1. SPE Distinguished Lecturer Program The SPE Distinguished Lecturer Program is funded principally through a grant from the SPE Foundation. The society gratefully acknowledges the companies that support this program by allowing their professionals to participate as lecturers. Special thanks to the American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME) for its contribution to the program. Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl

2. Produced Water Management A Legacy or an Opportunity for Sustainable Field Development Dr. Zara Khatib Shell E&P International Middle East & South Asia Region Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl

3. Outline Global energy and water challenges Produced water from oil fields : sources & challenges Water management practices Examples where technology enabled integrated water management Key messages & conclusions

4. The ‘Global Energy Challenge’ Shifting towards a low-carbon energy system Meeting growing demand while reducing environmental and social impacts Providing access to modern energy for all

5. Front-page Issues Every Day Water is now emerging as the next global issue Climate changeLocal air pollutionEnergy diversity & security

6. Freshwater stress is increasing faster than expected ---- 2005 (WBCSD Water Scenarios to 2025, published 2006)

7. Produced Water Sources Sea or River Water Injection Produced Water Injection Surface Facilities Oil Producer Well Water Injector Well Oil water Gas Processing Producing Zone Produced Water Discharge Oil Pipeline Aquifer

8. Globally For Every Barrel of Oil Produced 3 Barrels of Water Are Co-produced Average Global Produced Water Volumes Increased by 20% in Last Two Years (DOE J. Vale)

9. Average Produced Water Per Country Water Oil Ratios (Bbl/bbl)

10. Produced Water Handling Is Costly Cost ranges from $0.15-$15/bbl of water Lifting (17%) Separation (15%) De - Oiling(21%) Filtering (14 %) Injecting (5 %) Pumping (27.5%) Lifting (17%) Separation (15%) De - Oiling(21%) Filtering (14 %) Injecting (5 %) Pumping (27.5%)

11. High Water Footprint With IOR/EOR 5 years10 years20 years Oil production split based on Recovery Processes Primary Waterflood & Polymer EORPrimary Waterflood & Polymer Thermal Primary Waterflood Primary Waterflood Primary Waterflood Primary Waterflood

12. Water Footprint in Steam Floods steam generator injection well steam and condensed water oil and water zone production well hot water oil bank heat losses

13. Minimise the volumes to Surface Maximise re-use of water by injecting into hydrocarbon producing formation Reduce footprint and cost Use beneficially all resources Safeguard open waters & aquifers Water Management Practices

14. Examples Where Technology Enabled Integrated Water Management

15. Impact of Well Completion on Water Production

16. Early Water Breakthrough in Naturally Fractured Reservoirs S h Max Fracture aligned parallel to S h Max, increasing conductivity S h Max Water Injection Water production

17. Control of Induced Fractures During Water Flood Water quality of injection water is key

18. Pressure Control at Injectors Conventional- Pressure Control at Producers 1.5 yrs6 yrs10 yrs 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 465 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2201 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 3796 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 465 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2201 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 3796 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2205 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 463 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2205 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 3796 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 463 days 10203040 5 10 15 20 25 30 35 40 45 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 3796 days 10203040 5 10 15 20 25 30 35 40 45 Optimal – Pressure Control at Injectors Ultimate Recovery > 15%

19. Water Front Management (4D Seismic) Increased intensity of injection to southern wells Converted high water cut producers to injectors Used produced water injection instead of seawater in the North

20. Impact of High Rate ESP’s

21. Novel Zonal Isolation Elastomer 3.6 millimeter Game-changer technology Threefold increase of oil production Less water production Elastomer 8.1millimeter (118% increase)

22. Increase in Oil Production by Water Shut-off at the Source

23. Small Foot Print and Lower Impact on Environment (Modular, Compact, Fit for Purpose Facilities) Deepwater Sub-sea Land Assets Offshore Assets

24. Other fibre crops Maximise Resource Utilisation Converting waste water to value

25. Ultra Clean Fuels From Natural Gas with Good Water & Energy Value Opportunity process water production- 13,000 t/d excess heat - 2-3 gigawatt energy in steam Waste heat can be used to treat water to make it suitable for irrigation or drinking water - 1 mw => 240 m3/d Shell Middle Distillate Synthesis (SMDS) in Malaysia Gas intake: 12,500 t/d, Fuel production: 9500 t/d

26. By Design: All By-products are valuable Natural Gas FischerTropsch Synthesis Hydrocracking - CO + 2H 2 -CH 2 - Syngas Manufacturing CH 4 Syngas Manufacturing Gas Treatment Sell Sulphur (480 t/day) R&D Concrete & asphalt + O 2 Plant cooling System Water (~1400 m3/hr) Deep Treating Re-use in process Once-through sea water cooling not required No waste water discharge to sea

27. Extracting Energy From Hot Rocks Pilot in El-Salvador Steam produced from fractured hot rock drives turbine Enough electricity generated to supply 9000 homes Benefits  Reduced greenhouse gas emissions  Carbon credits under Clean Development Mechanism  A clean, renewable and indigenous resource Induced fractures

28. Reed Beds to Biofuels 4500m3/day of produced water not injected deep wells is equivalent to about : 100 Million Cubic Feet/year Gas savings and 5 KT/y CO2 less emission

29. Key Messages & Conclusions Produced Water is 3 times the oil production and has been increasing at about 10% per year Water management practices are an integral part of effective well and reservoir management Technology enables integrated water management but the challenge is in the implementation

30. Produced water is a valuable resource particularly in an increasingly constrained fresh water world Turning Produced Water from a “Legacy” to an “Opportunity” has been demonstrated Integrated Water Management is good business for sustainable field development Key Messages & Conclusions

31. “We are all guardians of the future. What we do today will impact on the world that the next generations will inherit” Innovation Thank You Q&A