By Derek Mathieson, WellDynamics
Earlier this year, WellDynamics celebrated the ten-year anniversary of the installation of the world’s first intelligent completion system. The result of a joint industry project, SmartWell technology in 1997 could have been just another start-up technology – innovative, untested and possibly infeasible from a commercial perspective. A decade later, however, the SmartWell record reflects a history of industry acceptance, having weathered hurdles that have stopped other start-up technologies, and sometimes start-up companies, in their tracks.
How was 1997’s fledging technology able to “cross the chasm” from the realm of research and development to full-scale commercialization? And what will prepare the technology for sustained growth into larger markets?
THE FIRST WELLS
In the early 1990s, the well engineering sector was faced with intimidating technical challenges. Production in the first generation of subsea wells was beginning to decline, and operators were looking for ways to restore rates. New deepwater subsea wells, while lucrative, also guaranteed an extremely expensive price tag if intervention were required. In addition, advances in drilling technology provided the foundation for new, more complex wells — horizontals, multilaterals and long reach – that required a completely new approach to completion methods.
The collective weight of these factors drove the establishment of a joint industry project whose goal was to develop a method of remotely monitoring and controlling different reservoir layers from one parent wellbore — without intervention. The culmination of that project was the installation of the Surface Controlled Reservoir Analysis and Management System (SCRAMS) in the Norwegian North Sea in 1997 – the world’s first intelligent well.
As with any new technology, this successful implementation served as the springboard for many larger ideas: optimizing production, improving ultimate recovery, reducing unit technical cost (more wells in one). These ideas were the focus of operating companies over the next five years as they wrestled with defining robust business cases for how intelligent completion technology would – and could – be used. In the process, they built large collections of ideas, many of which are setting the tone for today’s marketplace and driving current development activities.
Those ideas also spawned the range of integrated electrical or electro-hydraulic systems that represented the first generation of intelligent wells. Unfortunately, the practicalities of installing completions that had many sophisticated active components — electronics and valves would be required to work for as long as 20 years — proved discouraging. Early field failure rates were high and threatened to halt the technology’s growth before it even got off the ground.
Given the infant mortality rate of the technology, proving reliability became a critical factor in sustaining momentum and led to the introduction of reliability engineering practices into the oilfield services development community. These practices, more common to military and aerospace companies, quickly became part of the framework for growth of intelligent completion technology. Engineering development programs were scrutinized by failure modes and effects and criticality analyses (FMECAs), testing programs became accelerated life tests, and pass/fail criteria were replaced by statistical expectations of survival under rated conditions.
Seven years of sustained effort, from 1997 to 2004, resulted in a 20% growth in five-year mission reliability, to over 98%. These high success rates over the last three years, as illustrated in the graph on the facing page, have contributed in large part to driving significant growth in the marketplace, as end-users are more comfortable that the investments they are making in well completion technology will pay back over the life of the asset.
SmartWell technology “crossed the chasm” into the mainstream in 2004, as many national oil companies and independents began to deploy the technology on a larger scale. Over the past three years, both the number and diversity of applications across the globe have increased, with technologies such as Maximum Reservoir Contact wells (tri- and quad- multilaterals with monitoring and control at each junction) in Saudi Arabia, snake wells (long, meandering wells that connect multiple targets in thin oil rims) in Brunei, and high-rate deepwater injectors all coming into play.
Today, with questions of reliability no longer in the spotlight, SmartWell technology is poised to sustain long-term presence in a larger market. As is the case with other evolving technologies, however, several critical factors will determine a successful transition, including:
• Maintaining product quality. Maintaining a high level of product quality is perhaps the most critical ingredient in sustaining a long presence in a wider market. SmartWell technology is perhaps three years into widespread application and so far doing well.
• Being where your customers need you to be. This means a combination of being able to handle more installations in many countries and to provide support service to help end-users integrate the technology into their own workflows.
• Balancing customization with product bundling and commodity pricing pressure. Customers are looking for the best well solutions available – not just the latest technology. Meeting this demand means being able to provide (often with other parties) more holistic completion solutions, often with some degree of customization of products, and often competitively tendered.
THE ROAD AHEAD
One of WellDynamics’ development themes is “plotting the path to better wells.” It combines technical and operational objectives geared toward continually increasing the efficiency of the required well functions (technology) while decreasing the risk of implementing those functions (operations). Initiatives include reducing the number of umbilicals needed in the well, improving the differential pressure capability of primary seals, and improving the debris tolerance of new equipment, in addition to opening the first dedicated SmartWell training center, and developing programs to create a much broader understanding of this new genre of operations techniques and how they should be applied.
We also expect that more field integration and maturing automation will fuel further technology growth, particularly in reservoir monitoring. In general, the majority of modern sensors detect a condition change in the wellbore, such as pressure or flow after it has occurred; adjustments are made using intelligent well equipment once the details of the condition have been transmitted.
At a high level, this describes a “feed-back control” philosophy. Anticipated technology developments will enable “feed-forward control,” where permanently installed well sensors, such as seismic, electromagnetic or gravity, detect far-field changes in the reservoir and recommend setpoint adjustments to optimize events that may occur many months in the future. This is a major change in current operating philosophy for intelligent wells that requires a continuous trade-off between production optimization today and ultimate recovery tomorrow. The decision workflow isn’t there yet, but it is certainly one of the challenges that the Digital Oilfield has in its sights.
At 10 years, WellDynamics is fast approaching the 300-well tally for the SmartWell flow control product range. The number of case studies and use-cases are increasing dramatically as the technology is applied in more fields around the world. And although we have come a long way in 10 years, I suspect we have only begun on the path that will define the long-term place of the intelligent well in the oil sector.
Derek Mathieson is president and CEO of WellDynamics.