California's Elk Hills oil field has arrested its production decline with an approach based on total quality management (TQM) principles.
Before 1992, production at Elk Hills, home to one of the U.S. naval petroleum reserves, had been sliding at a rate of 8%/year. It currently produces 65,000 b/d, the same level as a year ago.
Dan Hogan, director of naval petroleum reserves in California in the Department of Energy's Office of Fossil Energy, credited TQM with effecting the I billion bbl-plus field's turnaround in a talk before the San Joaquin Valley chapter of the American Petroleum Institute.
Hogan is responsible for managing exploration, development, and production in the field. DOE is field operator with Bechtel Petroleum Operations serving as contractor.
"IMAGINEERING"
An important TQM principle, Hogan said, is "imagineering," which he defined as "looking at how things are and trying to imagine the perfect process or a better situation."
An example Hogan cited is a cogeneration power plant slated for construction in 1994 in Elk Hills field.
"We are the largest electricity consumer in Kern County," Hogan said. "We will reduce that bill by more than $1 million/month when we start converting our own natural gas to electricity and heat."
The 40,000 kw cogeneration plant will use only 9 MMcfd of the field's 350 MMcfd of production. Process heat will be used to help gas processing plants in the area. About 37,000 kw of electrical power will be used for field operations and the remainder sold.
DOE/Bechtel has chosen a construction site, almost completed design engineering and ordered turbines and other major equipment for the cogen plant.
HORIZONTAL DRILLING
Another example of imagineering Hogan cited is horizontal wells.
"We were the first to drill large-hole horizontal wells in California, and it has paid off," Hogan said.
"We are now considering drilling horizontal wells to replace all the vertical wells in our 26R reservoir, with the advantages of maintaining production, producing less gas, and reducing gas injection requirements for this pressure maintained reservoir."
Since beginning the horizontal well program in the 26R Miocene Stevens pool 4 years ago, DOE/Bechtel has completed seven horizontal wells that have produced more than 6 million bbl of oil and 10.3 bcf of gas.
OTHER MEASURES
Hogan also cited injection of gas into shallow oil zones as an example of imagineering.
Gas injection has boosted production in a pilot area to 2,500 b/d from 1,500 b/d.
When implemented field-wide, the gas injection program is expected to boost the shallow reservoir's overall production to 20,000 bid from about 13,000 b/d.
DOE/Bechtel is applying the same TQM approach to environmental concerns.
"We're making major contributions to cleaner air in Kern County by reducing gas and exhaust emissions at the field and implementing a van pool program that now has more than 500 riders," Hogan said.
"We're helping to commercialize alternative fuels by using compressed natural gas in our pickups at the field and the vans in our van pool. And, as with our cogeneration plant, we use gas produced at Elk Hills to provide this fuel."
Hogan noted the government's profit on the Elk Hills operation for the fiscal year ended Sept. 30 was $240 million on revenues of $385 million.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
