Chevron’s deepwater bet

Elaine Maslin

December 1, 2014

Deepwater is a big play for Chevron – one which comes with challenges that the super major is working hard to overcome.

Transocean’s drillship Discoverer
Deep Seas, which drilled at Chevron’s Tahiti prospect. Image from Chevron - Statoil ASA


According to Craig May, managing director Chevron upstream Europe, Chevron’s deepwater production, which includes a broad portfolio of projects from heavy oil to sub-salt, “big gas” and LNG, will almost double by the end of the decade.

Technology, he says, will be key to enabling projects, but also reducing costs, he says, and while new technologies had already pushed boundaries, to continue pushing the deepwater envelope, more need to continue to be developed, not least in drilling and completion.

“Technology is enabling deep water development by making the impossible possible and the possible less expensive,” he said during a deepwater-focused prevention in Aberdeen in October.

“Records continue to be set around the world as the industry explores deeper prospects. We have moved from bigger to smarter developments and we need to continue to be smarter. Technology needs to deliver cost reductions to create a future for field developments and improve competitiveness on existing assets.”

May says Chevron’s deepwater technology vision spans from “the top to the bottom,” from dry tree solutions to seismic imaging.

Subsea imaging, drilling and completions, subsea systems, floating production facilities and safe operations, are some of the key areas Chevron is working on, says May.

Dual gradient in deepwater

Looking at drilling specifically, Chevron’s drilling efficiency program has been looking at dual gradient drilling, May says.

“Dual gradient drilling is a great example of where the impact of water depth on mud weight is eliminated by placing the mud pump on the sea floor. So this removes the riser effect and is essentially like drilling the well on the sea floor,” he says.

Chevron is currently using dual gradient drilling technology in its exploratory drilling. “The dual gradient drilling technology creates a step-change in our safety exposure by simplifying the well designs and reducing the drilling bundle,” May says.

“Benefits include fewer casing runs, as well as larger casing at the reservoir depth, which gives us more completion options. Advanced drilling efficiency initiatives have helped reduce drilling times and therefore explosive times in the Gulf of Mexico Wilcox trend from over 160 days in 2004 for Chevron’s Jack number 1 well to 80-90 days per well by 2009, so quite a significant prize.”

Clever completions

Technology is also helping to optimize completions and significantly reduce the cost, May says.

In the Gulf of Mexico, where the lower tertiary reservoirs have low permeability, achieving high fracture rates requires fracture stimulation, he says. “Thick intervals require 3-5 frac packs.”

In 2007, Chevron teamed up with Halliburton to design and build a new system – an enhanced single trip multi-zonal completion system. It is a downhole completion system, which includes a Schlumberger insider perforating gun to minimize shock and debris, that enables Chevron to stimulate and gravel pack thick multiple completion zones in a single trip.

The completion challenges in a lower tertiary trend are the combined reservoir pressures, and 1400ft interval lengths, May says. Yet, using this system has enabled Chevron not only to be more efficient, but also save costs.

“Halliburton’s enhanced single trip multi-zonal completions are an example of deploying a new technology that took early vision, early commitment and early partnership nearly 10 years ago,” May says. “After the Jack and St. Malo discoveries in 2003 and 2004, we realized we would need a step change in our completion practices to reduce the cost.

“So far we’ve used that single trip system on four completions, we’ve seen savings of approximately $150 million, when compared to the conventional completion methodology,” May says. “We’ve successfully executed the technology for both the cased hole and openhole systems, and we verified that we’ve had quality completions through a drill stem flow test on two of the completions, one in Jack and one in St. Malo.”

Intelligent well completions providing zonal control and sand face monitoring offer further potential. They can help sustain and improve recovery factors on secondary and enhanced oil recovery projects, May says.

Chevron successfully installed intelligent well completions on subsea wells on its Gulf of Mexico Tahiti project. “Next, we want to install these on lower tertiary completions with their even higher reservoir pressures,” May says.

Dry trees - lower drilling costs

Dry tree concepts could also save cash and make drilling and intervention easier and cheaper he says. Chevron is working on two dry tree semisubmersible concepts, with Kvaerner and HOE, to bring such benefits.

“Compared to current wet tree systems, dry tree systems can improve reservoir management and reduce well intervention, resulting in increased rates and recoveries,” May says.

According to DeepStar’s database, for Gulf of Mexico Miocene developments, dry trees can offer a 5% incremental recovery, or in some cases, as much as a 20% incremental recovery, “which is a very significant prize,” May says.

“Incremental recovery in Wilcox reservoirs is estimated as a bit lower at 3-5%, but this is still a very significant prize. This is a result of the lower well costs, which enables more wells to be drilled, with tighter well spacing, and also provides lower costs for infield interventions.”

“Chevron leads the industry in maturing two promising dry tree semisubmersible concepts,” May adds. “Semisubmersibles do not have the payload restrictions of the Spar, or the water depth limitations posed by a tension leg platform. Direct access to wells will limit dependence on mobile offshore drilling units. Quayside integration would reduce costs and schedule risks.”

The dry tree semi could be a technical enabler, when large payload and water depth are required, perhaps a commercial enabler for marginal fields when increasing recovery rates and reducing costs associated with drilling, completion and intervention of subsea wells are key to commercialization, he adds.

Reducing costs

Records continue to be set around the world as the industry explores deeper prospects, May says. “Costs need to be reduced,” May says. “Using technology to reduce the time it takes to achieve completions is helping Chevron.

“We have moved from bigger to smarter developments and we need to continue towards smarter. Technology needs to deliver cost reductions to create further for field developments and improve competitiveness on existing assets. Producing assets will need less complex incremental technology with immediate impact. We need to look out at what other industries are doing and overcome resistance to things ‘not invented here.’ In areas where intellectual property is less sensitive or the price is so large it is to everyone’s advantage to work together.”