x Abu Dhabi, UAETuesday 23 January 2018

ExxonMobil builds islands in Gulf to drill oil

Oil major looking to use 'extended reach' drilling from four artificial islands.

The production platform at the Sakhalin field in Russia where oil reserves that lay underneath pack-ice were tapped.
The production platform at the Sakhalin field in Russia where oil reserves that lay underneath pack-ice were tapped.

ExxonMobil is to use technology developed in the Russian Arctic to boost output from the giant Upper Zakum oilfield off the coast of Abu Dhabi.

ExxonMobil's plan to use "extended reach" drilling from four artificial islands will allow the total volume of crude recovered from Upper Zakum to reach an exceptionally high 70 per cent of oil in place, while production capacity rises to 750,000 barrels per day (bpd) from about 550,000 bpd. "We didn't come up with the concept of an artificial island," said Andrew Swiger, the senior vice president of ExxonMobil. "That had been thought about by other people.

"But how do you make it work when it's a really big oilfield? How can you minimise the cost and the environmental footprint and ultimately drain the oil in the reservoir?"

The answer lay in the engineering work the company had undertaken on Sakhalin Island, off the Pacific coast of Siberia, to improve the precision and length of the horizontal well bores it could drill to exploit hard-to-reach oil reserves.

ExxonMobil refined its system of drilling land-based wells to access offshore oil earlier this decade when it needed to produce Sakhalin oil from under pack-ice, at the same time causing minimal disturbance to the delicate Arctic environment.

Using high-precision horizontal wells to increase the amount of contact between the well and the oil-bearing zone also makes sense for Upper Zakum, which is a complicated reservoir in which oil is present in a number of thin, fractured rock layers.

ExxonMobil teamed up with the Abu Dhabi National Oil Company (ADNOC) and Japan Oil Development to develop Upper Zakum in 2006 in the biggest concession the emirate has awarded in recent years. The oilfield, containing an estimated 16 billion barrels of reserves, is among the world's largest.

But two years ago, a study of the Upper Zakum reservoir led ExxonMobil to suggest the production capacity expansion might be delayed. Now, with confidence gained from the Russian operation that started pumping oil in 2005, the Abu Dhabi project is moving ahead.

"The progress is as rapid as it has ever been," Mr Swiger said.

The development is a significant part of a large push by the Government and ADNOC to boost the emirate's total crude output capacity by some 700,000 bpd to 3.5 million bpd by 2018.

Mr Swiger said the Government had also set the ambitious 70 per cent recovery target for Upper Zakum, presenting the ExxonMobil with a formidable technical challenge. Recovery factors vary enormously but about 30 per cent is considered average.

ExxonMobil's successful execution of the Upper Zakum project could be crucial in determining the outcome of negotiations to renew the other Abu Dhabi concession in which it is involved, signed in 1939. Under that contract, which is due to expire in 2014, ExxonMobil is part of the consortium that pumps oil from the emirate's onshore fields.

"For the world's energy producers like Abu Dhabi, who commit to innovation and partner with international oil companies to integrate the latest technologies and techniques, the challenge of growing supplies while reducing emissions and other environmental impacts becomes an enormous opportunity … that requires vision, leadership and partnerships," Mr Swiger said yesterday, addressing the Abu Dhabi Petroleum Exhibition and Conference, held every two years in the UAE capital.

In the speech, he highlighted other technology ExxonMobil has developed for carbon capture and storage, and enhanced oil recovery. The company has invested about US$100 million (Dh367.2m) in a process for separating carbon dioxide from natural gas by freezing it, then re-injecting it as a pressurised liquid into the reservoir to push out more oil and gas.

"But perhaps the most underestimated avenue for achieving a high-energy, low-carbon future lies in the area of energy efficiency," Mr Swiger said.

"The contributions of new techniques as well as new technologies to gain greater efficiency underscore the important role international oil companies like ExxonMobil can play in a high-energy, low-carbon future."

That is where Upper Zakum becomes an important testing ground.

ExxonMobil could not be "a leading integrator of innovation" without "strong national oil company partners and supportive host governments, such as those we find here in Abu Dhabi and across the region", Mr Swiger told the conference.