COGNAC REDEVELOPMENT PAYS OFF

Shell Offshore Inc. has disclosed more details about its Cognac field redevelopment in the Gulf of Mexico.

Following completion of the redevelopment program on Mississippi Canyon Block 194 late in 1991, Shell said Cognac production averaged 27,000 b/d of oil and 53 MMcfd of gas (OGJ, Nov. 25, 1991, p. 30).

Shell began Cognac producing in 1979 while still drilling development wells from the field's platform. Permanent production equipment was installed in 1982, and production peaked in 1983 at 83,000 b/d of oil and 128 MMcfd of gas.

When Shell shut in the platform in mid-1989 to begin redevelopment, Cognac was producing an average of 12,000 b/d of oil and 45 MMcfd of gas. Cumulative production at the time was 120 million bbl of oil and 220 bcf of gas.

The $80 million redevelopment program included drilling 20 wells into new reservoirs. Sixty-one wells were drilled during primary development.

During redevelopment, Shell confirmed the existence of several new reservoirs, significantly increasing its estimate of Block 194 reserves and prompting consideration of plans to install a second platform in the field.

Shell said the redevelopment program has extended by several decades the productive life of a field that otherwise might have reached its economic limit in as few as 10 years.

IMPROVED UNDERSTANDING

Shell credits the success of Cognac's redevelopment to integration of geophysical, geological, petrophysical, and production data.

The presence of additional undeveloped reservoirs was predicted some time ago by Shell geologists. Cognac redevelopment was attractive economically because of the infrastructure in place.

As production data accumulated, geological interpretations of the field grew more complex. It became apparent that more wells would be needed to deplete Cognac reserves.

Shell began planning redevelopment in 1985. Before deciding on redevelopment plans, the Shell America seismic vessel collected 3-D data.

Combined with production data, the new, high quality seismic data:

Revealed many stratigraphic or structural discontinuities that prevented proper drainage of reservoirs.
Helped locate additional faults, improving Shell's understanding of Cognac's fault block system.

The precision of the 3-D data allowed Shell to drill extremely close to the new found faults and tap reserves missed by earlier Cognac wells.

DRILLING DETAILS

Shell used a two rig drilling program to complete Cognac's 20 well redevelopment on schedule.

The new wells were drilled through platform slots reclaimed from wells that had become marginally economic because of declining production. Shell had to strengthen Platform Cognac before redevelopment drilling could begin.

All the new wellbores are directional holes, with some at angles of 90%.

Shell pulled tubing and casing and plugged each marginal well. Only surface casing was left in place, typically set to depths of about 3,500 ft.

Some reused surface casing was set in less than optimum positions for redevelopment wells, limiting reach circles to about 7,500 ft.

Shell completed redevelopment drilling in December 1990, and in March 1991 resumed production from 30 original Cognac wells and five redevelopment wells. The 15 other redevelopment wells were on stream by yearend 1991.

EARLY DEVELOPMENT

Preliminary work on Cognac began officially at the Gulf of Mexico federal lease sale in New Orleans in 1974 when Shell and several other companies offered $214.3 million for three deepwater tracts in the Mississippi Canyon area.

But before the sale, based on seismic amplitude and wave form analyses, Shell had postulated the presence of oil and gas in the area. At the same time, Shell engineers conceived the idea of developing the acreage with a three piece platform jacket.

Soon after acquiring the first three tracts, Shell began exploratory drilling. Twelve exploratory wells indicated producible oil and gas in eight sands at 4,500-9,800 ft. Shell estimated reserves at 100 million bbl of oil and 500 bcf of gas.

In 1977, Shell and partners added a fourth adjacent tract, and in 1978 the field was unitized on Mississippi Canyon Blocks 150, 151, 194, and 195. operator Shell owns 34.9% interest. It has eight working interest partners.

Prior to redevelopment, Shell and partners had spent almost $800 million on Cognac, including about $265 million for the platform.

WORLD CLASS PROJECT

When it installed Platform Cognac in 1978, Shell set several petroleum industry world records for offshore development, including:

Deepest water platform, at 1,025 ft.
Heaviest steel platform, 59,000 tons.
Most well slots on a platform, 62.

Platform Cognac also was the world's first three piece offshore platform. Shell said its installation marked the first time an underwater hammer was used to drive piles needed to pin the structure to the ocean floor.

In 1988, Shell's Platform Bullwinkle in 1,353 ft of water on Green Canyon Block 65 claimed the water depth record for platforms. Shell expects to eclipse that mark in 1993 when it installs the Auger tension leg platform in 2,860 ft of water on Garden Banks Block 426. Auger will be Shell's first production platform in water deeper than 1,500 ft.