KOC increases rig fleet, prepares for future

Santa Fe Rig 5, on location in the Al-Abdai field of northern Kuwait, has drilled 34 wells since 1991. Its rated depth is 25,000 ft and, its mast is capable of handling hook loads up to 1.5 million lb. The rig can be moved mast up, saving several days during rig moves (OGJ, June 22, p. 45).

Increased drilling activities comprise a key element of Kuwait's long-term strategy to add 16 billion bbl of new oil reserves and increase production to 3.5 billion b/d by 2010.

In 1997, Kuwait Oil Co. (KOC) began expanding its rig fleet to meet the following objectives:

• Increase development and exploration in Kuwait's northern oil fields.
• Increase development and exploration work in western Kuwait
• Increase development and exploration in the Partitioned Neutral Zone (PNZ).

By developing Kuwait's hydrocarbon potential in other areas, KOC will be able to decrease production from the Greater Burgan complex of fields, allowing the Burgan to serve as a swing producer to meet sudden surges in demand or compensate for problems in other fields.

Expanding rig fleet

Until May of last year, only six rigs were operating in Kuwait and the Partitioned Neutral Zone (PNZ). At that time, Saudi Arabian Texaco (SAT) and KOC began expanding its rig fleet when Santa Fe International Inc. brought in two highly mobile desert rigs (OGJ, June 22, p. 45), one in May and the other in August 1997, to aid in the development and exploration activities within the PNZ ( Table 1 [102,889 bytes]).

Concurrently, KOC accepted a tender for 4 more rigs from Admasco, a Middle East contractor based out of Abu Dhabi. Admasco's first rig began drilling last April in Kuwait while the second is preparing to spud in early July. Within the next year or two, a total of 12 rigs should be operating in the region.

Over the past 8 years, the Kuwait rig fleet has fluctuated between 5 and 19 rigs. Prior to the Iraqi invasion in August 1990, KOC operated 10 rigs in Kuwait and the PNZ.

However, the entire fleet was lost during the war and Santa Fe, at that time 100% owned by Kuwait Petroleum Corp., was called upon to assist in Kuwait's reconstruction. After liberation in 1991, a capital investment program of $138 million allowed KOC and Santa Fe to immediately dispatch components for 10 rigs into the country.

Nine more rigs soon followed, predominantly for post-cap well work and reconstruction of the damaged wells (OGJ, Mar. 15, 1993, p. 45). "After this work was completed, the need for drilling rigs declined since the downstream infrastructure was still damaged and it couldn't take on the full production that was available," Gary Bauer, general manager for Santa Fe, said.

Thus, KOC slowly reduced its rig fleet from 19 rigs until by the mid-1990s only 5 were operating. From the end of the war to Dec. 31, 1997, 386 wells have been drilled in Kuwait (Table 2 [66,434 bytes]). Santa Fe estimates they will drill 35-40 wells for KOC during 1998, excluding the PNZ.

Santa Fe has emerged as the Middle East's leading drilling contractor, holding 22% of the market share with 21 rigs drilling in the Arabian Gulf states. Operations are currently conducted in Kuwait, Saudi Arabia, Qatar, and Oman.

However, special demands are placed on Santa Fe Kuwait because it serves as a center for rig and camp construction. In 1997 alone, Santa Fe added six more rigs to its Middle East fleet: three in Saudi Arabia, two in Kuwait, and one in Oman.

Four of these rigs, including their base camps, were upgraded in the company's Al-Ahmadi yard while Santa Fe maintained its normal drilling operations. "For awhile we were almost as busy as we were following the liberation of Kuwait," Bauer said.

Exploration

KOC plans to implement an aggressive exploratory drilling program pending the final interpretation of a $133 million, country-wide surveying project including 2D and 3D coverage. The 3D seismic, contracted to Geco-Prakla, a division of Schlumberger, will be used to further delineate known fields over an area of about 4,000 sq km.

The 2D seismic, contracted to Western Geophysical, a division of Western Atlas Inc., will cover the remainder of the country, including coastal areas and shallow waters in search of new exploratory prospects. The 2D land project, totaling about 10,000 linear km, was obtained in the form of 5 x 5 km grids.

The additional transition-zone survey will total about 1,600 linear km. The project started in January 1996 with two crews, and is still ongoing with one remaining crew. In addition to the 2D survey, Western Geophysical has conducted initial tests using 4D seismic (time lapse) technologies.

Kra' Al-Maru

Although an increase in exploratory activity awaits final seismic interpretation, work continues in one of Kuwait's most promising prospects located in the western desert. Based on combined seismic data and well information from the field's discovery well, KOC estimates there are 300-350 million bbl of oil reserves in the Kra' Al-Maru field, located about 70 km west of Kuwait City ( Fig. 1 [241,855 bytes]).

In October 1995, The KM-1 wildcat tested 900-950 b/d of 48.5° API (sweet) oil and 2.6 MMcfd of gas from the Ratawi, Najmah, and Sargelu formations at about 15,000 ft (Fig. 2 [68,557 bytes]). KOC began drilling this well prior to the Iraqi invasion and made it as deep as 8,500 ft, before the crews abandoned the location.

During the occupation, Iraqi troops used the rig site as a command post. Allied forces eventually destroyed the rig by bombing the A-legs, toppling the derrick over backwards with more the 8,000 ft of pipe in the derrick. Fortunately, KOC was able to reenter the well and reach a total depth of 20,774 ft.

KOC is currently drilling a step out that spudded-in last January. The KM-2, located 2 km southwest of the KM-1, is expected to reach TD at about 15,100 ft. KOC granted Exxon Corp. the authority to manage the drilling operation using Santa Fe's Rig 155, a super-deep rig capable of drilling to 30,000 ft.

Unfortunately, the KM-2 encountered drilling problems, resulting in a plugging operation last May. Sidetrack options were evaluated. KOC estimates 2-3 months before the well reaches TD.

Although Exxon has no direct ownership in the well, this is the first time that KOC has handed over full drilling responsibilities to a major oil company since the 1970s. This also may be a sign that Kuwait is further contemplating foreign-equity participation in its upstream activities (OGJ, Mar. 16, p. 27).

KOC signed an agreement with Exxon in 1996 to evaluate the hydrocarbon potential of the Kra' Al-Maru field using test data from the exploratory well, older 2D seismic, and more recently run 3D seismic data.

At present, the Kra' Al-Maru field has no infrastructure leading to any of Kuwait's gathering centers. However, if the field's production potential is verified, temporary facilities will be installed to transport crude to processing centers.

A need for natural gas

In July 1977, Parker Drilling Co. drilled KOC's first wildcat targeting gas in the Permian Khuff at about 16,000 ft (OGJ, June 26, 1978, p. 116). Unfortunately, this well, located in the Burgan structure, failed to find commercial quantities of gas, and subsequent wells to date have also come up dry. The Khuff formation extends east and south into Saudi Arabia where it produces gas.

In Kuwait, all natural gas production is directly associated with crude oil production. If oil production is curtailed, as it was when Kuwait voluntarily cut production last March, natural gas production declines accordingly. Variations in production affect both the commercial and industrial sectors of the economy.

If KOC can find additional, nonassociated reserves of gas, the country's upstream businesses will benefit. For instance, Kuwait National Petroleum Co. (KNPC) would have greater versatility in supplying the ministries of electricity and water with gas, oil, and heavy fuel for local power plants.

Also, its marketing function would benefit. KNPC suffers a lost opportunity cost when it is forced to use heavy fuel oil in-country instead of selling it on the open market. A new source of gas would provide KNPC with the additional flexibility to alter its crude-oil sales, thereby enhancing profits.

Kuwait's Petrochemical Industries Co. would benefit by obtaining a steady supply of natural gas used in its growing petrochemical industry. Now that the Equate petrochemical plant is on line, a growing proportion of the country's limited natural gas resources will probably be diverted from the power plants and used as feedstock for high-value polyethylene and ethylene glycol products. This will further decrease the supply of heavy fuel oil for export.

Fortunately, Kuwait's northern oil fields have higher gas-oil ratios than the Burgan complex. Natural-gas production should increase as KOC ramps up production in the Raudhatain, Abdali, and Sabriya fields.

According to Abdul Hussain Shehab, manager of drilling operations, KOC plans to drill another exploratory well in the Raudhatain field, probably within the next 6 months. This well will target the Najmah and Khuff formations.

Drilling in the Jurassic

Prior to the late 1970s, oil development was limited to Cretaceous and Tertiary formations. However, during the late 1970s, KOC began searching, with success, for oil in the Jurassic Najma, Sargelu, and Marrat formations.

Much of the deep Jurassic drilling activity occurred in the Abduliyah, Magwa, Minagish, and Umm Gudair fields. In the 1980s, a 10-well exploration program was implemented in these fields and others, resulting in steady improvements in KOC's drilling practices.

In Kuwait, the top of the Jurassic begins a sequence of increasing formation pressures. According to Adel Al-Sarraf of KOC, during the SPE/IADC Middle East Drilling Technology Conference last November, adverse geologic conditions have proved to be a challenge for drilling these deep, high-pressured wells.

Al-Sarraf said well construction must take into account geological environments where there are:

• Repeatable occurrences of highly fractured thief zones
• Cases when formation pressure is nearly equal to fracture strength
• Pressure reversals
• Signs of H₂S.

The Cretaceous and Tertiary sequences, normally pressured, consist of sands, shales, limestones, and anhydrite (Fig. 2). The shale intervals are highly reactive, requiring inhibitive drilling fluids to prevent hydration and sloughing. The limestone intervals have varying degrees of fracturing with lost-circulation zones occurring in the more intensely fractured zones. The worst lost-circulation zones occur within the shallow Dammam and the Cretaceous Shuaiba formations. ¹

The Jurassic sequences consist of fractured, oolitic limestones, salts, anhydrites, grainstones, and shales. Al-Sarraf said pressures vary from 11 to 19 ppg over intervals that are 2,300-3,100 ft thick.

Because of the difficulties overcoming lost-circulation zones in the Cretaceous formations, in addition to dealing with overpressured Jurassic beds, KOC typically runs six casing strings followed by a liner at TD. In a normal program, drillers run 30-in. casing at the surface and set either a 73/4-in. casing string or 51/2-in. liner at TD (Table 1).

Learning results

Al-Sarraf said the use of PDC bits and intimate knowledge of formations allowed KOC engineers to fine-tune drilling parameters and optimize bit selection. Well-construction design addressed operational problems, including lost circulation and water shortages. He explained that KOC engineers design their wells so that formations with common pore pressures are placed together.

In addition, they placed lost-circulation zones behind pipe as soon as possible so as not to impede subsequent drilling operations. Limiting the amount of open hole below the lost-circulation zones reduces drilling costs while increasing cycle time. Thus, operations are not delayed through time-consuming activities like pumping lost circulation pills and setting cement plugs.

A thorough knowledge of stratigraphy and sedimentology plays an important role in well construction. In many cases it becomes necessary to drill ahead "blind" (drilling without returns) until the next casing point is reached; otherwise, it becomes necessary to run additional strings. These design considerations have cut 58-77% off the time formerly needed to drill deep Jurassic wells in the Magwa, Abduliyah, Minagish, and Umm Gudair fields.¹

Well construction

A normal Jurassic drilling program varies from field to field, with casing strings ideally set as follows ( Table 3 [97,642 bytes]):

1. Drill the top section with a 36-in. bit and set 30-in. surface casing at the top of the Dammam formation. This string covers all fresh water sands.
2. Drill to the top of the Rus or Sadi formation with a 26-in. bit and set 24-in. casing. This string covers the shallow lost-circulation zones.
3. Drill to the top of the Zubair formation with a 22-in. bit and set 185/8-in. casing. This string serves to cover the productive Cretaceous formations while also isolating the Shuaiba lost circulation zone.
4. Drill to the top of the Hith formation with a 17-in. bit and set 133/8-in. casing. This string covers the Ratawi limestone and Mingaish oolite and provides a good shoe prior to entering the high-pressure" Jurassic.
5. Drill to the base of the Gotnia formation with a 121/4-in. bit and set 103/4-in. casing. Bauer said high mud weights, often in excess of 19.5 ppg, are needed in this interval to control pore pressures and minimize H₂S entry into the well bore.
6. Drill to the top of the Marrat formation with a 91/4-in. bit and set either 73/4 or 75/8-in. casing. The fractured Najmah formation, which underlies the Gotnia and overlies the Sargelu formations, cannot tolerate a high overbalance. Thus, it becomes necessary to reduce the mud weight through this interval. The presence of fractures in the Najmah formation determines whether the final casing strings will be set early.¹ The absence of fractures allows the well to be drilled with lower mud weights.
7. Drill to TD (base of the Marrat) with a 61/2-in. bit and run a 51/2-in. liner.

Partitioned Neutral Zone

Another area that plays an important part in Kuwait's drilling plans is the PNZ, an area subdivided into three portions: the onshore Kuwaiti and Saudi Arabian zones, and an offshore zone ( Fig. 3 [50,095 bytes]). The PNZ was established between the Kingdom of Saudi Arabia and the State of Kuwait in 1929.

Production from the PNZ, averaging 290,000 b/d in May, is shared equally between the two countries where onshore upstream activities are conducted through joint operations between SAT and KOC. Most of the production comes from three fields: South Umm Gudair, Wafra, and South Fuwaris.

Kuwait and Saudi Arabia plan to raise oil production to 420,000 b/d by 2005. George Sandison, president of SAT, said production of 300,000 b/d should be attainable by early 1999 (Table 4 [39,712 bytes]).

Currently, there are two rigs in operation. In 1997, about 42 wells were drilled in the PNZ and SAT expects that 73 wells will be drilled in 1998.

In August 1997, the first well of a 52-well program was spudded in the Wafra field. This initiated the third-phase of a development program designed to add 30,000 b/d of oil to existing production. The program is intended to increase recovery through continued development and increased density spacing targeting highly compartmentalized sand reservoirs. Phase III follows up on a 13-well program (Phase II) that was initiated in November 1995.

In addition, an Eocene drilling program will begin October 1998. These wells take 3-4 days to drill, and SAT expects to drill some 84 of these wells in all, 14 of which should be completed in 1998.

PNZ exploration

SAT and KOC, through their joint operations group, are involved in a three-well, rank wildcat drilling campaign. These wells are located near the southern end of the PNZ. Exploration in 1999 will target areas in both the southern and central regions of the PNZ and may include up to four wells.

In a northeastern extension of the Wafra field, SAT discovered new oil reserves during an eight-well development program last year. Wells EW-11 and EW-12 each encountered over 100 ft of oil pay and were producing at rates of 7,700 and 5,400 b/d in October 1997, respectively.

On Apr. 22 of this year, the German Press Agency (Deutsche Presse-Agentur) reported a new discovery of "the highest quality crude yet to be discovered in the onshore" portion of the PNZ. The author has confirmed through other knowledgeable sources a crude quality of 31-26° API.

Currently, the PNZ produces two types of heavy, lower-grade sour crudes:

1. Ratawi-Burgan mix-24.5° API
2. Eocene-18.5° API.

The Arq 2 well, located in the Saudi Arabian portion of the PNZ, was discovered using 2D seismic. It was reported that this well is producing 3,000 b/d from the Wara formation and 1,000 b/d from the Ratawi from depths between 3,000 and 7,000 ft.

A reliable industry source said that several zones were tested, with rates ranging from 600 to 3,000 b/d. The industry source indicates that the areal extent appears limited, and further drilling and testing will have to be conducted to determine commerciality.

Currently, a joint seismic program is in progress which will be followed by a drilling program at Wafra, South Umm Gudair, and South Fuwaris field.

The Japanese Arabian Oil Co., the operator of the Hout and Al-Khafji fields in the offshore portion of the PNZ, is in the process of renegotiating its concession agreements with Kuwait and Saudi Arabia. The Saudi concession expires in 2000 and the Kuwaiti in 2003.

AOC, Japan's largest oil producer, obtained drilling rights to the PNZ in 1957. About 70% of the PNZ's oil production is exported to Japan. Al-Khafji crude accounts for 5% of Japan's total oil imports.

Although the Al-Khafji project is considered a symbol of friendship between the two countries, Saudi Arabia has implied it may not extend drilling rights unless more Japanese private companies invest in the kingdom. (OGJ, Nov. 3, 1997, p. 4). This has affected AOC's short-term drilling plans.

Saudi Arabia may also allow U.S. and European oil companies to participate in the Khafji offshore concession sometime in the future (OGJ, Dec. 8, 1997, p. 4).

Reference

1. Al-Sarraf, A., Hazel, R.A., "The Drilling Optimization Performance in Kuwait's High Pressured Wells," SPE/IADC paper 39270, presented at the SPE/IADC Middle East Drilling Technology Conference, Manama, Nov. 23-25, 1997.

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