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Salt Dome: challenges
and opportunities for OCTG

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June 2012 Contact us
Salt Dome: challenges <br/>and opportunities for OCTG

At a glance, salt in itself might not be the most challenging parameter regarding drilling & production operations.
But combined with others it is definitely part of the challenges
to overcome in the years to come to access the reserves laying under or above salt layers.

Pre-salt globally

Geologically speaking, “pre-salt” refers to a reservoir that was deposited prior to a layer of salt. In the Southern Atlantic, the salt layers were deposited more than 100 million years ago in a space formed by the geographical separation of the American and African continents. Salt being a good sealing element, the source rocks – i.e. the organic matter or kerogen – deposited during the opening of the South Atlantic basin, also called the “rifting process”,  ended up enclosed in sealed, temperate, and pressurized formations, and were then later transformed into hydrocarbons (oil and natural gas). Therefore, even though “pre-salt” operations were so far concentrated in the Gulf of Mexico and offshore Brazil along the western margin of the South Atlantic – making Petrobras and its partners, including Vallourec, precursors in “pre-salt” operations. A similar geological structure is expected offshore West Africa, in the conjugate eastern margin of the South Atlantic. In 2008, Brazil’s proven reserves were up to 14 billion Boe, and it is considered to be up to 23 billion Boe thanks to pre-salt reservoirs by 2030, which is a lot at stake in spite of the technological challenges involved. The potential pre-salt reserves, the experience acquired offshore Brazil, the latest technology developments, and the rising global demand in Oil & Gas thus made Oil companies and Vallourec already looking at salt-linked challenges to be overcome in offshore west-African countries, among them Gabon & Angola.

Pre-salt Brazil

Brazil’s first discoveries happened between 2006 and 2008 in two main offshore basins: Santos Basin, where 51 wells were drilled from 2005 to present with a success rate for Petrobras of 100%, and Espirito Santo basin where 31 wells were drilled by Petrobras with a success rate of 87%. The main pre-salt discoveries in these basins are the Tupi field (renamed Lula upon commercial declaration), with proven reserves of 5 to 8 billion Bep, Iara, and Parque de Baleias with respectively 3 to 4 billion Bep, and 1.5 to 2 billion Bep proven reserves. Other pre-salt reservoirs were discovered in these basins, such as the giants Franco and Libra prospects, or more recently like the Pao de Açucar, in Block BM-C-33, where the formation test recently indicated a production of 5,000 barrels oil and 807,000 cubic meters of gas per day – and in other areas offshore Brazil where exploration goes; it is also currently estimated that only 28 % of Brazilian pre-salt fields are already under concession and therefore further discoveries are expected.pre-salt had tremendous geopolitical impact on Brazil. As it is forecasted that pre-salt production should represent about 30 % of Petrobras production by 2020, the Brazilian national oil company planned large investments in pre-salt Exploration & Production operations, going up to USD 117.7 billion between 2011 & 2015. These investments, aimed at meeting global oil & gas demand, include technological partnerships with suppliers settled in Brazil like V & M do Brasil, contracting of specialized local services, of new production units in Brazil such as 35 new production systems, and contracting & training of qualified local personnel.

Operational & technical challenges

Reservoir modelization

As Professor François Roure, Expert Geologist at IFPEN (French Petroleum & New Energies Institute) stipulated, the main challenge today lays in the possibility to create a reliable geological model through seismic imaging – in other words the main challenge is to find an accurate depth geological model able to delineate the reservoirs closures. Basin modeling is also important at early stage to simulate the hydrocarbon potential and evaluate the risk of overpressures under the salt. Ultimately, the operator needs to know accurately what formations to expect in order to decrease drilling risks and costs. Even though technology evolved a lot in the last decade, geologists and geophysicists worked on developing algorithms that would allow the processing of the seismic profiles in such a manner as to make what might be nestled underneath the 2,000 meters of salt more visible. “We must be optimistic about pre-salt fields development, but there are some real technological challenges”, said Professor Roure. “There must be a particular workflow between imaging, drilling and pressure linked risk mitigation. We need to be sure that thermodynamics of the geological formations were studied before looking either at the wells structures, at the tubes needed for building them, or at the associated drilling techniques.”
Being the precursor in pre-salt operations, Petrobras has already solved many of these early hurdles related to the knowledge of geological characteristics of Brazilian pre-salt and its consequence on drilling and well integrity.

Salt-layers characteristics

One key challenge is the fluidity of the salt that, despite being a rock in that state, can swell during the drilling phase and imposes non-uniform collapse conditions over tubulars used in well construction. Above all it should be noted that Brazilian salt fields combine in fact several additional challenges besides the salt layer itself:
• well depths up to 7,000 meters,
• ultra Deepwater conditions with up to 2,000 meters between surface and seabed,
• acid corrosion caused by H2S and CO2 (up to 12 % in Tupi for example) contaminants,
• temperatures and pressures tending toward HPHT conditions in certain areas.
Associating these parameters all together has an important impact on exploration models, and on the requirements for OCTG material able to withstand such a combination of mechanical, corrosive and thermal constraints.

Drilling & Production of pre-salt layers. © Petrobras

Reservoir characterization and production strategy

Reservoir characterization, including in depth knowledge of the reservoir fluids properties is also a challenge. Petrobras has derived a well-defined operational strategy that includes, after the initial exploration wells, an Extended Well Testing phase aimed at refining reservoir knowledge, followed by the implementation of pilots that are small-scale production units designed to evaluate the best production strategy. As an example, Lula incorporates the first pilot unit in the Santos basin pre-salt, which will amongst other task evaluate the production efficiency of several well designs, completion options and injection strategy. This includes studying re-injection of the CO2 produced gas that, besides being an interesting candidate for EOR (Enhanced Oil Recovery) is also conceived as a storage technique to avoid ecological concerns associated to venting CO2 in the atmosphere, potentially quite significant in volume given future pre-salt productions

Logistical challenges

Finally, most of these fields are situated a long distance from the shore: between 150 and 300 kilometers. This constraint leads to logistical challenges, not only regarding life support & offshore operations optimization, but also in terms of gas transportation back to shore. Being such a long distance from shore at sea depth going down to 2,000 meters has a signi-ficant impact on Line Pipe selection process and R&D needs. For now, a gas pipeline between Tupi area and the Mexilhao platform was installed, capable of transporting 10 million cubic meters of gas, but other alternatives are currently under study that might allow bigger flows, including other pipeline construction and LNG (Liquefied Natural Gas) that would be transported using FPSO (Floating Pro-duction Storage and Offloading) or FSO (Floating Storage and Offloading) units.

Tubular products requirements

Well design challenges

Regarding to tubular supplies, these extreme conditions must be studied thoroughly at a very early stage by both the operator and the tubular supplier in order to get the right metallurgy and connection chosen to meet efficient drilling & production objectives: enabling the well architecture to maximize production, avoiding casing collapse, enabling the surface or subsea equipment to withstand the weight of the whole casing column, and avoiding corrosion to set in. Most obviously, the combination of reservoir depths, external pressure from the 2,000 m salt layer and high fluid pressure imposes usage of tubulars with high yield strength and high collapse performances; OCTG casings up to 140 ksi in yield strength have been used in some exploratory wells, and high collapse grades are routinely incorporated in well designs. In such critical deepwater environments and with wells engineered for 20 year lifetime minimum, the basic expectations of well designers is for OCTG connections to be designed as robust as the pipe and qualified to the highest ISO 13679 level CAL IV.
Besides mechanical loads, tubulars might also be subjected to H2S presence. Therefore High Strength Sour Service grades such as C110 or proprietary125 SS grades, or even combined collapse & H2S resistance (HCSS) are typical choices for production casing. Extremely high CO2 contents from the reservoir, with potential worsening due to CO2 reinjection, also drives material selection toward special CRA (Corrosion Resistant Alloys) materials such as super13Cr. This applies not only to the tubings that are already commonly selected with such metallurgies for other projects in corrosive situations, but also to production casings placed at the bottom end of the strings that may be exposed to both the corrosive fluid and significant collapse pressures. Such constraints on the tubulars therefore imply production of heavy wall large OD CRA casings: manufacturing of the tubular in such thickness, as well as design and qualification of adapted connections, imply early collaboration with the operator.

Typical geological formations met in Salt Dome applications.

Local industry developments and innovations

This pre-salt opportunity is also perceived in Brazil as an important mean to develop further the local industry, as evidenced by the increasing local content requirements imposed for operation in the pre-salt areas. Given the ambition of the development plan and the technological challenges involved, this imposes that key supplies should not only be developed, but also industrialized locally at a very fast pace. Through its local production capabilities at V & M do Brasil (VMB) in Belo Horizonte and by efficient coordination of local and worldwide R&D, Vallourec naturally became the key partner for pre-salt development. A dedicated organization was set through the VPP (Vallourec pre-salt Project) with the objective to reduce time to market: in answer to the operational challenges previously mentioned products such as:
• VAM® 21,
• VM 125SS,
• high collapse grades and
• large OD super13Cr casings
were developed, industrialized locally, homologated and commercialized in short timeframes.
Interestingly enough, the same technical causes (high H2S and CO2 level, water depths) have also driven similar developments in line pipe products, another historical product line at VMB:
• high strength sour service grades (X70, X80) and cladded pipes for corrosion resistance,
• end truing,
• double jointing and J-Lay collars for operational  efficiency.
And V & M do Brasil nowadays continues extending the local product and service portfolio, with the recent addition of Drill Pipe and accessories production units in Brazil as well as the continuing expansion of already existing service bases and associated offers such as rig-ready products and field services.
And the future looks even more promising: with R&D investments booming and largely dedicated at developing cutting edge E&P technologies with the support of local universities and suppliers, there should be plenty of opportunities for Petrobras key technological partners. As trends such as for example HP/HT exploration, drilling with casing, underbalanced or managed pressure drilling are being foreseen as the potential next operational stages, new developments will surely be required in the fields of corrosion resistant metallurgies, connection designs or thermal insulation. Vallourec, already a long-term partner of the CENPES (Petrobras R&D) with five technical cooperation agreements in place is therefore setting up a brand new R&D center in Rio de Janeiro (see news section).



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