This paper presents the design and the field application of amphoteric polymer mud system to solve the problems conventional polymer caused, when drilling high reactive shale formation. It has been studied relationship of the structural features and mechanisms of polymer molecules with the performance of polymer mud. Amphoteric polymers have been developed with cationic and anionic groups in the one polymer molecule chain to be the dual function to improve the inhibition and to maintain excellent rheology of mud. This new kind of polymer mud system has been utilized in most oilfields of China, in diverse geographic locations, formation lithologies and hostile environments such as high density, high salinity and high temperature. It has been observed in the fields that this new drilling fluid has the desired optimum shale and borehole stabilization, improved rheological properties, high rates of penetration and benefit for oil formation protection.

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