John O’Sullivan outlines the development of Providence Resources’ first well, on the Barryroe oil field, and provides an update on the Spanish Point appraisal well, on which work is expected to commence this summer
Elec

Author: John O’Sullivan, technical director, Providence Resources plc

During 2011, Providence Resources plc, the leading diversified Irish offshore focused oil and gas exploration company, commenced a multi-year drilling programme across six basins around the island of Ireland. These included:

  • The North Celtic Sea Basin, offshore Cork;
  • The southern Porcupine Basin, offshore Kerry;
  • The northern Porcupine Basin, offshore Clare;
  • The St George’s Channel Basin, offshore Wexford;
  • The Rathlin Basin offshore Northern Ireland;
  • The Kish Basin, offshore Dublin.

The objective of this programme was to evaluate the hydrocarbon potential across a range of geographically diverse and geologically disparate areas by drilling a number of key ‘pathfinder’ wells. These wells were considered as the key activities to open up new exploration arenas or evaluate novel play concepts and would therefore have far reaching effects over and above the actual prospects which were drilled.

The programme included appraisal targets which were either proven to be oil or gas bearing as well as exploration prospects, however there was a focus on known oil-bearing structures given their inherent higher value and flexibility in regard to development. This paper will focus on the first well in the campaign which was drilled on the Barryroe oil field. However towards the end, reference will be made to upcoming Spanish Point appraisal well which is currently expected to commence during the summer of 2014.

BARRYROE OIL FIELD

Fig 1: Location map of the Barryroe oil field, North Celtic Sea Basin

The Barryroe oil field is located in the North Celtic Sea Basin, c. 50 kilometres offshore southern Ireland in c. 100 metre water depths (Figure 1). The field was discovered in 1974 by Esso Exploration (now part of ExxonMobil), who subsequently drilled a further four wells across the field through to 1990 at an estimated money of the day cost of circa $100 million. All of the wells drilled on the structure encountered hydrocarbon-bearing reservoir with three of the wells flowing waxy oils at rates of up to circa 1,600 barrels per day.

Even though significant expenditure was incurred in the initial discovery and subsequent appraisal of the Barryroe field, it was ultimately not developed at that time due to a combination of low oil prices and poor fiscal terms, together with lack of suitable production technologies, which together made the field an unattractive proposition for further investment. During the 1990s, the licence was returned to the State as no further work programmes were proposed.

In 2008, a new group of companies was awarded an exploration licence over the Barryroe field and, following a number of asset transactions, this group, comprised of Providence Resources plc (80%, project Operator) and Lansdowne Oil and Gas Limited (20%), commenced appraisal activities. The Barryroe partners acquired a new 3D seismic survey in 2011 and then commenced drilling a new appraisal well, which was designed to acquire a full suite of modern high definition down-hole data in order to further understand and characterise the nature of the Barryroe oil resource potential.

Following assessment of the well results, and integration with the new 3D seismic data, Barryroe was evaluated to be:

  • A large oil discovery with mid-case recoverable oil reserves of circa 300 million barrels from the two principal reservoir zones and significant further appraisal and exploration potential; and
  • A material discovery located in a favourable operating environment (comparable to similar fields in the UK North Sea) with a stable geopolitical and fiscal regime.

The next sections will in turn review the various techniques and technologies which were applied to the Barryroe project and which have led to such a significant unlocking of value in what had been up to then, a dormant oil discovery.

UNDERSTANDING THE UNDERGROUND

Fig 2: The Polarcus Samur acquiring data offshore Ireland during 2011

One of the first decisions taken by the partnership, following the assumption of the Operatorship role by Providence during Q4 2010, was to acquire a high definition 3D seismic survey as soon as possible. The previous dataset comprised vintage 2D seismic reflection profiles which were of relatively poor quality and so it was considered that modern state of the art 3D seismic acquisition and processing programme would provide a much clearer image as to the nature of the subsurface architecture.

The partners contracted Polarcus, a new high technology seismic acquisition company, which deployed a new and uniquely designed vessel  to acquire a c. 240 km2 3D survey over the field in 2011 (Figure 2). Interpretation of the processed 3D seismic data ultimately allowed for the reconstruction of the geological history of the Barryroe area which provided much greater clarity on the nature of the rocks which historically generated, and are currently hosting/sealing, the Barryroe oil accumulation. The data have also allowed for a greater understanding of the stacking pattern and geometries of the various reservoir layers in the subsurface, together with the location and extent of any faulting.

Such mapping also allows for the high-grading of global geological analogues, which can be useful for assessing potential reservoir models and potential approaches to field development. In regard to Barryroe, certain basins in Asia are considered as having the greatest analogue potential. The appraisal programme delivered significant new data that has allowed for a more complete understanding of the subsurface and further appraisal/pre-development drilling is planned in the pathway to field development and ultimately, oil production.

Fig 3: Temperature dependant viscosity of the Barryroe crudes

Prior to the drilling of the recent Barryroe appraisal well, there had been a general view that waxy oils offshore Ireland would have low associated flow rates and subsequently would struggle to be economically viable. Indeed, the Barryroe crudes become solid at room temperature as they have a pour point of circa 21o C (Figure 3). However, following extensive analysis, the Barryroe crudes are in fact light sweet, high value oils with excellent low in-situ oil viscosities of less than 1 cP. The production challenges actually arise as oil is cooled below its wax appearance temperature (for wax deposition) and pour point temperature (for oil flow) as it makes its way from the reservoir to the surface through the production tubing.

Generally, chemicals can provide some benefits to the management of the waxy crudes; however, heat is considered to be the primary solution in the context of the specific Barryroe wax dynamics. Heat management technologies, such as vacuum or pipe-in-pipe insulated production tubing, heated flow-lines and down-hole heating all provide potential technological solutions in this regard.

In the North Sea, the Beatrice Field (BP developed), which was developed in the early 1980s, overcame wax challenges by using chemical pour point depressants, though as the field matured, the crude was flowed as an emulsion of water and oil to the beach via a circa 80 km pipeline with onshore separation. The Maari Field, which was developed in 2009 offshore New Zealand (OMV developed), uses down-hole heating and hot water injection to overcome the issue of waxy crude.

The Cliff Head field, which is offshore Australia (AWE developed), used chemicals and hot water to meet the challenge of high viscosity crudes. The Olowi field, which was developed offshore Gabon (CNR developed), utilises insulation and electrical heated pipelines, whilst the Sea Lion Field offshore Falkland Islands (Premier Oil operated) is planned to utilise electrical down-hole heating.

During the recent appraisal well, Providence utilised vacuum insulated production tubing to keep the oil hot as it flowed to surface and achieved a flow rate of c. 3,500 barrels of oil per day, which is twice what had been previously accomplished (Figure 4). Importantly, this flow rate was achieved with no artificial lift.

PATHWAY TO PRODUCTION

Fig 4: The recent Barryroe well flowing oil to surface

The Barryroe oil field is currently held as an exploration licence during which exploration and appraisal type activities take place. Once a discovery has been made and is considered to have commercial potential, the field can be moved into a lease undertaking, which is an authorisation under which various activities associated with commerciality are assessed. These may include, but are not limited to, further appraisal and pre-development drilling on the discovery. Significant installed local infrastructure exists in the Barryroe area which should expedite development such as:

  • Kinsale Head/Seven Heads gas field and terminals (Kinsale Energy);
  • Whitegate oil refinery & Whiddy Island oil depot (Phillips 66);
  • The Port of Cork logistics base;
  • Cork Airport and heliport.

The trading of crude oil is a global phenomenon and in recent years, there has been a significant increase in crude oil prices associated with issues on both the demand and supply side. Oil assay analysis indicates that the Barryroe crude is broadly similar to the Beatrice oils in the UK North Sea which trade at a premium to Brent. These kinds of crudes make for a good feedstock for catalytic cracker refineries, generating excellent highly sought after diesel yields. Blending of the waxy Barryroe crudes, however, is likely to result in maximising the value of the oil in the current market, with numerous refineries across NW Europe readily able to accept this grade of oil.

The Barryroe oil field also contains a significant volume of associated gas that is in solution, which will be liberated once the oil is brought to surface. Ireland is gas short and with prices based off the UK NBP, these gas volumes should provide a further significant return to the project whilst also helping to address the Irish security of supply issue.

In the Barryroe field, the two reservoir zones that have been successfully tested and independent third party audited contain a mid-case of c. 300 million barrels of recoverable oil. This is a significant volume of oil, and does not include the two further logged hydrocarbon-bearing reservoir zones, nor the potential deeper Jurassic exploration potential.

The Barryroe partners are currently involved in a farm-out process where they are seeking to attract in a suitably qualified technical/financial partner who can take the asset through any final appraisal that may be required and on to development/production. Commercial discussions are currently ongoing.

GO WEST – SPANISH POINT

In conclusion, it is worth commenting on the next well in the Providence multi-well programme, which bears many similarities to Barryroe. The Spanish Point field was discovered  in 1981 by a Phillips Petroleum-led group and encountered a high pressure (circa 10,000 psi), 300 metre oil and gas column in stacked Upper Jurassic sands. The well was located circe 170 kilometres offshore Ireland in circa 400 m water depths in northern Porcupine Basin. Bad weather prevented a full flow testing of this discovery, though one of the intervals produced oil and gas at significant rates.

The field was never developed due to oil price, location, lack of gas infrastructure/market together with technology limitations at that time. Providence licensed the area in 2004 and has since brought in partners Chrysaor and Cairn Energy who have acquired a new 3D seismic survey and plan to drill an appraisal well using the Blackford Dolphin semi-submersible drilling unit during the summer of 2014. The field is thought to contain a recoverable mid-case resource estimate of c. 100 million barrels of oil equivalent, with further add-on potential within the licence block area.

John O’Sullivan studied Geology and Geophysics at UCC and NUI Galway before joining the exploration department at Mobil North Sea in 1989. He worked on various West of Britain and Irish exploration projects for the company before moving to Mobil’s production office in Aberdeen where he worked on the North Sea Beryl Field complex. He subsequently worked in the company’s West of Shetlands Asset Capture Team before relocating to Germany to gain subsalt depth conversion experience. O’Sullivan left Mobil in 1998 to join Marathon Oil in Ireland where he principally worked on the Kinsale Head, SW Kinsale gas storage project and Corrib gas field acquisition. In 2002, following the completion of a Technology Management Master’s, O’Sullivan joined Providence. He is currently completing a PhD dissertation at TCD on the South Porcupine Basin on a part-time basis.

This article is taken from John O’Sullivan’s recent presentation organised by Engineers Ireland’s Cork Branch, which took place on 25 March at Cork’s Rochestown Park Hotel.

http://www.engineersjournal.ie/wp-content/uploads/2014/04/Barryroe.jpghttp://www.engineersjournal.ie/wp-content/uploads/2014/04/Barryroe-300x300.jpgDavid O'RiordanElec3D,oil
Author: John O’Sullivan, technical director, Providence Resources plc During 2011, Providence Resources plc, the leading diversified Irish offshore focused oil and gas exploration company, commenced a multi-year drilling programme across six basins around the island of Ireland. These included: The North Celtic Sea Basin, offshore Cork; The southern Porcupine Basin, offshore Kerry; The...