Qatar’s Al Shaheen field uncovered

International oil companies came, saw the scale and scope of the task, and walked away. That is until Maersk Oil took up that challenge in 1992 in cooperation with Qatar Petroleum (QP).

The 1992 deal was a landmark Exploration and Production Sharing Agreement (EPSA) for the offshore Al Shaheen Block 5, which sits just shy of 80 kilometres off the Qatar coast. Maersk Oil Qatar, in cooperation with QP has since developed the field, exceeding all expectations; with oil production from the field reaching over 300,000 barrels per day, and for a time generating Qatar’s largest hydrocarbon revenue stream.

The field has been developed in three stages, with the most recent Field Development Plan (FDP) signed in 2005, positioning Maersk Oil Qatar at the heart of QP’s oil producing future. The extension project, affectionately abbreviated to 2005 FDP, aims to increase production beyond the 330,000 barrels per day recorded in 2008 and includes an investment of was to increase production with  an investment package of
US$6 billion.

The 2005 FDP is a huge undertaking. The project encompasses the drilling of more than 160 production and water injection wells over a six year period.

Fifteen new platforms were required, (several currently on barges inching their way towards Qatar’s waters from overseas, international contractors). These platforms are to be twinned with accommodation and production facilities and the whole project interconnected by subsea pipelines.

Significantly, the project also entails the construction, installation and operation of additional facilities, for the gathering and delivery of associated gas to QP (via its own offshore installation nearby) for utilisation at QP’s onshore plants.

The plan also included the completion of a very comprehensive shallow depth 3D seismic survey, as well as enhanced oil recovery techniques in the water flooded reservoirs of the Al Shaheen Field.

Whilst the Capital Expenditure of the project may not be the largest in the world, most global observers would be hard pushed to find a more complex undertaking: Mixing existing Brownfield production with vast new Greenfield developments. Production, drilling and accommodation units have been assembled from around the world, and the integration and hooking up will take place whilst keeping production at full tilt. Throughout this, remains the challenge to ensure personnel safety and limit environmental impact, as per the rigorous boundaries set by QP and Maersk Oil.
 
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Undertaking this mammoth task is a tight-knit team based in Doha. Within minutes of striking up even a casual conversation with anyone in the team it’s apparent that the project has developed an in-house culture of its own.

That’s not to say the team is especially small. It’s just impossible to shake the feeling that each of the hundreds of employees in the Maersk Oil Qatar tower knows each other, and is aware of the role everyone plays to reach a common goal.

There is a diverse group of employees, with Qatari nationals and expatriates from every corner of the globe going about their jobs without any acknowledgement this is exceptional in any way. It’s not uncommon, I’m told, that teams of less than 30 can include 16 different nationalities, but its very much business as usual here in Qatar.

To convey a broader understanding of both the project and the business behind it, Oil & Gas Middle East was granted access throughout the company, to meet the team behind the project.

Overlooking the Gulf’s fastest growing city, department heads, managers and business leadership figures broke down the Al Shaheen Field’s history, development and future vision.

John Cheesebrough, senior project manager, has worked on all three stages of the development plans, and reveals how intricate planning and rigorous scheduling has allowed the project to grow smoothly, and safely. Karsten Jenson, production operations manager explains what keeps the Field producing at staggering utilisation and output levels, and Esbern Hoch, head of geoscience details the geological and petrophysical challenges that make these achievements all the more unique. 
 

Project Focus

The scope, complexity and schedule of FDP 2005 combine to create a project of a genuine international scale. The magnitude of the project is clear from the 140,000 tonne weight of new facilities to interconnect with existing facilities and additional pipelines to meet the requirements of the integrated process and system operation.

Centralised power generation will be provided by one of the world’s largest offshore power generators, via sub-sea cables to satellite process platforms.

Substantial brownfield modifications have been necessary to facilitate the full integration of the existing and new facilities. Modifications require careful planning and execution to minimise disruption to ongoing production, whilst also creating an efficient system of early integration of new facilities as they are progressively introduced.

These expansion activities coupled with multiple Engineering Procurement Installation and Commission (EPIC) contracts combine to create a schedule of complexities unusual even in the international Oil and Gas industry.

Managing that new influx of activity is John Cheesebrough, who says that despite dealing with the project management of the Al Shaheen project for over a decade, the newest phase has brought its own specific challenges.

“In 2005 market conditions were tougher from our perspective because of the EPIC contracts we were handling. We could only go to firms with international experience and a broad range of capabilities. We had to look a little further afield than on the previous phases to find the right partner.”

Major elements of the project sent outside of the region included a platform award which went to a firm in Malaysia, and the accommodation units which went to a UK firm.

Closer to home, two wellheads went to J Ray McDermott in Dubai’s Jebel Ali, and three production platforms were constructed down the road in Abu Dhabi’s Mussafah Industrial Zone, by NPCC.

“One of the NPCC production platforms stands as the largest platform built in the Gulf region, roughly 13,000 tonnes topside,” explains Cheesebrough.

Due to the nature of working simultaneously on multiple platforms and the interfacing needed between a development project and an existing production site, Cheesebrough says that bringing the engineering in-house was critical, and one of the cornerstones of keeping the project on-track.

“Because of the complexity of Brownfield and Greenfield development we mobilised our own principal engineering team. This has been invaluable because the production team we need to liaise with on a daily basis are just one floor away in the same building. This means we can plan well ahead to minimise downtime, keep production interruptions to a minimum and maximise uptime – and more than that – we’ve managed to achieve this without a single lost time incident, and that’s a major achievement on a project of this size.”

One project management arena Cheesebrough is particularly proud of is the commitment to schedules Maersk Oil Qatar has managed to maintain throughout the roll out of FDP 2005. He says that by adhering to extremely strict parameters the company has both paved the way for a fluid deployment, whilst also giving the contractors the environment they work best in.

“We sat down very early on in the FDP 2005 planning stage and worked out what the sensitive elements of the project would be. One of those was long-lead equipment because in 2005 the whole industry was extremely busy, which meant the manufacturers of key equipment were also working close to or at capacity. To combat this negatively impacting on our schedules, we went out into the market and pre-ordered all of the turbine-driven machinery (generators, water injection pumps and gas compressors), and the titanium shell and tube heat exchangers.”

Cheesebrough says that by placing these orders early, Maersk Oil Qatar were able to pass those delivery schedules to the contractors and by doing so took a lot of stress out of the scheduling of key equipment, an initiative that he conservatively estimates saved the FDP programme six months on the overall schedule.

A further tactic rigorously adhered to was being crystal clear about the scope of work at the award stage. “Many operators have a tendency to fine-tune the engineering as they go along, modifying elements of the project, putting in variation orders, and ultimately altering the schedule. We are very mindful of the fact that once that tinkering process begins you totally change the environment in which you are executing the contracts. As a rule we never change the scope. It has always been Maersk Oil’s North Sea philosophy, and that set of values transferred here.”

Combating the drought of engineers which plagued the energy industry in 2005 was also a major challenge for a project manager with a tall order.

The rampantly competitive market for talent four years ago meant that oilfield service companies and Engineering Procurement Installation and Commission (EPIC) contractors alike were chasing an increasingly mobile workforce – a dangerous situation when the jobs involved require stability and familiarity more than a regular influx of new starters.

“We found a good solution early on to the engineer issue. One of our contractors decided that the best thing was bring all of the engineering in-house, which required our support. We willingly gave that support and put some of our own people there too, which kept us totally informed of any issues the company was facing, and the results were very satisfactory.” 

Production

Detailed planning and innovative thinking is required to install new facilities whilst still minimising shut-downs from the operating rigs in the Field and ensuring minimum impact on process safety. The FDP 2005 represents a challenge to integrate facilities expansion safely and within full compliance of environmental regulations, whilst pushing process and utility equipment to their limits, and where possible, beyond original design capacities.

Karsten Jensen is the FDP 2005 Production Operations Manager; he says making sure the entire Field is ready for all the new facilities takes a lot of manpower. The Production Operations Department started with around 80 direct Maersk employees, but as the FDP 2005 programme has grown to influence production, that number has swelled to 180.
“When we are a full complement the team will be 199, but in addition to that we have around 240 (which will grow to 340) external contractors
provided through a local manpower firm.”

Maintaining output and being operationally in charge of all areas within a 500 metre safety zone around all offshore facilities, has meant that Jensen is constantly developing the production work processes so that disruption is kept to a minimum, whilst ensuring that everything is ready for ‘hook-up’ when the time comes.

Despite the changes Jensen says that with meticulous planning, maintaining extremely high utilisation and production output is possible.

“We have a wide variety of key performance indicators focusing very much on meeting a very high production target, but also staying within the guidelines for environmental impact and safety standards. Keeping uptime targets in the 98% plus region whilst continuously improving performance is our remit, and one we’ve worked well to. Currently we have a target of 99.6% uptime for production and we are achieving that.”

North Sea operations are often viewed globally as the pinnacle of operational performance, and Jensen says that many KPIs from the UK and Danish waters are transplanted across the entire Maersk business globally, and it’s a credit to his team that those benchmarks are attained in a field as challenging as the Al Shaheen.

“We have built on experience from the North Sea, but the learning curve here is very steep – and that’s something that makes the project extremely exciting and professionally rewarding. It’s special here in Qatar because in addition to expanding the field and increasing production, there is a very prominent focus on the environmental impact, both from the Qatari side, and from Maersk Oil Qatar internally. We’ve taken the challenge of combining production growth, whilst reducing environmental impact head-on, and had particular success with flaring reduction.”

Today the project keeps flaring to a minimum, with a combination of pilot-flaring, shut-down flaring and as little production flaring as possible. “As the project is further rolled out, more gas compression capacity will come on stream, and captured gas will be exported by a neighbouring platform operated by QP, and then on to onshore facilities at Mesaieed, where it will be utilised for power generation,” says Jensen.

Recruitment in production has had its challenges over the course of the project, but since the economic slowdown, and last year’s collapse of the oil price, the tension in the market has eased considerably. “It may have been luck or intuition, but I decided to stop hiring when the market was completely overheated, and that’s something I’m very happy about because there are some excellent candidates available in the market now. We still have some growing to do, and now the quality level is much better and we are in a good position to take advantage of that now.”

Jensen says that even at the height of the energy industry boom Maersk Oil Qatar were able to maintain an extremely low turnover of 1-2% for employees on direct hire, and a fluctuation between 2-5% for external contractors. He puts this down to good market analysis. “We undertook quite a lot of benchmarking to ensure we were paying people at a fair and competitive rate, and that has certainly helped us keep our retention figures so good.”

Maintaining the corporate ethos and staff processes has remained very important to Jensen, and is an area where focus has to stay strong. “A lot of people have joined the company and we have more than doubled in size since 1996, and whilst that’s good in the way that you get the advantage of their outside experience, I think it’s equally important to ensure you protect the values that a company like Maersk Oil holds dear. Every company thinks they are special to some degree, but preserving that culture is very important to us.” 
 
Going underground

Maersk Oil’s expertise in horizontal well drilling is what has enabled its successful development with the Al Shaheen project. Two factors integral to this success have been the innovative use of technology and successful integration across disciplines and with QP, to consistently learn, improve optimisation and push the limits – to help Qatar achieve its vision of becoming one of world’s major energy producers.

The challenges and complexities of developing the Al Shaheen Field are vast due to the conditions within the reservoirs and expanse of the field. Successful development is dependent on the constantly improved understanding of the reservoir and fluid distribution to development and reservoir.

The world’s largest 3D high-res survey has been undertaken to help characterise the reservoirs and already the FDP 2005 has seen 105 development wells drilled in extremely challenging reservoirs; geosteering into very thin layers, some only metres thick. That 3D survey was complicated by the fact that the acquisition was in very shallow waters.

Understanding, digesting and utilising all the data produced from the survey is Maersk Oil Qatar’s Geosciences team, headed up by Esbern Hoch. Running an operation of 24 people covering the broad spectrum of Geologists, Petrophysicists, Geophysicists and Technical Assistants, the group is charged with developing and continuously characterising the complex reservoirs that make up the Al Shaheen Field.

“It is an extremely dynamic department to work in,” enthuses Hoch. “We are always learning and filtering those lessons through to the planning of the wells and following up everything we learn or encounter during the drilling and long horizontal drilling of the wells.”

The Field is comprised of three main reservoirs and there is a team dedicated to each. “Each team comprises the full competence range so that we can attack the reservoir data from every perspective, and integrate further with the reservoir engineers. We change and adapt our development approach every day depending on the lessons we learn and the data we receive, so for me its an incredibly exciting working and learning environment.”

Maersk Oil pioneered the horizontal drilling techniques in the North Sea, entering the record books in 1987 with a world record. Since then the company has performed more than 550 sand-propped fracture operations, utilising more than 190 million pounds of sand, and performed more than 60 acid fractures in horizontal wells.

The initial data acquisition and appraisal of the Al Shaheen Field, determined that Maersk Oil’s experience was an ideal fit for the challenge. “It wasn’t exactly a perfect fit, because there are key differences, but we saw a great opportunity to push what we had learned previously and adapt it to the Qatari challenge,” says Hoch.

The accumulations in the Al Shaheen field, whilst substantial, sit in extremely thin layers, at times barely more than one metre thick, but stretching
for ten kilometres or more in some cases.

The field is rarely considered ‘giant’ because of the complex challenges involved in exploiting its resources, but Hoch says that by pushing the envelope of what is now possible in terms of data acquisition, and combining many inputs, the team working on FDP 2005 have managed to make the seemingly impossible hugely profitable for Qatar.

“Seismic is probably the area in geosciences where we are seeing the biggest steps forward, Techniques and methods are developing, and in our case through very high level integration with well data. We have pushed the seismic data to the very limits of the resolution it can provide, combining that with masses of information from our wells” Hoch continues.

Managing the flood of data from over 230 horizontal wells, across an area that’s currently 700km2, but could potentially stretch to 2500km2 is a colossal task, but one Hoch relishes, and clearly enjoys extracting every bit if information from.

“Wherever we are in the FDP, we aren’t just thinking about what we can do today, we are constantly thinking about what we can do tomorrow. Right now we are using water injection to displace oil and build up pressure around the producers, which can deliver much better recovery” adds Hoch.

The three main accumulations are made up of two carbonate and one clastic reservoir, further complicating the Geoscience team’s work.

“With the carbonate reservoirs there is a huge variation across the Field in terms of the oil’s specific gravity. In some areas it can vary between quite heavy oil and quite light oil, which naturally has a huge impact on how you develop those wells. Also there are fractures systems throughout, but new seismic acquisition and interpretation is making a massive difference to our understanding of the reservoir.”

Few observers will have missed the announcement in 2008 that Maersk Oil Qatar had set a new world record, when a horizontal well drilled in the Al Shaheen field reached a total depth of 40,320 feet(12.3km), with a horizontal section of 35,770 feet.

The nature of the oil deposits in Al Shaheen require horizontal drilling to make development viable, but was going for the world record (Maersk Oil Qatar is in the Guinness Book of World Records, and Hoch displays the certificate proudly in his office), really a production necessity, or just a case of showboating?

“That’s a good question,” laughs Hoch. “Many people want to know why we do it this way, and the simple answer is value for money. The cost per foot of drilling that well was exactly the same, if not cheaper than drilling shorter ones. It boils down to economics and drilling this way has led to vast advancements in efficiency due to minimised infrastructure requirements and a decrease in the number of platforms and wells required.”
 

Future Tech

On a global perspective, horizontal drilling, and managing complex offshore project developments look like excellent areas for an oil company to have built a solid reputation for performance. New environments are not likely to be like the super-giant fields common to this part of the world.

“The new environments in West Africa, the Gulf of Mexico, and offshore South America are all technically challenging and demanding arenas, but this is what Maersk Oil has been doing, and doing well for over two decades,” beams Hoch.

“I think that makes this a very attractive industry to work in. The future of oil production will not just be about drilling a well and extracting oil, it’s going to be complex and challenging and that’s exciting.” he says.

The FDP 2005 is in its fourth year, but the project is rapidly approaching its most critical and exciting phase.

As the new tonnage arrives and links up with the existing infrastructure, all eyes will be on the Maersk Oil Qatar and Qatar Petroleum flagship project. Scheduled to be completed in Q4 2009 – Q1 2010, all industry eyes will shift offshore as the year progresses.

RECORD BREAKERS

Maersk Oil Qatar set a new world record in 2008 , when a horizontal well drilled in the Al Shaheen field reached a total depth of 40,320 feet (12.3km), with a horizontal section of 35,770 feet.