developing the company outside Norway."

Thore E Kristiansen, Statoil's senior VP and head of the South America and Sub-Saharan Africa region. (Photo: Statoil)

The field, discovered by Petrobras in 1994, subsequently was licensed to a series of international oil companies which appraised the find in the early years of the new century. In 2005, Norsk Hydro acquired EnCana's 50% stake. At the time, Peregrino was operated by Kerr McGee, which in 2006 was taken over by Anadarko. In 2008, Statoil, following its merger with Hydro's oil and gas division the previous year, bought Anadarko's stake and became the sole licensee and operator.

Even before then the company had an active role in preparing the development plan, which was sanctioned by the Brazilian authorities in 2007. One of the strengths brought to the merger by Hydro was its experience in developing the heavy oil Grane field in the Norwegian sector of the North Sea, which came onstream in 2003.

"We saw that by applying our technological skills, particularly with respect to drilling horizontal wells, and our competence in increased oil recovery (IOR) techniques, we could double recovery on Peregrino compared with what the then owners were planning," says Kristiansen. "The key thing we did was to add more water-handling capacity and lengthen the horizontal wells to give more reservoir contact."

As a result, the expected recovery rate has been raised to 20%. Statoil is confident that the in-place volumes amount to 2.3 Bbbl, according to Kristiansen. It is less sure about the recoverable reserves, which are estimated at 300-600 MMbbl. It is not uncommon to have a large range for recoverables at this stage, he says. There are several factors which underlie this uncertainty.

The main reservoir being developed in this first phase covers an area of 535 sq km (206 sq mi). Moreover, the thickness and distribution of the sand bodies is uncertain, and on top of that some parts of the reservoir are below seismic resolution, so that reliable data will become available only when these parts are drilled. Prior to start-up, production experience was limited to a single 10-hour production test, so there is still a lot to be learnt about the field's production behavior, Kristiansen says.

Production facilities

Peregrino came onstream through just one well, but production now is ramping up and on course to reach the 100,000 b/d peak within 12 months.

Peregrino has been developed with two drilling/wellhead platforms delivering production to an FPSO. (Source: Statoil)

The field is in about 120 m (393 ft) of water in the Campos basin, 85 km (53 mi) from the coast of Rio de Janeiro state. It has been developed with two wellhead/drilling platforms about 10 km (6.2 mi) apart, which send production to an FPSO stationed in-between. In 2007, a front-end engineering design (FEED) study for the development was awarded jointly to South Atlantic Holding and Mærsk Oil.

This was followed shortly by the signing of a contract with Mærsk Contractors, now Mærsk FPSOs, for the provision and operation of an FPSO for a firm 15-year period. The contract includes options for up to another 15 years. The FPSO,Mærsk Peregrino, was converted from a newbuild VLCC tanker, Mærsk Nova, at the Keppel FELS yard in Singapore. It has 1.6 MMbbl storage capacity, production capacity of 100,000 b/d of oil and 7.3 MMcf/d of gas, and liquids handling capacity of 350,000 b/d. The 12,500-metric ton (13,779-ton) topsides consist of 15 modules and there are accommodations for 100 personnel.

Work at the Keppel yard included fitting a submerged turret production and mooring system provided by APL, at the time a subsidiary of BW Offshore. The topside process modules were supplied by J Ray McDermott.

The FPSO arrived on the field Dec. 31 last year. It is held in place by 10 chain and wire mooring lines attached to 90-metric ton (99-ton) piles. The mooring operation was performed by Aker Marine Contractors.

The two wellhead platforms were fabricated by Kiewit in Corpus Christi, Texas. Each has a topside of about 8,200 metric tons (9,039 tons) dry weight supported by a 100-m (328-ft) tall jacket weighing 6,700 metric tons (7,385 tons). The platforms were installed in March 2010 by Heerema Marine Contractors' crane-bargeHermod. Operations, maintenance and modification services are provided by Wood Group.

Each wellhead platform connects to the FPSO via two oil production pipelines and an injection water pipeline, while two power and signal cables also run from the FPSO to each platform. Pipelay and cable lay was performed by Subsea 7.

Reservoir challenge

A total of 37 wells are planned, 30 horizontal producers and seven water injectors. The drilling program is being executed by drilling contractor Archer.

"The reservoir is rather unconsolidated and the reservoir sections are quite thin – drilling is a challenge," Kristiansen says. "However, so far it's going well for us."

In May the drilling program was close to delivering the longest open-hole gravel-packed horizontal sections ever drilled in Brazil – 1,300 m (4,265 ft) – and the plan is to incorporate even longer sections, expanding the use of this technology.

Each producer is fitted with an electric submersible pump to boost the wellstream flow to the surface. To aid processing on the FPSO, the crude is heated from an arrival temperature of 60-66º C (140-151º F) to 130-150º C (266-302º F), and the stabilized oil is stored at 65-70º C (149-158º F).

Local content of 35% was achieved in the development, which satisfied the license requirements, according to Kristiansen. However, demands for more local content lie ahead for future projects – the requirement in the latest Brazilian licenses to be awarded is 65%, he says.

Statoil also achieved a satisfactory safety performance.

"We put a lot of emphasis on HSE and a strong safety culture, and trained 1,100 or more offshore workers in the Statoil way of safety," he says. "Overall we are very happy with our HSE performance – we ended up with a serious injury frequency of 0.6 per million work-hours, and no fatalities, in a project which took 24 million work-hours."

The environmental strategy calls for emissions to both sea and air to be limited as far as possible. Produced water is reinjected into the reservoir, along with treated seawater, to help maintain reservoir pressure. Gas is used as fuel on the FPSO and there is no permanent flaring.

Production and drilling are managed by a process of integrated operations, including a real-time link with Norway. Collaboration rooms are in use around the clock and vital production and well data are monitored in real time.

IOR strategy

Once full production is achieved, Statoil plans to implement a series of IOR measures. The first of these is multilateral wells, which it uses extensively on the Norwegian continental shelf (NCS) and in which technology it can lay claim to being the world leader. These will be the first multilateral wells in Brazil.

Peregrino B platform, with the Mærsk-operated Peregrino FPSO in the background. (Photo: Øyvind Hagen/Statoil)

The second IOR measure will be polymer flooding to improve the effect of water sweep. This is a proven technique for onshore fields, and in 2010 Statoil ran a successful pilot on the Heidrun field in Norway. Polymer flooding also is being piloted on Total's Dalia field off Angola, where Statoil is a partner.

Finally, there is the autonomous inflow control device – AICD – of which Statoil has developed and patented its own version. The AICD, installed as part of the well completion, is in effect a "smart" device that can distinguish between high-viscosity heavy oil and low-viscosity water and gas, opening for the former and closing down to the latter. The system, undergoing pilot testing on the NCS, could prove valuable tool not only in Peregrino but also in other heavy oil fields which Statoil develops in future.

The IOR program will be implemented in stages, starting next year with multilateral drilling. The company hopes that these measures will help it towards its internal stretch target of up to 30% recovery on Peregrino.

Statoil is no longer the sole Peregrino licensee. Just days after start-up, it completed a deal involving the sale of a 40% stake in the field to the Chinese state company Sinochem for a cash payment of $3.1 billion. The transaction confirmed the high quality of the Peregrino asset and reflected the added value Statoil had brought to the development.

"This was a very important step to prove to the world our ability to take on a technological challenge and develop shareholder value," says Kristiansen.

Additional potential

As well as optimizing recovery from the main field, Statoil has begun to prove up further resources in the area. In April it announced a discovery at Peregrino South where a gross 130-m (426-ft) oil column was proven in the Carapebus formation. The semisubmersibleBlackford Dolphin rig immediately started drilling an appraisal well.

When this is finished, it is scheduled to drill an appraisal well on Peregrino South-West, which was discovered in 2007. If these wells come in as planned, Kristiansen says, there should be enough in place for a second phase of development.

There is also further potential in the main field. Below the main reservoir in the Carapebus lies the carbonate Macae formation in which a significant quantity of crude has been identified. During the next two years, a long-term production test will be carried out in the Macae to establish whether it should be brought into permanent production.

Wider ambitions

Aside from Peregrino, Statoil holds eight exploration licenses off Brazil, three of which it operates, and on one of which it plans to drill an exploration well later this year. The company would like more acreage, Kristiansen adds, and looks to participate in the next licensing round expected to get under way this fall.

Though Brazil and Norway are in many ways very different, Statoil has various affinities with its counterpart Petrobras – both are national oil companies which pursue their exploration and production activities in a pioneering spirit.

"We're both very focused on technology development and when it comes to subsea production systems we are first and second in the world. We have a technical cooperation agreement which goes back quite a few years and which is working very well," Kristiansen says.

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