Slimhole Drilling: An Economic and Effective Answer to the Development of Previously Known "Uneconomic Reserves"

Abstract

The economics of exploration and production (E&P) continue to encourage use of new methods to reduce costs. Slimhole technology is one such method which offers effective cost reduction by reducing; equipment size, tubular costs and environmental impact. The technology is a proven alternative to conventional drilling operations. Since it is now technically feasible and economically viable to produce from smaller well bores. It has become a realistic alternative to the development of previously known uneconomic reserves. Also extensive application in exploration has validated the use of disposable slimhole wells to improve seismic data interpretation. Currently the E&P industry faces the challenge of increasing production to meet growing energy needs. Many proven reserves remain unexploited due to unfavorable economics (e.g. small size, remote location). A reduced cost slimhole drilling plan can put these reserves to production. This paper outlines the application of slimhole technology to the development of such reserves which cannot be developed using conventional drilling. Cost reduction, which is heavily influenced by hole size, is a major factor prompting the application of slimhole technology to development of small reserves. This paper provides economic comparison between slimhole technology and conventional methods of exploitation. It also outlines a strategy to identify and produce smaller reserves using slimhole as an effective technique for enhancing exploitation economics. Introduction Since the days of giant discoveries are squarely in the past (see Figure 1). Petroleum industry needs to look for better means of exploiting hitherto uneconomic reserves. The basic equation for success in the E&P industry has changed very little over the past few decades. All players remain focused on increasing production while lowering costs. Even though there are ample reserves, a shrinking volume of easy-to-produce reserves has set up a challenge for the industry to continue applying this formula and keeping up with growing global demand. To enjoy profitability while meeting this challenge, E&P companies are partnering with service providers and employing ‘new’ technologies. Cooperative efforts are uncovering novel approaches to unlocking profitability through innovative use of technologies like slimhole drilling, completion and production. Economics of marginal oil and gas fields or thedevelopment of by-passed reserves in many cases do not allow drilling and completion of full-size production/injection wells. Slimhole completions may provide an economic alternative to produce such reserves. Oil and gas community has already seen strong interest in slimhole technology as a means to lower drilling cost and make this industry more competitive. For a better understanding of critical economic parameters Economics plays a vital role in the drilling operations of a well and the economics to produce smaller fields demands a cheaper system. Since, shrinking well bore sizes just shrinks all the costs associated with it. So, slimhole drilling technology can assure to open new opportunities for the development of marginal or previously known uneconomical reserves. Besides providing lowcost wells for the development of marginal reserves, slimhole drilling can also provide long-term reservoir monitoring and increased production from various resources. Basically, reduction in well bore size also decreases reduction in materials (especially casing, tubulars and drill pipe), labor, and support equipment i.e. all serve to reduce drilling costs by as much as one-half of the cost of drilling a conventional well. Volumes of drilling fluids and cuttings could also be lowered by one-fifth, reducing disposal costs. Furthermore, smaller footprints and lower disposal volumes lowers the environmental impact of drilling activities making slimhole drilling applicable in environmentally sensitive areas.