ERHC Energy Inc (ERHE)

[kobiashi2000]

January 30th, 2006
Addax uses fit-for-purpose technology to develop Okwori
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Addax petroleum used a phase development plan and specifically selected technology to develop the challenging Okwori firld offshore Nigeria. Okwori, located in the Southern part of OPL-90,90 Km south of Portharcourt, presented significant technological issues.
Ted Moon

Although the field exhibits favourable oil properties, subsurface difficulties arise from the formation being made up of loosely held, very permeable sands and the fact that the reservoir is composed of numerous stacked oil pools and compertments. The oil columns vary from 5-350ft.

The stacked nature of the oil-bearing sands and high degree of compartmentalisation required production from different fault-dip closures to be commingled to make the development commercially valuable.

Addax acquired the Okwori oil field assets from Ashland in 1998, after several previous operators passed on developing the field and commissioned its own 3D seismic study. To develop the estimated 40MMbbl of reserves, Addax investigated several scenarios, eventually settling on a phased scheme that maximizes recoverable reserves and eliminates flaring of associated gas.

Their plan involved the sequential drilling of eight deviated wells using subsea wellheads, flexible flowlines, all hydraulic umbilicals, and dynamic risers connectedto the Sendje Berge FPSO, a converted and spread-moored vessel. The FPSO, has oil storage capacity of 1.4MMbbl and can process up to 60,000 b/d of liquids for an oil output of 38,000 b/d and gas compressing capacity of 55 MMcf/d. the FPSO was delivered to the field in late January, with a lease length for an initial four-years period. Capital costs are estimated at $230 million.

Management of produced gas was integrated in the project design at the outset,with studies indicating gas reinjection was not adviseable due to the potetial of rupturing fault seals at depth with subsequent gas migration along major plane towards the seabed.other gas disposal possibilities include shipping the gas through an export subsea pipeline to a third-party treatment facility or grnerating electricity on-board the FPSO and transmitting current on-shorew for domestic consumption via subsea electric cable.

In terms of drilling economics, badge drilling was selected with each pair of producing wells surface located within the range of the drilling rig chains to minimize the number of rig moves.

Well sequencing was designed such that the rig was drilling the Northern most wells at the same time that reel lay and DSV vessels were laying flexible flowlines andumbilicals between the subsea wellheads and FPSO.

NEW TECHNOLGY

Addax implemented several technology improvement and tin dynamics to develop Okwori. The company placed great emphasis on aggressive and active project management, made up of both Nigerian National and international professionals with expertise in each phase of the project, from drilling and completion to reservoir engineering to geophysics and subsea systems. In addition, the international staff provided invaluable on the job training and knowledge transfer to the local professional which is part of the Addax’s comittment to strengthen its local infastructure. Overseeing the team was the Okwori project manager who ensured that project goal and sub surface constraints remained aligned.

Addax implemented technological solutions to address challenges with sand control and production slacked reservoir pool. To avoid the need for gravel packing techniques for sound control in the loosely aggregated reservoir, Addax implemented expandable sand screens that were inserted into the downhole assembly.

To produce several levels of the stacked oil pools in series,Addax eployed selective hydraulically remote operated sliding sleeves (ROSS) as the appropriate reservoir control tool. Up to four ROSS’s have been successfully installed and operated in a single wellbore. This is one of the first subsea developments using this latest selective technology.

To successfully allocate production per reservoir when commingling, Okwori crudes were blue printed using geochemical finger printing techniques. The crudes were also subjected to blind test via private independent laboratories which specialize in geochemical finger printing.

The decision to use fit for purpose technology and keep the field layout simple has resulted in both cost and time saving.for example the decision to proceed with subsea wells and flowlines versus surface wall heads came after detailed economic modeling.with the cost of steel rising subsea development was determined to be more attractive than a platform in terms of a upfront capex costs(subsea design may result in a factor of 10-20 lower cost structureversus building a platform).

In addition, subsea development allowed the operator to maintain opex costs at the established value of $4/bbl. As other satellites are appraised and tied back to the FPSO, opex is expected to stay in the $4/bbl range.

In terms of time savings, the aggressive and multifaceted project team and the implementation of technology such as ROSS and expandable sand screens made it possible for Addax to produce first oil 15 months after the investment decision was made, amd only eight months after spudding the first development well.

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