New Producer Technologies Available from PTTC

Bruce Wells and John Benton

critical issue facing U.S. independent A producers today is the need to more fully understand and apply recent developments in exploration and production technologies. These technologies could help increase the ultimate recovery of oil and natural gas resources and avoid the premature abandonment of wells. As independents increasingly acquire reservoirs pre- viously operated by the majors, the need for effective dissemination of both new and existing technology becomes even more important. This process, known as “technology transfer,” is key to sustaining the domestic petroleum industry.

For the first time, a March 1996 report from the Petroleum Technology Transfer Council (PTTC) presents a national perspective on the needs of producers not only by category, but also by regional priorities. The report, Technol- ogy and Related Needs of US. Oil and Natural Gas Producers, offers a timely tool. The report can be used by research institutions and tech- nology providers to target technology transfer efforts to the specific subjects and regions where they are needed the most.

p?TC is a national nonprofit organization that serves as the technology clearinghouse for the oil and natural gas exploration and produc- tion industry, which is composed mainly of independents. Its mission is to accelerate the flow of information about cost-effective technologies to producers and to provide input to the technol- ogy and research and development (R&D) com- munity about the technical problems, needs, and priorities of petroleum producers. Information on technologies comes from the government, universities, professional and trade societies, national and commercial labs, the service indus- try, private industry, and similar sources.

The initiative to form F”ITC was led by the Independent Petroleum Association of America (IPAA), along with the state and regional pro-

ducer associations, the Interstate Oil and Gas Compact Commission (IOGCC), the Gas Re- search Institute (GRI), and other groups. The Department of Energy (DOE) has supported the effort and provided seed money to start the program in all regions of the country. Since 1994, p?TC has served as one of the best mechanisms for disseminating DOE-sponsored upstream technology and information to the industry.

. . - accelerate the flow of information on cost-effective

technologies to producers. . .

To help focus future technology transfer efforts on the industry’s highest-priority national and regional needs, PTTC, together with its regional lead organizations, conducted 32 “prob- lem identification workshops” in all oil and natural gas producing regions of the United States. Collectively, the workshops covered nearly all of the nation’s major reservoirs and geological plays in the 33 states that have oil and/or gas production. In 1996 and beyond, PTT% hopes to conduct additional problem- identification workshops in some of the states that were not included in this initial series.

Nearly all the workshops identified similar kinds of problems in several subject areas. There were some variations among regions, reflecting different basins, geology, and devel- opment experience. The results of PTTC work- shops reveal major needs in the areas of explo- ration and production (E&P) technology and R&D, as well as concerns related to technology

Bruce Wells is communications manager and John Benton is technical manager of the Petroleum Tech- nology Transfer Council, Washington, DC.

SEPTEMBER 1996 NATURAL G A S 0 1996 John Wiley & Sons, Inc.

11

transfer and public regulation of oil and petro- leum operations.

The workshops identified a broad array of technical barriers, technology needs, and re- lated concerns in all categories of petroleum E&P operations in all producing regions of the nation. In many of these areas, technologies and solutions already exist that can be brought to bear to address the problems under current economic conditions. In some cases these tech- nologies need to be improved to increase their efficiency or reduce their costs.

The P'ITC problem identification report in- cludes the results of these workshops, held between 1991 and 1995. The complete report, including a database on diskette, is available from PTTC.

PTTC Mission and Organization PTTC has several strategic objectives: im-

prove the industry's technology transfer infra- structure; identify problems, needs, and priori- ties of domestic oil and gas producers; identlfy current technologies to address the priority problems and needs; inform producers about the availability and performance potential of technologies and data; and communicate back to the public and private R&D community the technology needs of producers.

P'ITC is divided into two parts: the national structure for general management, and the re- gional structure for grassroots implementation. At the national level, P'ITC is composed of the board of directors, which includes representa- tives from not only independent companies, but also majors, service companies, industry associa- tions, and three professional societies. It also has a small, full-time staff, which manages the na- tional program and handles all contractual, fund- raising, and administrative functions. The re- gional structure is broken down to cover ten areas of the country. There are two key entities in each region: the Producer Advisory Group (PAG) and the Regional Lead Organization (RLO).

Now that the PTTC structure is in place, new opportunities arise for leveraging resources. Many RLOs are combining their P'ITC-related function with other, similar technology transfer efforts in which they are involved. Such teaming and cooperative efforts are leading to more opportunities available for producers to learn about the new and existing technologies that they so desperately need.

Technology workshops in the main oil and gas producing areas are offering solutions to address the highest-priority problems in each region. To the extent possible, the workshops present specific technologies to resolve certain problems or to suggest new reservoir manage- ment and development approaches. The work- shops take the form of highly focused presenta- tions and short courses, depending on the problems to be addressed and the technological solutions being presented.

The RLOs are nonprofit corporations re- sponsible for managing and performing the day-to-day functions of P'ITC in the region. These organizations, mainly universities and state geological surveys, have the mission of de- veloping a comprehensive technology transfer program that meets the articulated needs of the operators within that area. Each RLO is respon- sible for coordinating and planning all P'ITC- related activities with the members of its PAG.

. - . mission of developing a comprehensive technology transfer program that meets the articulated needs of the operators within that area.

More than 200 producers make up the PAGs, which advise the RLOs and help coordi- nate industry cost-sharing.

To address many of the issues raised at the problem-identification workshops, eight open P T K Regional Resource Centers offer oil and natural gas producers and their engineers ac- cess to databases, libraries, industry literature, and state-of-the-art software programs. Leading industry software developers have donated soft- ware on 3D-seismic interpretation, reservoir simulation, fracture stimulation design, log analy- sis, pump optimization, log digitizing, and in-fill drilling models, among others.

The PTTC resource centers represent a federal, state, and university partnership for maintaining domestic oil and gas production by helping to place new oil and natural gas tech- nology into the hands of producers. The re- source centers are designed to facilitate greater interaction among operators in specific geologi- cal basins and plays. They have been estab- lished at existing regional locations known for

12 NATURAL GAS SEPTEMBER 1996 0 1996 John Wiley 8 Sons, Inc.

their industry expertise. These locations are usually at universities or geologic surveys, be- cause these organizations have the interdiscipli- nary experts, available facilities, and the ability to offer cost-sharing. As the centers become equipped with their full range of functions, PTTC regions are holding introductory sessions to acquaint producers with available services.

One of the main functions of the resource centers is to provide troubleshooting and tech- nical referral services to producers that connect with the resource center either by phone, fax, modem, personal visit, or attending a P’TTC function. PTTC is in the process of documenting specific examples from the regions to illustrate how such a national technology clearinghouse can be directly beneficial to any individual oil or gas operator.

Supplementing the centers and technical workshops is information exchange via a net- work of home pages on the Internet. P’TTC has implemented a new information system for use by producers and others to share information using the Internet, the fastest-growing tool in interactive communication today. The system is composed of a national home page estab- lished by P’TTC headquarters and direct links with the ten regional home pages maintained by the RLOs.

One result of developing this national oil and gas electronic information network has been that P’TTC has developed an extensive information exchange computer network, in- cluding technical forums on a variety of sub- jects. p?TC regions are organizing federal, state, and university on-line data and Internet re- sources. They are also providing low-cost work- shops on how to access the information. The P’ITC Eastern Gulf Region, for example, hosted a seminar, “Archiving and Dissemination of Oil and Gas Information and Review of Oil and Gas Regulations,” at its resource center in Tuscaloosa, Alabama, on March 26. Other regions are hold- ing similar workshops.

The PTTC national home page on the Internet continues to expand. In March, it added a guest registration page for users who want to receive the organization’s quarterly newsletter, P7TC Network News. The page also maintains one of the most comprehensive industry technical events calendars. The calen- dar contains information on workshops, fo- rums, conferences, and seminars being held

throughout the United States, including details about P’TTC technology workshops scheduled in each region. The registration page helps measure producer access to P’TTC resources and provides important feedback on subject areas most often sought. In addition, a newly created sub-page lists the officers and chief staff members of state and regional oil and natural gas associations and other organiza- tions. P’TTC contacted the associations and offered the listing at no charge, including hot links to their own home pages.

. . - extensive information exchange computer network,

including technical forums on a variety of subjects.

Links to other industry organizations con- tinue to grow as P’TTC headquarters and its ten regional home pages refine content to meet the technology needs of the increasing numbers of producers seeking information on-line. Usage of the home page’s topic-specific technical forums increases daily, with posted questions passed on to the RLOs for answers and referrals.

The Internet home pages allow producers and the technical community to communicate, access information, data, analytical tools, down- load software, and analyze problems and op- portunities. The PTTC national home page re- sides on a server donated by the Cray Research COT. at its Minnesota Super Computing Center. The national home page address, http://www. pttc.org/hq, can be easily located through most Internet search engines.

PTTC Regional Lead Organizations

respective states that they encompass. Below is a list of the P’ITC regions and the

Appalachian RegionGEastern Kentucky, New York, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia). The Appala- chian Oil and Natural Gas Research Consor- tium at West Virginia University serves as the RLO for the region. It includes the state geological surveys of New York, Ohio, Penn- sylvania, and West Virginia, and the Depart- ments of Geology and Petroleum Engineer- ing at the University of West Virginia.

SEPTEMBER 1996 NATURAL GAS Q 1996 John Wiley & Sons, Inc.

13

Central Gulf RegionqLouisiana). Louisi- ana State University (LSU) Energy Center serves as the RLO. Eastern GulfRegionqAlabama, Florida, and Mississippi). The Geological Survey at the University of Alabama serves as the RLO for the region. Midwest Region-(Illinois, Indiana, Michi- gan, and western Kentucky). The Illinois State Geological Survey (ISGS) is the RLO for the region. North Midcontinent Region-(Kansas and Missouri). The RLO for the region is Kansas University Energy Research Center (KUERC), which is composed of the University of Kansas's Tertiary Oil Recovery Project and its Departments of Geology and Chemical and Petroleum Engineering, along with the Kansas Geological Survey. Rocky Mountain Region-(Colorado, Mon- tana, Nebraska, North Dakota, South Da- kota, Nevada, Utah, and Wyoming). The Colorado School of Mines (CSM) is the RLO for the Rocky Mountain Region. South Midcontinent Region-(Arkansas and Oklahoma). The RLO for the region is the Oklahoma Geological Survey (OGS), in cooperation with the University of Okla- homa and the Oklahoma Commission on Marginally Producing Oil and Gas Wells. Southwest Region-(Arizona and New Mexico). The RLO for the Southwest Region is the Petroleum Recovery Research Center (PRRC), a division of the New Mexico Insti- tute of Mining and Technology. Texas Regiort-(Texas). The Bureau of Eco- nomic Geology at the University of Texas serves as the RLO, with the Texas Indepen- dent Producers and Royalty Owners (TIPRO) as a subcontractor to perform certain out- reach efforts, including an electronic bulle- tin board. West Coast Region-Waska, California, Or- egon, and Washington). The West Coast Region is led by the Petroleum Engineering Department at the University of Southern California pending approval by the P'ITC board of directors.

PTTC Technology Workshops Since P'ITC started operating, it has held a

number of workshops addressing specific tech- nologies that have demonstrated value to pro-

ducers in specific regions in the United States. A summary of several of the workshops is pre- sented below.

The Central Gulf Region held a workshop covering the use of 3D seismic as an exploration and development tool to improve success rates. The workshop included hands-on work with one of the more popular workstation-based 3D- seismic software packages. The region also held a workshop that demonstrated a 3D software package that runs on a PC platform. Hands-on instruction was provided by Seismic Micro- Technologies, the developers of the software. In addition, the region has held a workshop cov- ering processing and disposal of produced water in environmentally sensitive areas.

Several regions have held workshops on data acquisition. The primary purpose of these workshops has been to help producers locate the various sources, both public and commer- cial, of geologic, engineering, and well data that are available in their region. With the prolifera- tion of data sources that exists, it is sometimes difficult to keep up with what is available. P lTC has enabled producers in some regions to locate sources of data that they had not been aware of before or to reduce their data acquisition costs. In one instance in Texas where some specific formation data did not exist but was needed by producers, PlTC notified the Bureau of Eco- nomic Geology (BEG) about the need for the data. The BEG was able to use its resources to obtain the data for the operators.

With the proliferation of data sources that exists, it is

sometimes difficult to keep up with what is available.

Another popular workshop has been to provide instruction on how to access the Internet. As the World Wide Web (WWW) continues to grow, its usefulness as a tool for oil and gas producers to obtain information, access soft- ware, and network with other producers to solve problems continues to grow rapidly. (See Exhibit 1 for a list of national and regional P'ITC websites.) Many producers have expressed a desire to learn more about the Internet and the WWW. As a result, P'ITC has held several workshops that provide hands on training in

14 NATURAL GAS SEPTEMBER 1996 0 1996 John Wiley & Sons, Inc.

what is needed to ac- cess the Net, how to access it, where to ob- tain oil and gas informa- tion, how to download data and software, and how to operate the more popular e-mail systems so producers can use the Net as an effective networking tool. The Internet workshops have been among the most popular work- shops that PTTC has conducted.

p?TC has also held workshops on reservoir characterization and management. One of the more popular series was a traveling workshop that showcased a number of the DOE Class I reservoir demonstra- tion projects. The projects demonstrated the application of a number of technologies includ- ing 3D seismic, improved reservoir character- ization, cross-well tomography, and horizontal drilling. The workshops discussed the applica- tions of the technologies, their success or fail- ure, and the relative value of using the technolo- gies on specific projects.

A couple of regions have held workshops on advanced drilling techniques. Topics cov- ered included application of advanced drilling tools, coiled-tubing drilling, horizontal drilling, and under-balanced drilling. The workshops usually present case studies of the application of a technology, its cost, and the relative benefit of applying the technology.

The various PTTC regions have also held workshops covering artificial lift optimization, produced water control, conformance control, well stimulation, casing leak detection and re- pair, air quality operating permits, chemical treating, water-flood optimization, and manage- ment of mature oil fields.

In addition to holding workshops, PTTC’s Texas Region has created play-based user groups. The purpose of these groups is to help promote interaction to solve problems among producers who work in the same play or plays. A number of these groups have been formed in the last year. During the group meetings, producers are provided information on new technologies that

may benefit their operations. In addition, they have a chance to discuss their operating prob- lems and work together to solve them. The ultimate benefit of these groups is that they will develop into a “best-practices” forum that will serve to improve the profitability of all of the user-group members.

In summary, PTTC has been able to provide operators with a system of obtaining informa- tion locally on technologies that have been used both in their own regions and in other regions to successfully improve their operating margins and reduce finding costs.

The Bottom Line The importance of technology transfer to

domestic oil and gas operators cannot be under- estimated if we plan to have a significant petro- leum industry in the next five to ten years. U.S. companies must use the highest level of tech- nology available to locate new reserves, improve recovery from existing fields, and economically produce the nation’s remaining resources.

With an effective mechanism for technology transfer such as m C , combined with the new developments that are occurring every day in the technical and research communities, inde- pendents will be able to access and integrate cutting-edge technologies into their continued operations.

Technology may not be a panacea for the industry’s fundamental problems, but it will help operators find and produce more resources and improve their bottom lines.

SEPTEMBER 1996 NATURAL GAS Q 1996 John Wiley 8 Sons, Inc.

15