2019 Artificial Lift Research & Development Council (ALRDC), International Gas Lift Workshop Jim Raney, Director Engineering & Technology Sathish Sankaran, Engineering Manager - Advanced Analytics & Emerging Technologies Subash Kannan, Reservoir Engineer- EGOM

Agenda Performance Value Pyramid and Artificial Lift Performance Indicators Levers for Success in a Well with Artificial Lift Production Optimization Unconventional (onshore) Performance envelop Artificial Lift Solution Example: Slug flow for shales with gas lift and angle of HZ Where does Artificial Intelligence (AI) fit into the Artificial Lift Solution? The Impact of American Petroleum Institute (API) on the industry and specifically Artificial Lift

Performance Value Pyramid Performance improvements is an integrated approach encompassing all that we do. KPI measurement is only a part of the larger value pyramid.

Levers for Success Subsurface Drilling Completion Where to Drill - Area and zone Proper Spacing Drilling Drilling in Zone (Effectiveness) Drilling Efficiency Reliable, consistent results Completion Perforation/Entry System and Isolation System Hydraulic Fracture Design Rate Viscosity Sand Density Pressure Deliquification/Artificial Lift Dewatering gas wells is a critical operation Evaluate new pump designs and share artificial lift expertise Production Surveillance

Production Optimization – Unconventional Horizontal Well Flow Dynamics and Artificial Lift Optimization True wellbore geometries Flow regimes (slug/turbulent) Gas and Liquid separation in the lateral Highly variable fluid rates Production Surveillance and Optimization Well rates change dramatically early in life High early flow rates, efficient conversion from flow to fit-for-purpose lift Late in life dominated by slug rates. Monitoring critical Slugs retains fluid in the lateral. AL MUST unload the lateral Design and redesign to optimize artificial lift is more dramatic Duration of efficient single AL design is shorter A well may have 2-3 different types of AL over it life Minimizing Constraints Induced by Salt/Scales/Corrosion Shale's may present different long term concerns Salting and corrosion as most concerning issues Scales may be present later in life

Artificial Lift Envelop Shale wells are primarily Gas Lift and Rod Pump Focus on: 1. Efficiency of AL system; 2. Operating Life Downtime reduction and Production Efficiency

Production – Artificial Lift Solution Process OPTIMIZATION AL Selection Monitoring Auto Modify Ops. Parameters Analysis Real Time Post Appraisals Re-selection Automated Iterative Process (Wells Life) Artificial Lift Integral Solution Process Selection of Artificial lift system Well Performance (Optimization) Knowledge Expertise Training/ Sharing Looking into detail, there are no major changes in the lift system in the last 25 years(at least). But the Reservoirs have changed. More and more of Reservoir uncertainty. Especially with the wells with Fast declining Reservoir pressures (Shales), the whole fluid dynamics is different . Selection/ Reselection – Right Equipment in the Right well at the Right time. Justify the cost to produce an extra Bbl Optimization – Objective - Failure/ downtime reduction, Production Optimization, Increase profit Technology Artificial lift systems Automation Closed loop Machine learning Time between AL changes: Conventional wells = years, Shale wells = months

Slugging Behavior - Shale wells (DHPG) High frequency slugging and associated phase changes can reduce the run life of pumping systems – resulting in underperformance of the wells. Source – SPE 176233

GL – Negative Performance on Wells BHP Gauge Data BHP Time High frequency measured BHP BHP Time GL reduces the well performance

Critical Velocity in HZ Wells Well Deviation Length of HZ The effect of well deviation, i.e. as well becomes more deviated, then difference from vertical becomes more prominent

Promises of Data Analytics (DA) Minimize Downtime, Enhance Safety and Deliver Digital Transformation The Future Vision for Oil & Gas – The Digital Transformation: Create a culture of change in upstream O&G which truly fosters digitalization Accelerate, Automate & Optimize: Witness real-time support technology, measurement & downhole edge capability innovation to improve well performance Analytics & Predictive Maintenance: Wield new automated and integrated systems to dramatically reduce downtime, CAPEX and OPEX at scale Data Driven Optimization: The low-down on automation, smart systems, robotics, technology & the skills required to adopt digital technologies Data Collection, Management & Integration: Drive efficiency gains across operational units by improving data availability, utility & visualization Can Data Analytics DELIVER??

Data Analytics (DA) Can Deliver IF: Data driven analysis is integrated with physics IPR rooted in physics PVT accurately described Data Analytics (calculation/app/model) Must be tuned & calibrated to proactively predict the loading scenarios for changing IPR predict the flow regime (turbulent, laminar, slug, etc.) predict the onset of liquid loading Optimize the AL design for the flow conditions for each well For the transit IPR, the AL design is optimized everyday Has accurate BHP and PVT data Understands the hybrid drainage radius Extends the AL life thru optimization of flow for a longer time

American Petroleum Institute (API) Organization

API Standard Committees Upstream Committee Global Industry Service Committee (GISC) Committee on Standardization of Oilfield Equipment and Materials (CSOEM) Drilling and Production Operations Subcommittee (DPOS) Committee on Refinery Equipment (CRE) Committee on Petroleum Measurement (COPM) Transportation Pipeline Committee Marketing & Distribution Safety & Fire Protection CSOEM Committee on Standardization of Oilfield Equipment and Materials SC2 Offshore Structures SC5 Tubular Goods SC6 Valves and Wellhead Equipment SC8 Drilling Structures and Equipment SC10 Well Cements SC11 Field Operating Equipment SC13 Fluids SC15 Plastic Tubulars SC16 Well Control Systems SC17 Subsea Equipment SC18 Quality SC19 Completion Equipment SC20 Supply Chain SC21 Materials Each subcommittee develops and maintains standards through task/work groups according to established policies and procedures Over 7,000 SMEs are involved in developing and maintaining API standards across all committees

Packers and Bridge Plugs Subsurface Safety Valve Equipment API SC 19 Standards COMPLETION EQUIPMENT Perforating Packers and Bridge Plugs Subsurface Safety Valve Equipment Artificial Lift Sand Screens Downhole Well Test Tools Liner Hanger Equipment

API SC 19 Standards for AL RP 11V5 Gas Lift Equipment (under development) RP 11V6 Gas Lift Equipment (under development) RP 11V8 Gas Lift Equipment (under development) Spec 19G1/ISO 17078-1:2004 Side-Pocket Mandrels (includes Errata 1 dated December 2014) Spec 19G2/ISO 17078-2:2007 Flow-Control Devices for Side-Pocket Mandrels (under revision) Spec 19G3/ISO 17078-3:2009 Running Tools, Pulling Tools and Kick-Over Tools and Latches for Side-Pocket Mandrels RP 19G4/ISO 17078-4:2010 Practices for Side-Pocket Mandrels and Related Equipment- (under revision) RP 19G5 Gas Lift Related Equipment - (under revision) RP 19G6 Gas Lift Related Equipment - (under revision) RP 19G9 Design, Operation, and Troubleshooting of Dual Gas-Lift Wells RP 19G10 Design and Operation of Intermittent Gas-lift Systems RP 19G11 Dynamic Simulation of Gas-lift Wells and Systems Gas Lift Handbook

API SC 19 Standards for AL Get involved to improve AL standards for the industry What a good standard has: Performance-based Elements Establish goals for the standard; Specify assumptions; Establish performance under condition and environment; Establish objectives that meet goals; Establish performance criteria; and Establish verification of performance criteria Clear objective based on sound technical support Reasonable practicable Not restrictive of technology development “Good” practices not necessarily “Best” Practices. Input from all/with a consensus process Addressing what makes a difference Risk based when necessary Performance-based preferred (vs Prescriptive) Allows earlier use of new technology Encourages innovation Goals and objectives are clearly stated Development and maintenance requires less effort

Globalization of Standards

Thanks to my collaborators: Sathish Sankaran and Subash Kannan. Questions? Thank you to 2019 Artificial Lift Research & Development Council (ALRDC), International Gas Lift Workshop for the invitation. Thanks to my collaborators: Sathish Sankaran and Subash Kannan.