Europe

Archer Oiltools has been awarded a plug and abandonment (P&A) campaign by Wintershall Noordzee B.V across 2021 and 2022. The scope awarded to Archer is to perforate, wash, and provide cement and formation integrity testing tools, services, downhole tools on tubing conveyed, and plugs-cutters for 22 wells with an option of another 20 wells.

Hugo Idsøe, Vice President of Archer Oiltools, commented, “Over the last decade Archer has delivered a high number of P&A and Slot recovery operations to our customers in the North Sea with great success. This contract is a milestone for the southern part of the North Sea and a testimonial of all the good work that we have done for Wintershall Noordzee B.V. over the last three years.”

“Our team have delivered excellent performance and we continue to prove that Archer’s Oiltools is an industry leader for smart and robust solutions in markets where well integrity, reliability and time savings are of upmost importance.”

“With a broad portfolio of products and services within P&A and Slot Recovery, Archer is in a unique position to deliver lower carbon solutions to our clients. Through our development of new technologies and solutions, we are rapidly adapting to and embracing the sustainability focus on lower emissions,” Idsøe added.

Archer has been carving a formidable presence for itself in the North Sea in recent months with this announcement coming soon after its acquisition of DeepWell, a leading Norwegian well intervention company focused on high-tech based wireline service. DeepWell commands one of the most modern wireline unit fleets on the Northern Continental Shelf and holds a strategic long-term contract in the light well intervention market, making a fine addition to Archer’s portfolio. It is therefore no surprise that the company was awarded another contract by Wintershall Noordzee B.V. and it is highly likely more work will be coming its way in the future.

Serica Energy plc, a British independent upstream oil and gas company with operations centred on the UK North Sea and gas accounting for over 80% of its production, has encountered difficulties in the drilling of the Columbus development well, located in the North Sea, 35km north-east of the Shearwater production facilities.

The Columbus development well was spudded in mid-March and drilled, as planned, to a total measured depth of 17,600ft by the Maersk Resilient heavy duty jack up rig. A 5,900ft horizontal section was drilled through the reservoir formations of the upper forties and encountered a sequence of sands and shales, in line with pre-drill expectations. The well required sand screens to be installed to prevent fine particles being produced and difficulties were encountered while running the screens so that it was ultimately not possible to install them.

As a result, the reservoir section of the well will be side-tracked and re-drilled, using data collected during initial drilling to optimise its trajectory and avoid the difficulties encountered running the screens in the original well. The additional operations are expected to take around 3-4 weeks at a net cost to Serica of around UK£3mn.

While this has raised the expense of the operation, these recent developments are not expected to affect the timing of production start-up, which is still projected during Q4 2021. Serica stated that further updates will be provided on each project when flow test data is available.

Mitch Flegg, Chief Executive of Serica Energy, commented, “Whilst frustrating, the additional operations on Columbus are not expected to affect the timing of first production, and the economic returns of the project remain very attractive for the company.”

A recent Competent Person’s Report estimates the Columbus gross undeveloped 2P reserves to be in excess of 14 million boe and, once production begins, the average gross production forecast is projected to be around 7,000 boe per day, of which over 70% is gas.

Rhum 3 update

Serica also provided an update on the R3 Intervention Project, situated on the Rhum field, which commenced in October. The company stated that the R3 well has now been cleared of all equipment installed when it was originally completed in 2005. Reservoir access has been regained, thus allowing new completion equipment to be run in preparation for production.

The new completion is currently being installed prior to performing a flow test on the well, which is expected to be carried out in June. A diving support vessel has been contracted to install the subsea control equipment required so the well can start producing in Q3 2021.

Following an offer letter signed in April 2021, Archer has announced that it has signed a sales and purchase agreement (SPA) to acquire DeepWell for NOK177mn on a debt and cash free basis which will be financed using existing cash and liquidity reserves.

DeepWell is a leading Norwegian well intervention company which provides wireline and downhole services to oil companies on the Norwegian Continental Shelf (NCS). The company currently employs approximately 200 people and, across 2020, had a revenue of around NOK360mn.

The acquisition of DeepWell, which commands one of the most modern wireline unit fleets on the NCS and holds a strategic long-term contract in the light well intervention market, will greatly enhance Archer’s well intervention service offerings in the North Sea.

Lage Nordby, Vice-President of Wireline at Archer, commented, "We are pleased to welcome DeepWell’s team of employees to Archer. By strengthening our wireline equipment fleet and organisation, increasing our low emission solutions, and continuing our track record for service quality, Archer is well positioned on the Norwegian Continental Shelf. The acquisition of DeepWell gives us access to equipment and employees needed in order to fulfill our obligations under our recently awarded wireline contracts with Equinor and ConocoPhillips."

Jan Erik Rugland, COO of Moreld AS and CoB of Deepwell, said, "We are pleased to have reached an agreement with Archer securing continued operations on existing contracts and the continued development of DeepWell’s state of the art wireline technology. I want to thank all the employees, both on- and offshore, for their dedication and perfection. This transaction is in line with our strategy to divest capital intensive businesses in order to focus our energy on transition and growth plans."

The closing of the transaction is expected to be finalised during Q2 2021 and is subject to customary closing conditions and regulatory approvals.

Aker BP was the first operator worldwide to use bismuth alloy to plug the top section of old oil wells. Since then, the technology is now used on 30 wells on the Valhall field, resulting in safer, permanent well plugging.

The Valhall field

The Valhall field in the southern part of the North Sea has produced over a billion barrels of oil equivalent since it began production. To ensure consistent performance, old oil wells must be plugged to make room for new wells in the hopes that over the next 40 years another one billion barrels of oil will be drawn up.

Martin Knut Straume, Aker BP’s Chief Engineer for Plugging and Abandonment, commented, “We’ll continue to work on Valhall for many decades to come. That means we have to make sure that we shut down and abandon old wells safely, so that it is safe for us to be there when we continue to produce and drill new wells at the same time. We use the best available technology, and in this case, in the top part of the old wells, that means bismuth.”

Aker BP has already started removing the old field centre on Valhall with the living quarters platform removed in 2019. Another two installations will disappear over the next five years and all wells connected to the old drilling platform will be permanently plugged over the course of 2021.

Egil Thorstensen, Senior Engineer for Plugging and Abandonment at Aker BP, said, “We’re currently installing bismuth plugs in the top section of all the wells; in other words, in the 30-inch casing. That’s the last thing we do before we cut and pull the pipes from the seabed to the platform, and the well is permanently abandoned.”

Diverse solutions provided by new technology

Plugging wells on Valhall may pose an additional challenge both due to gas migration to the surface, and due to subsidence and compaction. The seabed around the Valhall field has sunk seven metres since the early 1980s, and the top of the reservoir has dropped about 15 metres.

This means that cement, which is commonly used as a barrier material to plug wells, is an inadequate solution as it can fail when subjected to wellbore or casing stresses resulting from subsidence and compaction events. In the worst case, hydrocarbons in old wells could migrate upwards and potentially leak into the sea.

“Aker BP installed a trial plug over two years ago, and was the first operator worldwide to use bismuth alloy in the top section of the well. When we use this technology, we make sure that the plug is 100% impermeable. Gas cannot leak to the surface,” said Thorstensen.

Bismuth is a metal with unique properties that make it particularly well-suited for applications in P&A operations. As a solid metal, it is completely impermeable and is heavy as lead, making it less prone to contamination during its placement into the well. When melted, liquid bismuth flows like water, giving it the ability to flow into the smallest interstices in the well. When bismuth solidifies, it expands, which helps provide permanent sealing capability inside a wellbore.

Additionally, unlike cement plugs which need to be several dozens of metres in length in order to qualify as barrier, a 2.5 metre-long bismuth plug suffices to provide long term isolation in the well.

Reducing environmental impact

Bismuth alloy is typically a more expensive option than cement but total costs of plugging the top well sections are less due to decreased rig time for these operations.

“Even so, we have chosen to use it on Valhall because of the unique field conditions. For us, this is a matter of making sure that we minimise the carbon footprint from our operations, while ensuring that the wells are plugged and abandoned to the highest standard. Bismuth has what cement lacks: it changes almost instantaneously from liquid to solid when the heating source is removed, it is completely impermeable, and it is not affected by contamination issues,” commented lead technical engineer at Aker BP, Laurent Delabroy.

During the autumn of 2020 and winter this year, bismuth plugs were installed continuously from the Maersk Invincible rig on the Valhall field centre. The plugs are up to 2.5 metres long and weigh 9 tonnes. The work has been performed through the jack-up rig alliance between Aker BP, Maersk Drilling and Halliburton. Time spent per well was cut in half to a record-low 30 hours this winter which has resulted in significant cost savings and freed up several months of rig time that can now be used for new operations.

Delabroy concluded, “We succeeded through strong teamwork and close collaboration with our solid technology partner, BiSN. And last but not least, because we are part of a company that dares to use new technology. Aker BP is not only the first in the world to develop and perform this type of operation, we are now the world’s largest users of this technology, and many other oil and gas operators are following suit. That says something about our company.”

Archer Limited has signed an offer letter with Moreld laying out principle terms to purchase 100% of the shares in DeepWell AS (DeepWell).

DeepWell is a leading Norwegian well intervention company established in 2004 that is focused on mechanical wireline and cased hole logging services. Headquartered in Avaldsnes, Norway, DeepWell had approximately 200 employees and a revenue of NOK355mn in 2020.

Starting from 1 May 2021, Archer will also take over the Equinor wireline services scope from DeepWell, which was awarded in 2018. The light well intervention services for Equinor were to be completed by the AKOFS Seafarer together with Welltec, and included the provision of all wireline and basic logging services, together with operational support and crews.

Archer's CEO, Dag Skindlo, commented, “An acquisition of DeepWell would secure Archer’s access to a modern fleet of electric wireline units, as well as enable participation in the vessel-based light well intervention market. Strengthening our equipment fleet, broadening our low carbon/low emission solutions and continuing our track record for service quality are all key aspects of our strategy on the NCS. We are impressed by DeepWell’s team and look forward to continuing this process with them.”

The contemplated transaction is subject to due diligence, negotiation of the transaction documentation, closing conditions and regulatory approvals.

Archer’s North Sea expansion

The addition of DeepWell is further evidence of Archer’s formidable performance in the North Sea as it continues to expand operations and offerings in the region. The company continues to pursue new technology and digital solutions for well simulations and remote support in order to enhance efficiency and target reducing their carbon footprint.

Additionally, in April 2021, the company secured a long-term frame agreement with ConocoPhillips for the provision of wireline services on the Norwegian Continental Shelf. According to their release, this makes Archer the largest mechanical intervention company on the Shelf, with an estimated total contract back-log of NOK3.5bn.

Aker BP has completed the plugging of wells at the Valhall oilfield centre six years earlier than originally planned, saving more than NOK5bn.

Aker BP is the operator alongside partner Pandion of the Valhall oilfield which first saw oil flow in 1982. Since then, more than one bnboe have been produced from the area, which is three times more than originally expected.

In 2014, as a result of the decision to pursue a policy of modernisation rather than abandonment, Aker BP began a plugging campaign in order to revamp the field and keep it producing for the foreseeable future. Since that time, a total of 30 oil wells from the original drilling platform have been plugged in order to pursue the ambition of bringing up a further one bnboe from the field over the next forty years.

The first plugging campaign spanned 2014-2016 and was conducted by the Maersk Reacher rig. The next two campaigns, between 2017-2018 and 2020-2021, were carried out by the Maersk Invincible drilling rig, the departure of which last week marks the end of plugging operations for the field.

These campaigns were a roaring success as Aker BP have reported that no serious incidents were incurred during the work and that they were carried out in a total of four years, at a cost of NOK10.1bn, as opposed to original estimations of 10 years and NOK15.5bn.

Tommy Sigmundstad, SVP Drilling and Wells in Aker BP, commented, “The work to plug the wells has been a success through three major campaigns. The plugging has been carried out safely and efficiently. We have an unrelenting focus on improvement, and that has paid off in shorter operation times and reduced costs. Our alliance partner Maersk Drilling has been a key factor in all the campaigns. I am incredibly proud of the work delivered by teams across all companies both offshore and onshore.”

Alongside the plugging operations there has been a number of decommissioning activities carried out and planned. The QP accommodation platform was removed in the summer of 2019 by the catamaran crane vessel, Pioneering Spirit, and over the course of the next few years the original drilling platform and process platform will be removed along with the replacement of the original Hod wellhead platform (south of the Valhall field).

Utilising the latest technology

Wherever possible, Aker BP made use of the latest technology in order to optimise their operations.

Martin Straume, Chief Engineer for Well Plugging and Abandonment at Aker Bp, said, “Section milling of cemented casing has been carried out inside larger casing. We have done this to verify that well barriers are in place on the outside of the conductor. This means that we have avoided having to mill or pull entire sections of casing from the surface and down to the relevant depth. This represents up to several weeks of time saved per well, and is an enormous improvement in the plugging work.”

For the first time ever worldwide, Aker BP along with Halliburton and Maersk Drilling, conducted fully automated cementing operations from land, taking place from Aker BP’s offices in Stavanger. The technology increases efficiency, reduces costs and lowers HSE risk.

In addition, the top section of the old Valhall wells have been plugged using bismuth technology, an innovation conceived by BiSN to solve the challenge of potential methane leaks from old wells, and results in lower CO2 emissions compared with cement.

For the future

At the end of 2019, the first oil flowed from Valhall Flank West. As of March 2021, a new Hod platform is nearing completion at Aker Solutions’ yard in Verdal. The concept, implementation model and organisation for the Hod project were copied from Valhall Flank West. The planned production start for Hod is in Q1 2022, and recoverable reserves are estimated at around 40mnboe. Aker BP has also now embarked upon studies for a new central platform on Valhall, which will ensure production capacity for future volumes in the area.

In an operational and financial update, Hurricane Energy plc, a UK-based oil and gas company, has provided an update on production from its Lancaster field and Early Production System (EPS) and net free cash balances.

The Lancaster (EPS) consists of two wells tied back to the Aoka Mizu floating production storage and offloading (FPSO) vessel, a relatively new system with first oil achieved in June 2019. Hurricane Energy has now reported that between Q4 2020 and Q1 2021, oil production shrank from 1.17mnbbl to 1.01mnbbl, with an average oil rate of decline of 12,700bpd to 11,200bpd.

The company has identified the decline in oil production in 2021 is a result of:

•The decision to reduce production from the 205/21a-6 well (the ‘P6 well’) in November 2020 for reservoir management purposes, which resulted in a reduced rate of increase in water cut
•Natural decline in the period
•A temporary reduction in the production rate in early March 2021, which required an unscheduled well intervention

Hurricane Energy continued by stating that production efficiency during the first quarter of 2021 was 95%, exceeding its planning assumption of 90%. The first quarter outturn compared to a production efficiency of 99% in the fourth quarter of 2020, with the sequential decrease explained by the unplanned well intervention.

As part of the Hurricane Energy’s periodic well testing programme for reservoir management purposes, the Lancaster field is currently producing from both the P6 and 205/21a-7z wells. Immediately prior to the testing programme, the field was producing from the P6 well alone at a rate of c.11,600 bopd on artificial lift via electric submersible pump, with an associated water cut of 28%.

Despite the unscheduled operations, the 21st cargo of Lancaster oil was still lifted on 17 March 2021 with the 22nd cargo already sold and due for lifting between end April and early May 2021. Additionally, despite the drop in production and the impact of Covid-19, Hurricane Energy reported that as of 31 March 2021, it had a net free cash of US$127mn, compared to US$106mn at 31 December 2020.

At Hannover Messe, April 12-16, Bosch Rexroth will present the SVA R2 Subsea Valve Actuator, a disruptive innovation for electrically actuating valves in the subsea process industry.

The SVA R2 is the world’s first electric actuator that can replace conventional hydraulic cylinders with field-proven safety technology and without taking up additional space. The integrated electric controller offers precise motion control and, thanks to condition monitoring and a safety spring, the SVA R2 satisfies Safety Integrity Level (SIL) 3 in accordance with IEC 61508 and IEC 61511.

The actuator minimises energy consumption and is geared toward delicate ecosystems. The functions, operating life and safety of the actuator have already been successfully tested in accordance with international standards and when the SVA R2 is used in subsea factories at a depth of up to 4,000 meters, hydraulic pipes or power units are no longer required. The electric supply pipes which are already installed for sensors are adequate to ensure the reliable operation of the actuators.

Changing the subsea process industry

Up until now, the operators of process systems have mainly relied on hydraulic cylinders in order to open and close subsea valves with a quarter turn and a defined force. With offshore installations, for example for oil and gas production, these cylinders are supplied by a central hydraulic power unit with hydraulic pipes several kilometres in length. This solution uses a great deal of energy in order to compensate for the cumulated losses and it cannot control the movement with precision. To date, plant engineers and operators have still relied on hydraulic cylinders because they are the only components to offer field-proven safety systems with a mechanical spring in a compact design (the electric actuators which are currently available do not have such a safety function as this is not possible given the size and weight requirements). Additionally, approaches designed to ensure safety using subsea batteries cannot guarantee the reliable closing of valves over the required operating life of up to 25 years.

For the agile development of the SVA R2, the Bosch Rexroth team worked closely with a number of suppliers and operators of offshore installations, as well as international universities. The new module comprises a pressure-compensated container that contains an electric drive, a motion control system and a safety device – and can replace the hydraulic cylinders previously used on a 1:1 basis. It requires only one cable for the power supply and communication. The SVA R2 is designed to actuate valves reliably with the power supply that is commonly used for subsea sensors. Switching to compact and safe electric actuators means that hydraulic pipes (several kilometres in length along with the associated power units and controllers) are no longer required.

The Subsea Valve Actuator is designed for high volume production, has proven robustness and reliability and is suitable for applications above and below water such as hydrogen production, CO2 storage and general applications in the oil and gas process industry. This innovative new technology has been nominated for the prestigious Hermes Award and, after its premiere at Hannover Messe in April, the first pilot tests are due to start in the third quarter of 2021 before being offered to Bosch Rexroth’s global client base.