Abstract New Paradigm Engineering Ltd., the Centre For Engineering Research Inc. and a consortium of over 35 oil producers and equipment suppliers have spent the last five years developing and testing a Downhole Oil/Water Separation (DHOWS) process which consists of hydro cyclones and conventional pumping equipment. As of the end of 1996, over 18 field trials have been completed using ESP, PCP and Beam pumping systems and in a wide variety of well configurations and reservoir conditions. In the original prototype ESP application, water reductions of up to 97% were achieved and, generally, water oil ratio (WOR) to surface of two or less is achievable in most applications encountered to date. This paper will provide a brief summary of the field trials completed and the key results achieved, including oil production rate increases, water reduction, predicted increases in economic reserves recovery, and general factors affecting a successful DHOWS application. Also included will be a discussion of some of the challenges which have been overcome and an outline of potential future applications and challenges which will be the driving force behind a wide range of future research, development and field application work. It is anticipated that DHOWS applications will soon change the current paradigms of the industry in relation to what is possible in the area of water management. Introduction As many "oil companies" have begun to recognize, they should really be known as "water companies". The majority of oil wells, especially in the more mature North American fields produce more water than they do oil. In western Canada, the average water oil ratio (WOR) for all the conventional production is at nearly six cubic meters of water per cubic meter of oil. The average WOR in Alberta has been rising as more of the production comes from large mature fields. These water production trends have been relatively consistent in Alberta and Saskatchewan for a number of years (Figure 1) with some dips occurring when oil prices dropped. British Columbia has remained at a consistently lower average WOR for the province. As Alberta's production of both oil and water dominates over the smaller volumes from Saskatchewan and B.C., the total western Canadian WOR trend closely follows the Alberta provincial plot. 1 As water production rises, so do the costs and problems associated with it. Artificial lift equipment, gathering lines, surface facilities, and water disposal systems reach operating capacity limits, which in turn forces a reduction in oil rates. As produced water rates continue to grow, capacity additions to handle more water become difficult to justify, due to the continually declining oil rates. Corrosion rates may also increase and cause increased maintenance and corrosion prevention costs in older facilities and increases in the size, frequency and clean-up costs for brine spills from gathering or disposal lines. Adding to the problem is the pressing need for more disposal wells, more injection pipelines and injection pumps while the revenue stream continues to fall and the operating cost per meters cubed of crude increases.
Abstract New Paradigm Engineering Ltd., the Centre For Engineering Research Inc. and a consortium of over 35 oil producers and equipment suppliers are now into the 5 th year of a joint industry project on downhole oil/water separation. After three prototype trials and over 15 commercial fields trials, downhole separation has shown itself to be economically very attractive in numerous field trials and potential field applications around the world. While reduction of water production has long been a goal of the oil industry, the economics of reducing water at source still appear to be poorly understood. Often this may be due to the way in which costs are tracked, however, generally the low degree of emphasis placed on water management activities is more likely to blame. In Western Canada, the volume of water produced from oil wells is more than six times the average volume of oil produced and surface water handling costs often exceed $3/m3($0.50/bbl) of water. As a result many wells are shut-in and abandoned, because they do not produce enough oil to cover the costs of water production. This paper will look at economic impacts that can be directly attributed to water production and which affect producing rates, reserves, capital expenditures and operating costs. Some of the potential impacts of DHOWS technology on those costs will also be considered. Introduction Many companies in the Western Canadian Oil & Gas industry use rough economic or performance indicators to benchmark themselves against their competition. The indicators include: operating cost/bbl of oil; finding cost/bbl of reserves; reserve replacement ratios; return on capital employed; drilling cost/meter of depth; etc. While all these indicators have their uses, it is possible that a significant indicator of relative corporate performance might be the average cost of handling water. After all, more water is handled by the oil industry than oil, and, to a large degree, the amount of oil produced from a given reservoir is often most strongly correlated with how the water is handled than in how the oil is found or produced. As the primary displacer of oil from petroleum reservoirs, water has both positive and negative impacts on the oil production. To allow oil to be produced from a given pool, something must come in to displace it In areas where regulations and good production practice do not allow the reservoirs to fall below their bubble point, and no significant natural gas cap exists, the displacement fluid is almost always going to be water. If a natural source of water does not provide pressure support for a pool then water must be added to the reservoir. Therefore, water is usually present in the vast majority of fields producing oil and the oil would not be produced in any significant amounts without it. At the same time the relative permeability and general flow characteristics of water in an oil reservoir, mean that water, when present, is going to find its way to a producing well long before all of the oil has been produced.