Upstream Value Chain

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NEXUS ACADEMY
DPR Management Training
October 2016
DPR Management Nexus 2015
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Value Chain in the Upstream Sector
DPR Management Nexus 2015
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Value Chain in the Upstream Sector

• Upstream Sector of the Oil Gas Industry
• This sector comprises of the following activities
  and processes
• Resource Rights Acquisition
• Exploration
• Field Development
• Drilling
• Reservoir fluid production
• Reservoir Fluid Processing?
• Decommissioning

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Value Chain in the Upstream Sector
Upstream Operations Activities
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Value Chain in the Upstream Sector
Optional Activities that May be carried out by
Upstream Operators depending on Operational
Philosophy
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Value Chain in the Upstream Sector
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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Petroleum development agreements began in the USA
  where land owners owned natural resources and in
  the form of one paragraph Concession that granted
  mining/mineral rights over large areas and for
  long durations
• Concession is an official license granted by a
  landowner or government that allows work such as
  drilling for oil to be carried out in a specific
  area of land
• Country where petroleum development originated
  and international political
• economy shape the types of concession
• Developing countries which at that time were
  under colonial rule, were influenced by this
  practice and granted concessions in return for
  royalty and tax when they began to find oil

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• In modern practise licences/leases have taken
  over from old concessions with significant
  modifications
• Only limited areas now granted
• Only shorter durations of between 20-30 years now
  granted
• Sovereign state exercises direct control over
  petroleum development
• activities
• In terms of which well to drill, when and pace
  of operations through a work programme
• Better fiscal terms in favour of sovereign state
• Periodic relinquishment of part of area granted
• Industrialized states use licenses/leases more
  Production Sharing Contracts(PSC) and Risk
  Service Contract used more in developing
  countries
• PSCs are more popular than Risk Service Contracts
  that are only common in countries that have less
  capital at their disposal to pay for services
• Some countries use all these arrangements
  simultaneously

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Ownership of petroleum resources in Nigeria
• Operating Laws Controlling Oil Gas Operations
  in Nigeria
• Notwithstanding the foregoing provision of this
  section the entire property inshall vest in the
  Government of the Federation...(s.44(3) Const.)
• The entire ownership and control of all
  petroleum inshall be vested in the state (s.
  1(1) Petroleum Act)

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Ownership of petroleum resources in Nigeria
• Petroleum Act
• This is the main statute that deals with
  petroleum resources and how they may be developed
• It only provides for development of petroleum
  resources through phases of exploration,
  prospecting and production
• It grants to companies registered in Nigeria
  separate rights for each phase through a license
  /lease regime
• The Petroleum Industry Bill (PIB) being debated
  in the national assembly is expected to replace
  the Petroleum Act

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Operating Licences/Leases in Nigeria
• 1. Oil Exploration Licence
• OEL gives the right to undertake exploration for
  petroleum not exclusive
• It covers compact area not exceeding 5000 sq.
  miles for a duration to lapse by the 31st the
  next December
• It is renewable 3 months before end of period for
  a period not exceeding 1 year

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Operating Licences/Leases in Nigeria
• 2. Oil Prospecting Licence
• It gives exclusive right to explore and prospect
  for petroleum
• Explore and prospect implies oil drilling
  operations
• Since holder allowed to carry away and dispose of
  petroleum won
• during operations
• OPL holder expected to drill to find oil in
  commercial quantities to be able to qualify for
  OML
• It covers compact area not exceeding 1000 sq.
  miles for a period not exceeding 5 years
  including renewal
• In case of deep offshore minimum of 5 years
  aggregate of 10 years through amendment in Deep
  Offshore Act

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Operating Licences/Leases in Nigeria
• 3. Oil Mining Lease
• The lease gives the lessee exclusive right to
• Conduct exploration and prospecting operations
• Win, get, work, store, carry away, transport,
  export oil.
• Otherwise treat petroleum discovered
• Para 11 of First Schedule to Act
• It covers compact area not exceeding 500sq miles
  for duration not exceeding
• 20 years
• Note All oil mining leases deriving from an oil
  prospecting licence shall be in compact blocks or
  units and where more than one block or unit is
  so derived, each block or unit shall be the
  subject of a separate and distinct
• lease
• Petroleum(Drilling and Production Regulation) -
  (Reg. 293)
• 50 of area to be relinquished after 10 years of
  grant

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Operating Licences/Leases in Nigeria
• 3. Oil Mining Lease
• OML may be renewed indefinitely
• Condition for grant of Oil Mining Lease
• Minister may grant only OPL holder an OML
• If oil is found in commercial quantity (10,000
  barrels per day)
• If all conditions in licence satisfied
• Oil Block
• Two separate leases may be granted from single
  OPL(Oil Prospecting Licences Regulations -
  Conversion to Oil Mining Leases, ETC
• These are commonly referred to as Oil Blocks

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Value Chain in the Upstream Sector

• Oil Mineral Rights Acquisition
• Operating Licences/Leases in Nigeria
• 4. Farm Outs of Marginal Fields
• Farm out is assignment of part or all of an oil,
  natural gas or mineral interest to a third
  party(Farmee) in which the "farmee," pays the
  farmor a sum of money up front for the interest
  and also commits to spending money to perform a
  specific activity related to the interest, such
  as operating oil exploration blocks, funding
  expenditures, testing or drilling.
• Farm Outs only possible where
• Lease holder seeks consent of President to farm
  out marginal field out of its area
• President may cause a Farm Out of a marginal
  field where field unattended for period not less
  than 10 years
• Farm outs between IOCs (as holders of OMLs) and
  NNPC under U-JV, on one hand, and indigenous
  companies on the other
• Act says government must be satisfied with farmee
  of marginal field but does not stipulate who
  selects
• In practice bids carried out in past by Minister

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Value Chain in the Upstream Sector

• Oil and Gas Investment Types
• Partnerships in Oil and Gas Industry
• Oil exploration is a high cost, high risk
  activity from the view point that you may drill
  many wells and find nothing and the cost of
  equipment and service is high!
• To reduce the cost burden and risk, companies
  will make an agreement with other companies
  (partners) for mutual participation in the
  venture. Each partner buys into the agreement
  on the basis of paying a fixed of the costs.
• If the exploration is successful and the
  discovery is developed, each partner will take
  that same of the profits.
• One of the partners will be designated as the
  operator and the operator will be responsible
  for the development of the field and operation
  of the business.
• The operating company is paid additionally for
  taking that responsibility.

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Value Chain in the Upstream Sector

• Oil and Gas Investment Types
• Risk Service Contracts
• This emerged due to lack of technical, managerial
  and financial capacity of the government of
  developing countries where oil is found
• Under this arrangement IOCs used their own
  capital expenditure and operating costs to
  explore for petroleum BUT they only got
  reimbursed through a service fee if oil was
  produced and Sometimes IOCs were allowed to buy
  back part of oil produced as consideration for
  service
• Production Sharing Contracts
• Due to refusal of some countries to let IOCs
  participate in any form of oil gas ownership,
  they established NOCs
• The developing states engaged IOCs as contractors
  in respect of mineral/mining rights that they
  vested in their NOCs or Petroleum Ministries
• Under this arrangement IOCs First received cost
  oil to cover costs and expenses limited to a
  percentage.
• Thereafter, IOCs and NOCs split the oil produced
  known as profit oil to represent their return
  on investment

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Value Chain in the Upstream Sector

• Oil and Gas Investment Types
• Risk Service and Production Sharing Contracts
• In Risk Service and Production Sharing Contracts
  the IOC did not receive any reimbursement for
  their expenses or any return on their investment
  if no oil was produced
• Hence both arrangements referred to as sole
  risk
• Summary of World Oil Gas Investment Types
• Concessions used in 60 countries Production
  Sharing Contracts used in 41 countries Risk
  Service Contracts used in 4 countries
• Participation Agreements? Hybrid?

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Value Chain in the Upstream Sector

• Oil and Gas Investment Types
• Joint Venture
• A joint venture is defined as an entity in which
  the reporting entity holds an interest on a
  long-term basis and is jointly controlled by the
  reporting entity and one or more other venturers
  under a contractual arrangement.
• NNPC Act also allows it to go into ventures in
  petroleum development activities
• Joint Operating Agreements(JOAs) created between
  indigenous companies (as
• OPL/OML holders) and IOCs to achieve indigenous
  participation policy
• Farm outs created between IOCs (as original OML
  holders) and NNPC under U- JV (Unincorporated
  Joint venture), on one hand, and indigenous
  companies on the other, to achieve indigenous
  participation policy
• Unlike other countries, Nigerian statutory regime
  permits IOCs to hold mining/mineral rights

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Value Chain in the Upstream Sector

• Oil and Gas Investment Types
• Joint Venture Contd.
• However policy is currently being operated to
  direct NNPC and indigenous oil companies to hold
  these rights and for IOCs to be contractors
• Six U-JVs currently exist between NNPC on one
  hand, and Shell, ChevronTexaco, ExxonMobil, Elf
  and Agip with NNPC having between 55- 60
  participating interest, IOCs appointed operator
  under each U-JV because
• IOCs were already operating before U-JV
• State of technical readiness in Nigeria
• 95 of oil development in Nigeria estimated to be
  under U-JVs

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Value Chain in the Upstream Sector

• Field Development Plan
• Upon petroleum discovery in any field, With the
  information gathered from the Desk Study, Areal
  Survey, Seismic Survey and Exploration
  Drilling, the field Development Team produces
  the Field Development Plan. Required data
  include
• Reservoir pressure
• Flow rates
• Fluid composition
• Water content
• Gas to oil ratio
• Subsurface rock type and structure
• The seismic and the test data are used to
• Calculate Reservoir Extent and Fluid Content
• Determine the Optimum production rate
• Estimate the peak production time
• Estimate when to introduce secondary recovery/EOR
• Determine extra number of well to be drilled
  Drilling Programme
• Determine the production facilities, etc .
  Production programme
• These constitute the Field Development Plan

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Value Chain in the Upstream Sector

• Oil and Gas Field Life Cycle
• Every equipment, device, system or plant has a
  useful life
• Life Cycle is the period from the beginning of
  equipment use to when it is no longer
  economically useful
• For an oil or gas reservoir there comes a point
  when it is uneconomic to carry on recovering
  the hydrocarbons and the reservoir will be
  abandoned.
• The lifecycle of an oil and gas field involves
  many phases and activities, from licensing and
  exploration to production and decommissioning.

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Value Chain in the Upstream Sector
Oil and Gas Field Life Cycle
Activities Duration
Company given license to explore by government for a fee and a performance or work obligation. NOW
Seismic Surveys to discover petroleum. Site Surveys 3 5 yrs
Drilling Wild Cat Well and Appraisal Wells. Samples analyze and a lot of information gathered 4 10 yrs
With reservoir data, reservoir extent is determined development drilling, production methods are planned. Approval and development license obtained 1 yr
Procurement of materials and services, Design and Construction of production and transportation facilities Development Drilling Well completion Well and Production facilities test-run facilities commissioning 1 7 yrs
Monitor production to peak level and maintain level. Start secondary recovery/EOR when production start declining 10 30 yrs
Oil field no longer produces to justify economics of project. Fill in the wells, dismantle and remove all equipment and make environment whole. 1 yr
Licence
Geological Surveys Exploration
Drilling Production Development Plan
Field Development
Production Maintenance
Abandonment
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Value Chain in the Upstream Sector
Creating Value By Locating Oil Gas Reservoirs

• We recall that a reservoir is a porous and permeab
  le

Portion of

• Underground Trap Which Contains Oil and/or Gas as
  a Single Hydraulically-Connected System in
  communication with a mature Oil
• Reservoirs are invariably connected to a mature
  oil and gas source rock
• For oil and gas in a reservoir to be of any
  value, it has to be located.
• The process of location oil and gas is referred
  to as Exploration
• Exploration processes are Processes involved in
  Ascertaining the Presence of Oil Gas and
  Estimating its Extent, Quantity, Properties
  and Production Potentiality

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Value Chain in the Upstream Sector

• Creating value by locating oil gas reservoirs
• We recall that a reservoir is a porous and
  permeable Portion of Underground Trap Which

Contains Oil and/or Gas as a Single in
Hydraulically-Connected System

• communication with a mature Oil
• Reservoirs are invariably connected to a mature
  oil and gas source rock
• For oil and gas in a reservoir to be of any
  value, it has to be located.
• The process of location oil and gas is referred
  to as Exploration
• Exploration processes are Processes involved in
  Ascertaining the Presence of Oil Gas and
  Estimating its Extent, Quantity, Properties
  and Production Potentiality

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Value Chain in the Upstream Sector

• Creating value by locating oil gas reservoirs
• Exploration processes include
• Aerial Survey
• Low-flying aircraft over study area ?
  Geomorphology
• Examines the formation and structure of the
  features of the surface of the Earth
• Seismic Survey
• Provides detailed information on geology

Drill here!
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Value Chain in the Upstream Sector

• Creating value by locating oil gas reservoirs
• Exploratory Drilling
• Wildcat and Appraisal Drilling Verifies the
  presence or absence of hydrocarbon reservoir and
  provide information that estimate its extent and
  quantifies the reserves
• Development Drilling
• What is drilling?
• What are the processes involved in Drilling?
• How does Drilling add value to oil and gas?

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Value Chain in the Upstream Sector

• Creating value by the Drilling process
• Definition
• This is the process of making a well through the
  cutting of the formation rock
• through the application of a drilling equipment
  call drilling rig using a cutting tool called bit
  while the generated cuttings are circulated out
  of the well by a circulating drilling fluid under
  pump pressure.
• Drilling must be carried out with utmost
  concerned for the safety of personnel, both
• underground and surface environment. Drilling
  MUST be done SAFELY.
• Objectives of Drilling
• To discover oil and/or natural gas and construct
  a formidable, reliable conduit with
• life long integrity for the exploitation of the
  field reserve.
• To Generate Necessary Information for
• The Study of the Reservoir
• The Design of Appropriate, Effective and
  Efficient Production Facilities for the
  Hydrocarbon Content.

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Value Chain in the Upstream Sector
Creating value by the Drilling process
Typical Land Drilling Rig
Drill Bits
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Value Chain in the Upstream Sector

• Creating value by the Drilling process
• Drilling Method
• Rotary Drilling Method
• Bit Crushes Rock by Rotating Action and Applied
  Force (Weight)
• Rock Pieces(Cuttings) are Carried Out of Hole by
  Drilling Fluid(Mud)
• Circulated Through the Hole in the Bit.
• Mud is Sucked From Tanks and Pumped Through a
  Kelly Hose Into the Kelly Through a Swivel Down
  the Drill String, Out of the Bit, Up the Annulus
  and Out through the Well Head to Shale Shaker
  Back to the Mud Tanks.
• Engines Activate Drawwalks that Empower the
  Rotary Table and the Up and Down Movement of the
  Drill String

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Value Chain in the Upstream Sector

• Creating value by the Drilling process
• Discovers oil and/or natural gas
• Constructs a formidable, reliable conduit with
  life long integrity for the exploitation of the
  field reserve.
• Provide lifelong conduit for re-entry into the
  well and
• reservoir for maintenance and workover operations
• Provide lifelong conduit for production logging,
  measurement and data acquisition to monitor the
  production, well and reservoir status for the
  purpose of routine maintenance
• Generates Necessary Information for
• The Study of the Reservoir
• The Design of Appropriate, Effective and

Efficient Production Facilities for the
Hydrocarbon Content exploitation.
DPR Management Nexus 2016
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Value Chain in the Upstream Sector

• Creating Value by Enhancing the value of mature
  resources
• Mature Resources
• We recall that reservoirs are invariably
  connected to a mature oil and gas source rock
• They are rocks from which hydrocarbons have been
  generated or are capable of being generated
• Mature source rocks contain kerogen which gets
  converted to oil or gas through the process of
  thermal degradation or cracking when exposed to
  increased in temperature.
• The original kerogen with large and complex
  molecules breaks down
• and releases shorter chain hydrocarbons of oil
  and gas
• The value of the kerogen in the mature source
  rocks can be enhanced through the process of
  thermal cracking to produce oil and gas

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Value Chain in the Upstream Sector

• Creating Value by Enhancing the value of mature
  resources
• Processes of Enhancing the Value of Mature Source
  Rock
• Processes of enhancing mature source rock
  include
• Source Rock Mapping

• Areas underlain by thermally

mature
generative
source
rocks in a
sedimentary basin are called
generative basins or depressions or

• hydrocarbon kitchens.
• Mapping those regional oil and gas generative
  "hydrocarbon kitchens" is done by integrating the
  existing source rock data into seismic depth maps
  that structurally follow the source layers.
• Results of these mappings have statistically
  given rise to high success ratios in finding oil
  and gas worldwide
• In the United State, subsurface mapping of a
  source rock's
• degree of thermal maturity is the basic tool for
  the identification and broad delineation of shale
  gas.

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Value Chain in the Upstream Sector

• Creating Value by Enhancing the value of mature
  resources
• Processes of Enhancing the Value of Mature Source
  Rock
• Thermal Cracking
• Mining

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Value Chain in the Upstream Sector

• Creating Value by Enhancing the value of mature
  resources
• Processes of Enhancing Mature Source Rock
• Thermal Cracking
• Thermal cracking(Fracturing) of mature rock
  source results in expulsion of petroleum into a
  porous and permeable carrier bed.
• This process introduces heat of about 900 0C into
  the source rock that converts kerogen in oil
  shale into shale oil by pyrolysis, hydrogenation,
  or thermal dissolution

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Value Chain in the Upstream Sector

• Creating Value by Enhancing the value of mature
  resources
• Processes of Enhancing Mature Source Rock
• Thermal Cracking contd

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Value Chain in the Upstream Sector

• Creating Value by Enhancing the value of mature
  resources
• Processes of Enhancing Mature Source Rock
• Mining
• The mature rock is mined by conventional mining me
  thods crushed and pass through a retorting
  process
• Steam Injection Thermal Cracking Process

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Value Chain in the Upstream Sector

• Creating values by turning resources into
  bookable reserves
• For oil and gas in the reservoir to be considered
  to be of any values, it must be ascertained to be
  bookable reserve
• Oil and Gas Reserves
• The quantity of oil and gas estimated by
  prevailing engineering and mathematical
  computations at any time to be recoverable
  with prevailing technology from hydrocarbon
  accumulation
• Processes of ascertaining oil and gas in
  reservoir to be considered as reserves include
• Geographical/Seismic surveys to determine the
  extent of the reservoir
• Drilling a wild cat well to confirm the presence
  of oil and/or gas
• Drilling more wells to determine geological
  structure extent
• Running formation evaluation log to determine the
  quantity of oil and gas in-place

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Value Chain in the Upstream Sector

• Creating values by turning resources into
  bookable reserves
• Processes of ascertaining oil and gas in
  reservoir to be considered as
• reserves include
• Employing the physical(porosity, permeability,
  fluid compressibility, etc.) and
  thermodynamic(temperature, pressure) of the
  reservoir to determine recoverable hydrocarbons.
• Determine if the reservoir is economically viable
  and feasible to develop
• For oil and gas in-place that are economical but
  not recoverable due to either poor rock
  permeability, high fluid viscosity or low
  reservoir energy, processes in table below can be
  employed to it recoverable.

No. Reservoir Poor Characteristics Intervention Process
1 Poor Rock Permeability Fracturing
2. High Fluid Viscosity Heating In situ combustion
3. Low Reservoir Energy Water Flooding Gas Injection
Oil Shale and Shale Gas Thermal Cracking
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Value Chain in the Upstream Sector
The Basics of Oil and Gas Production System

• Value is added to oil gas and processes in a
  chain production systems which
• consist of
• The reservoir,
• The well,
• The flowline,
• The separators,
• The pumps and Compressors for Transmission,
• The transportation pipelines.

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Value Chain in the Upstream Sector

• Creating value by the Production process
• Typical Oil and Gas Completed and Producing Well

DPR Management Nexus 2
016
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Value Chain in the Upstream Sector

• Oil and Gas Production Systems
• Reservoir System
• Rock ? Grains
• Grains Interconnectivity
• Fluid System

? Permeability

• Pay Zone-Borehole Connections
• Cement
• Perforations
• Down-Hole Artificial Structures Production System
• Well Superstructure Members
• Casing
• Liner
• Tubing

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Value Chain in the Upstream Sector

• Oil and Gas Production Systems contd
• Down-Hole Artificial Structures Production System
• Well Superstructure Members
• Casing
• Liner
• Tubing
• Well Equipment and Devices
• Packers
• Subsurface Pumps
• Sucker Rod Pump
• Electrical Submersible Pumps, etc
• Gas Lifts
• Subsurface Valves
• Subsurface Control Valves
• Well Head

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Value Chain in the Upstream Sector

• Oil and Gas Production Systems
• Surface Production System
• Pipelines
• Separation Equipment
• Dehydration Equipment
• Sweetening Equipment, etc.

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Value Chain in the Upstream Sector
Oil and Gas Production Systems Integrated
Production System
WELLS
FACILITIES
GAS SALES
E.S.P's P.C.P. GAS LIFT
Gas Injection
EXPORT POTENTIAL
DELIVERY PIPELINE
Compressor Station
Sales Manifold Metering Control Gas Disposal
Lift Gas Manifold Gas/Oil Separation
Artificial LiftWells Gas Wells
PROCESS
OIL WELL (Free Flowing)
FLOWLINE
OIL SALES
EXPORT
DELIVERY PIPELINE
POTENTIAL
DEHYDRATION
EXPORT LINE
Trunk Line
TERMINAL
Water Disposal
Water Injection
INTEGRATED PRODUCTION SYSTEM
RESERVOIR
SALES
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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The creation of value chain in the oil gas
  industry is driven by
• Technology/Innovation
• Cost
• Efficiency
• Technology and innovation of more efficient and
  time conscious equipment and processes have
  created values in the operations in oil and gas
  sector more than any other drivers in this
  industry.
• Examples include
• The Twister Supersonic Natural gas dewpointing
  technology
• The MWD mud telemetry system
• SCADA System

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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Twister Supersonic Natural gas Dewpointing
  Technology
• Before the Twister natural gas hydrocarbon
  dewpointing was accomplished
• mainly by two plants(sometimes coupled in one)
  mainly
• The heavy hydrocarbon removal plants
• Mechanical refrigeration plants
• Low Temperature System(LTS) Plants
• Low Temperature Extraction(LTX)
• Turbo Extraction Plants
• Dehydration (water removal) Plant
• Glycol Dehydration (TEG) Plant
• Solid Desiccant Dehydration plant

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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Twister Supersonic Natural gas Dewpointing
  Technology
• Typical TEG Plant Process Flow Diagram

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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Twister Supersonic Natural gas Dewpointing
  Technology

Typical TEG Plant Process Flow Diagram
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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Twister Supersonic Natural gas Dewpointing
  Technology
• Drawbacks and Challenges of the combined plants
• Multitude of equipment
• Multitude of processes
• Requiring more personnel
• High equipment and operational cost.

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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Twister Supersonic Natural gas Dewpointing
  Technology
• The Twister Supersonic

• The Twister Supersonic Edge
• Less Equipment
• Less Processes
• All Processes at ONE go
• Less Operational personnel Requirement
• Less cost
• Competing favorably in efficiency

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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Mud Pulse Telemetry Technology
• The Heart of Drilling Operation
• Reduction of tc requires that real time data
  acquisition is made for timely monitoring of the
  drilling process in other to make valuable
  decisions in the drilling process.
• Timely and Valuable decision when effected,
  optimizes the drilling process and results in
  high drilling performance(Efficiency) and thereby
  reducing drilling cost
• Drilling Cost Reduction Chain

High Process Performance(Effic iency)
Real Time Data Acquisition
Timely Monitoring Decision Making
Process Optimization
Drilling Cost Reduction
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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• Surveying and Well Logging Before MWD
• Traditional Survey Measurement
• Single-shot Magnetic Surveying Tools
• Multi-shot Magnetic Surveying tools
• Equipment components made up on rig floor and run
  a wire line or go-devil
• b. Well Logging
• Logging or data measurement is carried and
  transmitted through electric wireline on the go
  as tool is being retrieved.
• Traditionally, done after well total depth(TD)
  has been drilled and entire well path logged

Tool made up Run on Wireline
Tool Components
Go-devil
DPR Management Nexus 2016
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Value Chain in the Upstream Sector
Creating Value Chain - Case Histories

• Surveying and Well Logging Before MWD
• Traditional Survey Measurement
• Uses photographic camera and film to snap
  ONE(single) shot of compass and pendulum reading
  on a disc
• Equipment retrieved after shot and disc developed
  and read on magnifying glass

Tool Retrieval on Surface
Magnifying Glass
Timer Activating Unit
Floating Compass
Viewing
Measuring Unit
Lens
Camera Section
Single-shot basic components
Developed Photographic Disc
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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• The Need for Telemetry While Drilling
• Running tools on wireline waste a lot of time
  sometimes running a single survey takes several
  hours especially in very deep wells.
• Depending on the type of orientation
  sub(receptacle) used, landing of the magnetic
  survey tool may incorporate erroneous inclination
  on survey
• When shot times are wrongly set, Multi-shot Tool
  may be in motion when survey is being taken
  resulting in bad survey.
• Pulling out of hole and stopping/waiting to take
  survey in troublesome formation may risk drill
  string being stuck and undermine wellbore
  stability considerations
• Prior to the advent of LWD, the lithology and
  other properties of the formation drilled can
  only be known after mud logging which waste time
  and this can be dangerous in case of troublesome
  or abnormal pressure formation.

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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
  Introduction of Measurement While Drilling
• Components of Mud Pulse Telemetry System
• Typical MWD Installation
• MWD Tool(in NMDC)
• Transducer
• Rig Floor Display Unit
• Surface Electronics(in MWD Cabin)
• Mud Screen
• Mud Circulating Path
• (Drill String, Swivel, Kelly hose Stand pipe)

Mud Screen
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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• Introduction of Measurement While Drilling
• Components of Mud Pulse Telemetry System
• MWD Tool Components
• Sensor
• Microprocessor
• Turbine
• Alternator
• Transmitter

Electronics
First Generation Teleco Direction MWD Tool
Teleco MWD Directional Gamma Tool
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Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
• Introduction of Measurement While Drilling
• Basic Principle of the Mud Pulse Telemetry System

Surface Electronics
MWD Sensor
Microprocessor Transmitter Transducer
Data Conversion Signal Generation Encoding with
Data Activation of Transmitter
Mud Pulse Generation and Propagation through
Mechanical or rotary Valve Flow Modulation
Signal Demodulation and decoding Data Production
in hard copy and graphical displays.
Mud Pulse Signal Conversion to Electrical Signal
Measurement Data
59
Value Chain in the Upstream Sector

• Creating Value Chain - Case Histories
  Introduction of Measurement While Drilling
• The Edge of the Mud Pulse Telemetry System
• The Edge of the Mud Pulse Telemetry lies in its
  gamut of applications as enumerated earlier in
  this presentation
• Drilling performance, optimization, efficiency
  and cost effectiveness, all rest in the alter of
  Mud Pulse Telemetry
• After 30 years of refinements, mud-pulse systems
  transmit data more quickly and more accurately,
  through increasingly deep wellbores. Oil Ga
  Journal (/23/2008)
• Mud-pulse telemetry is currently the most common
  method of transmitting
• measurement-while-drilling (MWD) and
  logging-while-drilling (LWD) data.

60
The Fuss About Petrol Price
61
Value Chain in the Upstream Sector
Any Question?