Payment on results

Elaine Maslin

June 1, 2016

TNW is taking a brave step as it launches its new intervention service line. Elaine Maslin reports on the company’s new business model – payment on results.

Mini-coil installations. Photos from TNW.

TNW, set up a few months ago, has launched a subsidiary StimLite to offer well intervention services combining some relatively new technologies, including a green cleaning fluid, radial jetting, and downhole fiber optics, into a ‘no results-no fee’ package, with joint venture partner Well Services Group.

StimLite will look at manned and unmanned platforms, most likely where there is already a coiled tubing unit on deck. Operations will involve a minicoil, or 5 1/8in coil, with a small footprint, which will apply a green well cleaning fluid, Biosul, to remove to wax deposits.

Biosul is a mix of 13 ingredients from plant fibers, which together dissolve wax from the wellbore and leaves a coating to prevent future wax build up for a few months, TNW CEO Paul Landers says. “Biosul is a fairly new approach to this, rather than using acid,” he says. “It has been around a few years in South America in various wells and can be used to clean crude oil tanks.”

Then radial jetting can be used. As a concept this has been around since the 1980s, but only started to be looked at more in the 2000s. It involves using high-pressure fluid being expelled through a high-pressure hose and a nozzle to drill, in StimLite’s case, 100m into the formation. In cased holes, a cutter, or milling tool, is used first to penetrate the casing and cement. Using this technique can both stimulate the well and access missed pay zones, Landers says.

Then, a fiber optic cable, to be provided by a England-based downhole acoustic survey (DAS) company, will be installed downhole to enable monitoring, with the idea to make sure production is increased for at least 12 months. Dutch firm Well Services Group is providing the technicians, minicoil and radial jetting equipment. StimLite has acquired the international rights for Biosul, produced in Brazil and used by Petrobras, according to Landers.

Of course, based on a no production increase, no pay basis, TNW won’t want to just take whatever wells the operator throws at it. There would be screening first and wells would be stimulated on a campaign basis, Landers says.

“If we can use new technology to increase production significantly, that’s great,” says Landers, who has some 30 years’ experience in the oil and gas business, primarily in the service sector, but also advising operators and national governments. “But, they [operators] don’t have money to spend, so we put together an approach where you come in and intervene in wells, stimulate with green chemical, use radial jetting, and put down fiber optics for ongoing monitoring – and do it for free. If it doesn’t increase production, we take the cost. But we’re sure the vast majority of wells will increase and we will take a share of the profits.”

Across Europe, StimLite will be targeting some 250 onshore wells and more than 700 offshore wells it thinks will be suitable, at a rate of four wells per week onshore and 12 wells a month offshore. It expects to take a share of the extra oil and gas production from a well it has worked for the first year.