ENM202 - Facilities Engineering Coursework

Coursework submission deadline is

Sunday 21st December 2014: 13:00hrs (UK time)

This coursework is designed as a self-study programme to further the students

knowledge of the subject beyond the directly presented course material through web and
publication searches and development of company contacts.
In the coursework you should provide a demonstration of:1. Knowledge and understanding of aspects of field development planning and
equipment application.
2. Critical analysis of selected options
3. Fundamental research (with references)

1. Project Brief
The GAZELLE oil field offshore RAS AL ZUBAIR has been producing for a number of years with
all production exported via oil pipeline system to Fort Thompson. Development of the field has
included injection of produced water into a deep horizon within the field where inadequate
pressure support from the aquifer was observed. All effluent water discharges to the sea were
halted and subsequent injection and disposal of the produced water required drilling of waste
water injection and disposal wells from a second bridge linked well-head jacket. Due to the
decline in oil production and hence associated gas there is a real possibility that field life may be
constrained by lack of adequate fuel gas for the water disposal/injection and oil export pumping
systems.
NRGU E&P acquired the offshore producing oilfield, GAZELLE, in 2008 and carried out an
assessment of near field potential and reprocessing of existing seismic data leading to
exploration of a deep gas prospect which the previous operator had considered to be too high
risk. The results of this exploration well have confirmed a gas condensate reservoir with the
predicted production forecast given in the appendices. NRGU E&P have authorised drilling of ten
development wells to support the supplied production forecast.
You are a consultant field development engineer and have been directed to assess the
development options and to make a detailed report with recommendations to the NRGU
E&P board.

2. Scope of Report
Identify two different development concepts for the GAZELLE field to process the gas and
condensate to export quality and define an export method (oil stabilisation and export is already
handled by the existing Gazelle platform and is outwith the scope of your report).
i.
ii.

Gas will be sold and distributed to the nearby fields (custody transfer at GAZELLE) to
provide fuel gas and also exported to Fort Thompson to provide fuel for the local market.
The high value condensate will be exported to Fort Thompson to use as feedstock for
the new locally owned chemical plant.

iii.

All waste products from the hydrocarbon processing shall be disposed locally using the
existing GAZELLE facilities to meet all requirements of the strict national environmental
laws.

Both options should detail the incremental development from wellhead to gas and condensate
delivery points. The subsurface plan is fixed and your report should comprise the following
sections:-

a) Prepare flow schemes showing the layout and of the main components used from wellhead
to the point of export for BOTH the options being considered. (20%)
b) Critically assess the advantages and disadvantages of each of your development options
including descriptions of the main items of equipment used. Based upon your analysis select
a recommended field development plan. This should cover technical viability, cost and
commerciality aspects. Cost comparisons should be completed using the supplied XLS
spreadsheet and for each option you should include a copy of the working spreadsheet in
your report. (30%)
c) Discuss your selected method for fiscalisation for the produced gas and condensate streams.
(15%)
d) Highlight flow assurance issues that may specifically be encountered by your preferred
development plan and propose your selected solutions to these indicating the likely impact
upon production operations. (20%)
e) Outline the key considerations required for the decommissioning plan for the incremental
aspects of your development options. (15%)

3. Report
The report should be not more than 3000 words with flow diagrams and other relevant drawings
to illustrate any points being raised.
All references used must be fully identified.

4. Gazelle Field Information

Location
The GAZELLE field (figure 1), offshore RAS AL ZUBAIR, is located 45km from the nearest
landfall to the North West a remote desert region with limited infrastructure. Water depth is
100m. The nearest significant town, Fort Thompson, 200km South West of the field, has a deep
water port with tanker berthing capability, a refinery and export facilities. A number of nonoperated fields are producing in the same area but all are deemed to be mature assets and suffer
from declining production and fuel gas shortages.
An oil production profile for the existing GAZELLE oil field is given for information only.

Gazelle facility

Fort
Thompson
Figure 1. Field Location

Other Development Activity

The oil refining facility in the Fort Thompson currently processes crude oil and NGLs from a
number of both onshore and offshore fields in addition to the GAZELLE production. There is a
strong local market for natural gas for both domestic consumption and for power generation.
Other operators have production licences in the region and are located some 10 -20 km east of
the GAZELLE field. In all cases these mature fields are suffering from shortage of fuel gas.

GAZELLE - EMGEE - J4 Petroleum Engineering

GAZELLE - EMGEE J3 was discovered with the initial exploration well in 2009 and further
appraised with the J4 well; data analysis indicates the fields characteristics are as follows:
VALUE

UNIT

Flowing well head

pressure
Reservoir depth (datum)
Reservoir pressure
Condensate gravity

650

psi

15024
8270
48.3

ft.bmsl
ft
API degrees

Condensate production
Gas specific gravity

130
0.65

bbl/mmscf

Subsurface Development Plan

The Gazelle EMGEE J reservoir comprises a tight Eocene formation underlying the existing oil
producing horizons. The hydrocarbons produced contain no H2S or CO2. The exploration and
appraisal wells have been plugged and abandoned after testing. NRGU E&P have indicated that
ten production wells will be required to support the predicted production profile.

Production Forecast
The production forecast has been generated by a reservoir simulator:
Gazelle
Year

Net Oil

EMGEE - J
J - wells

kbpd
2015
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32

63
57
51
46
41
37
37
33
29
25
22
18
13
9
5
1
0
0

3
6
9
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10

Gas

Condensate

mmscf/d

bpd

6
30
50
60
60
60
59
57
56
54
53
52
50
49
48
47
45
44

780
3900
6500
7800
7800
7800
7605
7415
7230
7049
6873
6701
6533
6370
6211
6055
5904
5756

Fiscal & Legal Requirements

It is a condition of NRGU E&Ps production licence for the field development that there is no
flaring of excess produced gas; all gas shall be consumed locally (offshore) for fuel gas with the
remainder exported to Fort Thomson. If an economic gas evacuation route cannot be found, it is
expected that a gas disposal well and associated facilities will be provided as part of the
development plan.
All environmental discharges must meet minimum accepted international standards.
All revenue gaining production streams must be metered to fiscal standards.

Gazelle Facilities Information

The present Gazelle production is via one steel jacketed production platform in 100m water depth
with two additional bridge linked well head jackets. Oil is exported via an oversized pipeline to
Fort Thompson
The field started production some years ago and has come off plateau. Current oil production
rates are around 65 mbpd with water cut of 15%. Water injection and disposal plants, sized to
meet expected future water rates, are operational and maintain production rates which are
predicted to show a slow decline with water cut increasing rapidly.
Two 50% trains each with 2 stages of 3-phase separation and surge vessel to stabilise the crude
oil to pipeline specifications. Oil is metered to fiscal standards prior to export. Gas from the HP /
LP separators and surge vessel is compressed and conditioned for use as fuel gas. A
vent/purge/blowdown system is maintained for emergency gas flaring.
There is no deck-load or space available on the existing Gazelle platform structure.

5. General information
Should you require further information to prepare a development plan, you are asked to make
assumptions on those issues for which you have no or insufficient information. Please ensure that
these assumptions are clearly detailed in your report.

Appendices

a. Cost information:

Item

Value

Discount rate
Royalty

4.00%
30.00%

Comments

Economics
Oil Price $/bbl

75

Note Gazelle oil price discounted due to

long term contract with refinery.

Condensate $/bbl

125

Premium price reflects use as chemical

feedstock

Gas Price $/000scf

8.6

Pipeline $mm/km
Subsea

12 dia pipe

Subsea

6 dia pipe

Land

1.5

all sizes

Bundle

10 Carrier with four lines

Jackets $mm
Piled

75

Concrete

200

Semi-sub

175

TLP

160

SBM

25

Export mooring buoy

Topsides Module ($mm)

Drilling (fixed)

75

Production separation

125

Water treatment module

100

Gas treatment module

140

Utilities

65

Accommodation

80

Floating ($mm)
FPSO Construct

225

FPSO Rent (/day)

0.35

Shuttle tanker - rent (/day)

0.15

150,000 bbl storage

for condensate export via SBM requires offshore storage

Operating Costs
Fixed (%ge of cum CAPEX)

5%

Variable gas $/mmscf

50

Variable condensate $/bbl

10.00

Well CAPEX ($mm)

Sub sea

65

TLP (dry tree)

45

requires drilling module

Platform

25

assumes jack-up drilling unit

The above figures are indicative costs only. You can use other figures if these are
justified with full explanation and references.

PRESS SPECULATION
NRGU E&P Inc. excited by EMGEE J4 flowback analysis September
2012
Exciting times for shareholders as NRGU E&P Inc. continues to release details from its flagship
Ras Al Zubair, EMGEE J4 well, the long-awaited follow-up to its proof-of-concept EMGEE J3 well,
the first horizontal fracced well drilled in this license which ran into mechanical and completion
issues in 2011.
NRGU E&P who took over in 2008 believed that the underlying deeper tight Eocene zones could,
with the aid of the horizontal drilling and multi-stage hydraulic fracking techniques that
revolutionised drilling in North America, deliver many times the discovery well production rates.
But, as long-time shareholders can attest, this vision has proved far more challenging, and costly,
to deliver and the current well is the company's second attempt to get this right.
Initial signs are encouraging: the recovered condenstae, which has an average API value of 48.3
degrees, has been transported via a temporary export system using a leased shuttle tanker to a
nearby refinery for sale, where it attracts a premium price.
The gas is currently being flared during testing but in the future there will be ready demand given
this is the offshore hub for the Greater Gazelle region, where fuel gas shortage results in fuel gas
prices of US$8.40/mmbtu (US$8.61 /mscf). The oil/condensate to gas ratio is reckoned to be
around 130 barrels of liquids per mmscf, some 300 per cent higher than anticipated during well
design. This is an unexpected boost for the company.
"It is a nice sweetener to continue production of oil which sells for an attractive price during flowback and clean-up as some wells only flow water during early clean-up, says the current MD,
Brody Chance, who took over in December 2012
True to form, however, the well has thrown up complications, with pressure data indicating a
partial clogging of the well bore perforations due to the breakdown of the polymer gel used in the
frac fluid and very fine particulate matter.
The company will use a chemical flush to clear the blockages, which it says is a common
remedial treatment in the industry and not unexpected for such a pioneering well. As the first
well of this type in the Gazelle Basin to "flow-back and clean-up" Chance commented, it is not
unexpected for some remedial work as part of those operations, - So far, so good, it seems.

Source: CrudeNews

CONFERENCE REPORT
Fort Thompson, Ras Al Jumar 26/8/2009
Ras Al Zubair oil output threatened by platforms running out of juice - AH
Press
The Ras Al Zubair oil industry is facing the threat of a cascade of rig closures, unless ageing
platforms can urgently source more gas to help squeeze out the remaining barrels. The potential
threat to oil revenues looms as Ras Al Zubair prepares to vote in January's national elections -- a
debate in which oil production forecasts have become a political football.
The affected offshore area, the Gazelle trend, is a very mature part of the basin where producers
are trapped in a vicious circle of falling output, rising costs to patch up ageing platforms, and
dwindling power supplies. To lift more oil from these depleted reservoirs, producers need to inject
vast quantities of water -- a power intensive process that requires a reliable source of fuel gas.
Some platforms are not able to generate enough of their own fuel so have to try and import the
shortfall from neighbours, but the overall net position will go negative as early as 2016. This could
force the early abandonment of rigs, with the loss of critical platform hubs sounding the death
knell for dependent fields.
'We may be near a production efficiency precipice,' said Muhanned Al Ahmad, economics and
joint venture manager at RAZONG (Ras Al Zubair Ministry for Oil & Natural Gas), speaking at Oil
& Gas Ventures Fort Thompson conference earlier this summer. 'Because of the
interconnected nature of this area, there is a domino effect that kicks in.'
Al Ahmad presented findings from a cross-operator work group he co-chairs which seeks to
improve co-operation amongst producers focused on the 'Gazelle Rejuvenation Area'. This
includes NRGU E&Ps Gazelle hub, which will leave the most stranded assets if shut down early.
The fall in production efficiency means that time is running out. The Rejuvenation Area is now
producing at just 7 percent of its peak, compared with 29 percent for the Ras Al Zubair Offshore
Industry as a whole.
Possible solutions
To arrest this decline, producers need to lay their hands on fresh power supplies. Under
government auspices, a Gas Working Group is looking at ways to source, transport and deliver
reliable fuel gas. 'We've got to get this fixed a very small amount of gas could make a lot of
difference to this area,' Al Ahmad said. 'If you can improve water injection then it delivers a
significant incremental uptick in barrels.'
As output has declined, platforms have become increasingly dependent on each other for fuel
gas supplies and to spread fixed costs. The leveraging effect of any one party withdrawing is
getting bigger as margins are squeezed. Al Ahmad described a downward 'death spiral' where
less power leads to lower water injection, so production falls and there is less fuel gas for water
injection. Eventually the platform becomes uneconomic and has to cease production.
'We are all inextricably tied together, we depend on each other. We have no time left to make
mistakes,' Al Ahmad said.

Source: Associated Hackers Press