A close look at possibilities for production gains in Yukos’ neglected fields led to quadrupled output from almost half as many working wells and more potential remains, according to Dr. Don Wolcott, president of E&P Aurora Oil & Gas Co. of Moscow, Russia, a speaker at the E&P Brownfields: Optimizing Mature Assets conference.

Wolcott, who now runs his own company in Russia, came to that nation at the invitation of of

In 1999, Yukos’ per-well production, at 65 b/d, was below the Russia average of 71 b/d. In 6 years, production climbed to 258 b/d with half as many wells. (Graph courtesy of E&P Aurora Oil & Gas Co.)
the former chief executive officer of Yukos. His job was to take over three mature assets with a water cut of 78% that had been in decades of decline. His objective was to maximize field performance and field recoveries.

The decline started in 1986 as oil demand and prices in Russia drooped. As profitability slipped, investment fell and decline rates rose. The three fields that produced 2 million b/d of oil in 1986 had faded to about 800,000 b/d by 1999, Wolcott said.

The fields averaged about 65 b/d per well for approximately 14,000 wells, compared with the Russian average production of 71 b/d per well. These were not unusually poor wells for Russia. They fell into the same decline patterns as most of the other wells in the country.

Approach
“We focused on low-cost changes to enhance production. We calculated they were underproduced, identified wells with the largest opportunity for improvement and started conducting workovers,” he said.

That was the first step in raising the per-well average to 258 b/d in the existing wells between 1999 and 2004.

Next the teams started looking at waterfloods. It shut in the wells with the worst water cut and enhanced production from the better producers. That lowered the overall average water cut to 70% from 78% in 4 years.

The company began tracking per-bbl production costs. It cut the number of producing wells in half while increasing production four times, he said.

Production in Russia started growing at a rate of 24% a year. Other Russian companies followed Yukos’ lead, but Yukos was the biggest contributor to that growth, he said. As it improved performance, Yukos lowered its production cost to US $1.54/boe. That compared with $4.59/boe for Chevron and $5.70/boe for Tatneft.

Finding and development costs fell to $1.07/boe, on average, between 2001 and 2003. That compared with $1.48 for LUKoil and $8.55 for Chevron, Wolcott added.

Technique
It’s all about applying differential technology and know-how. The steps include:
• Calculate the potential of wells;
• Use pattern management on waterfloods;
• Get enabling software;
• Calculate performance gaps;
• Rank opportunities;
• Institute training programs; and
• Fill in the gap between existing performance and potential.

The improvement team defined performance as the quality of results from changes made to the potential production of the wells and fields. Compare the potential with a car, he said. If the gas pedal is floored and the car is going 120 miles (193 km) an hour, that’s great for a Russian Lada, but if it’s Michael Schumacher in a Formula 1 Ferrari, something’s broken.
“A bigger number is not necessarily better performance,” he added. “If you don’t know the potential, you can’t measure performance.”

In this case, the company divided reservoir pressure readings by potential pressure readings to find operating effectiveness, and it divided engineering performance by the well’s potential performance and added in a “Mother Nature” factor (formation efficiency). It used those numbers to calculate biometric sweep.

For individual, natural-producing wells there’s usually small room for improved performance, Wolcott said.

Waterfloods
Waterfloods get more complicated. In those situations, the company broke up the fields into “Siberian boxes” of 30 wells each and tried alternate injection and production patterns to come as close as possible to the maximum potential performance.

The improvement team classified wells as green, yellow or red. Green wells had high
As it improved well performance, Yukos set low marks among industry leaders for finding and development costs. (Graph courtesy of Deutsche Bank)
potential, yellow wells were all right and red wells had little potential. A red well might be cycling a lot of water and not much oil, he said. If a green well produced at a higher rate than its potential, the team figured it couldn’t produce that much with the well description they were using; there must be more oil in place.

The Siberian boxes allowed the Yukos team to calculate stream lines for water floods. If the pattern showed a lot of stream lines to well bores, the waterflood sweep was good.
If the analysis showed places that weren’t getting any stream lines, they said the sweep was ineffective in that area and shut down the wells that actually detracted from the performance of good wells. Engineers could see where sweeps could be improved, and they could see sections of the field that weren’t getting swept by the waterflood. In one case, the company shut in 13 wells and made enhancements to others to improve overall performance.
In another case, he said, engineers ran across a poorly flooded area with very poor production. It shut in poor wells to get more production from fewer wells by taking advantage of a better sweep.

Improvements in oil wells in Russia require the same technique as maximizing performance in any area, in or out of the oilpatch. “Know the potential. See where you are. Find
the gaps. Rank the gaps. Close the gaps,” he said.

Responding to questions from the audience, Wolcott said Russia has about the same reserves as Mesopotamia, around 300 billion bbl of oil, and Yukos had 100 billion bbl of those reserves before the breakup of the company. “It’s a great place for oil and gas reserves; better and less expensive than offshore,” he said. “At Yukos, even with all the things we did, we still were only at 37% efficiency. Most companies don’t know that number and can’t calculate improvements.”

Wolcott encouraged fracturing to improve production efficiency. More fracturing offers a more linear sweep and more ultimate recovery, he said.

If a fractured well intersects another well, the wells were drilled too close. And if an injector is drilled next to a producer, a fracture might travel directly from the injector to the producer, short-circuiting oil production. An operator can convert both wells to injectors to improve a water sweep.

In Russia, he said, Yukos went to a nine-spot pattern. Even there fractures may propogate differently from pattern to pattern because of reservoir pressure, stress and field changes. An alert operator must manage those changes.

At the same time, Wolcott was critical of volumetric efficiency mapping. “The problem with ‘closeology’ engineering is that you’re comparing one well with close wells. You should look at the potential. When you do volumetric comparisons, it doesn’t allow you to understand the performance gaps,” he said.

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