Pdo Ah-110 Report

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?@A%@9B!!!!!!!!!!!!LIFTING EXPECTATIONS 1 www.zeitecs.com

ZEiTECS 550 ShuttleTM Pilot Test Al Huwaisah-110, PDO, Oman

November 2010

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Executive Summary

PDO currently operates some 770 ESP wells in numerous assets across Oman. Though ESP run lives are reasonable by industry benchmarks, some 170 ESPs fail each year. Each failure requires heavy rig or hoist intervention to retrieve and replace the ESPs and results in considerable operational disruption, operating cost and production deferment. Furthermore, the ESP interventions distract the hoists from oil-generating WRM type activities incurring further deferment.

The Wireline Retrievable ESP technology, now known as the ZEiTECS ShuttleTM, represents a step change in ESP operating philosophy in PDO. ESP replacement without a hoist reduces operational disruption, reduces Opex and reduces deferment but moreover has profound safety advantages with the elimination of a great many heavy interventions.

Following the success of the 700 Series Shuttle pilot test in PDOs Rima-36, the pilot test program continued with the installation of the 550 Series Shuttle in Al Huwaisah-110. The wireline ESP installation and retrieval functionality again worked well, however, the permanent completion string with cable and control lines became stuck in hole and, after protracted efforts to fish, the well was temporarily suspended. This document reports the incident, discusses lessons learned and explores the various options to take the technology forward in PDO. ZEiTECS thanks PDO for their patience and understanding in this situation and for their continued support of ZEiTECS and the ZEiTECS Shuttle technology.

Shuttle Installation, Rima-36 Rigless Replacement, Rima-36 Shuttle Installation, AH-110

Document prepared by: Neil Griffiths, Executive Vice President and CTO, ZEiTECS

Reviewed by: Greg Schneider, President and CEO, ZEiTECS Nick Garibay, Senior Installation Engineer, ZEiTECS

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Table of Contents!

1.! Introduction !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"!2.! The ZEiTECS ShuttleTM Technology!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"!

2.1. System Description !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!#!3.! Customer Value Proposition !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!#!4.! Scope of Pilot Tests !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!#!

4.1. Phase 1 - Rima-36 Pilot Test (700 Series Shuttle installation)!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!#!4.2. Phase 2 - Rima-36 Pilot Test (700 Series Shuttle rigless ESP replacement) !!!!!!!!!!!!!!!!!!!!!!!$!4.3. Phase 3 - AH-110 Pilot Test (550 Series Shuttle Installation)!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$!

5.! Success Criteria !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$!6.! Well Candidate Selection!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!%!7.! ESP Design and Sizing !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!%!8.! Project Management !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!&!

8.1. Equipment List and Tally !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!&!8.2. Project HAZID !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!&!

9.! Results of the Pilot test !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '(!9.1. Summary of Operations !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '(!

10.! Preliminary Evaluation !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ')!10.1. Review of Shuttle Installations to Date !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ')!10.2. Review of Tubing / Casing Clearance Rationale !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ')!10.3. Review of Wellbore Deviation and Dogleg Severity !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '"!10.4. Review of Clean-out Trip !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '"!10.5. Review of Drift Run !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '#!10.6. Review of Running Speed !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '#!10.7. Review of Hoist Centralisation !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '#!10.8. Review of Bands vs. Clamps !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '#!10.9. Review of Banding Operation !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '$!10.10. Review of 7 LTC Casing Connections !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '$!

11.! Evaluation of Success Criteria!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '$*!

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12.! Additional Lessons Learned !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '%!13.! Preliminary Conclusions !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '%!14.! Follow-up Action before next 550 Shuttle Installation !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '&!

14.1. Review of Band / Clamp Designs and Specifications !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '&!14.2. Review of String Centralization / Protection !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! '&!14.3. Review of 5 ! x 7 Clearance Considerations !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! +(!14.4. Review of Alternatives to DDV Control Lines and PDG Cables!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! +(!14.5. Review of Possible 5 x 7 Configuration (550 Series Shuttle) !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! +(!

15.! Acknowledgements !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! +(!

Attachments

1. Shuttle Components - Schematics 2. Shuttle Components Graphics 3. Original AH-110 Design Data Set 4. AH-110 Wellbore Schematic 5. AH-110 Preliminary Completion Schematic 6. Equipment List and Tally Space-out Sheet 7. Workshop 5 ! x 7 Clearance Demonstration 8. Tubing Casing Design Circles 9. Friction and Drag Modeling 10. Wellbore Deviation Survey 11. LNA and PCA Fishing Diagrams 12. 7 23 lbs/ft LTC Casing Connections Appendices

1. Description of Shuttle Components 2. Shuttle Customer Value Proposition

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1. Introduction !PDO currently operates some 770 ESP wells in numerous assets across Oman. Though ESP run lives are reasonable by industry benchmarks, some 170 ESPs fail each year. Each failure requires heavy rig or hoist intervention to retrieve and replace the ESPs and results in considerable operational disruption, operating cost and production deferment. Furthermore, the number of WRM (Well & Reservoir Management) well intervention activities is increasing substantially across PDO due to increasing field and well maturity and the need to improve reservoir deliverability resulting in competition for limited hoist resources. By having an alternative intervention method for wells with failed ESPs, more WRM, oil-generating activities can be executed with the finite hoist resources.

The Wireline Retrievable ESP technology, now known as the ZEiTECS ShuttleTM, represents a step change in ESP operating philosophy in PDO. When field proven and pilot tested, some 20% to 30% of PDOs ESP wells will benefit from this technology.

Pilot tests of two ZEiTECS ShuttleTM installations were commissioned by PDO, one of the 700 Series designed for installation in minimum 9 5/8 casing and one of the 550 Series designed for installation in minimum 7 casing. The tests would take place in the South and North assets respectively. The first pilot test of the 700 Series took place in Rima-36 and included a hoist supported wireline installation followed by a rigless retrieval and replacement demonstration a month later. This test was declared a resounding success. The pilot test program then continued with the installation of the 550 Series Shuttle in Al Huwaisah-110 where things did not go according to plan. The wireline ESP installation and retrieval functionality again worked very well, however the permanent tubing string with cable and control lines became stuck in hole and, after protracted efforts to fish, the well was temporarily suspended. This document reports the incident and discusses the various options to take the technology forward in PDO. It should be noted that this document was prepared before the AH-110 operation was suspended and before retrieval of the ZEiTECS equipment so the information and analysis contained herein should be regarded as tentative and preliminary.

2. The ZEiTECS ShuttleTM Technology The 700 Series Shuttle system is designed to deploy and retrieve a standard 562 series ESP (or smaller) on wireline through 7-inch tubing. The candidate well must therefore have 9 5/8-inch (max 53.5 lbs/ft) casing or larger down to pump setting depth. The 550 Series Shuttle system is designed to deploy and retrieve a standard 456/400 series ESP (or smaller) on wireline through 5 ! -inch tubing. The candidate well must therefore have 7-inch (max 26 lbs/ft) or larger casing down to pump setting depth.

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2.1. System Description Reference is made to the system schematic presented in Attachment 1 and to the graphics presented in Attachment 2. The Shuttle system comprises of two main parts: the permanent components installed on tubing once for well life and the wireline retrievable components. The permanent components principally consist of the tubing, cable, penetrator can & downhole docking station. The retrievable components principally consist of the ESP system with electro-mechanical connectors that may be run through the tubing to mate in the downhole docking station. A full description of the Shuttle components is presented in Appendix 1.

3. Customer Value Proposition The business case for the Shuttle, where the entire ESP system (pump, seal and motor) may be run and retrieved on wireline, through tubing, is multi-facetted:

Safer operations due to the elimination of frequent heavy workovers with associated hazards and exposure of personnel

Quick and cost effective replacement of failed systems (minimizing turnaround time, intervention time, intervention cost (opex) and associated deferment

Quick and cost effective replacement of working systems to optimise design Temporary deployment of sacrificial systems to clean wells of transient solids and debris Temporary deployment of test systems to measure the well productivity and facilitate optimal

design of the primary systems Preventative maintenance to ensure ESP systems perform well until planned replacement or

next scheduled inspection Well intervention below the ESP to service lower completion components and reservoir

In short the Shuttle represents a step change in ESP system lifecycle management and operating philosophy. Since it is believed that many PDO staff are already fully appreciative of the customer value proposition, further details are presented in Appendix 2. !!!

4. Scope of Pilot Tests 4.1. Phase 1 - Rima-36 Pilot Test (700 Series Shuttle installation) !Phase 1 of the ESP Shuttle Pilot Test program was completed on 10th July 2009. The test involved running the 7-inch tubing and permanent completion components to shallow depth and then running and setting the ESP system on wireline. After the electrical integrity was

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confirmed the complete system was run to pump setting depth. After the surface hook-up was completed, the pump was started and produced expected fluids to surface. This phase of the pilot test was declared a resounding success by PDO management and reported under separate cover. 4.2. Phase 2 - Rima-36 Pilot Test (700 Series Shuttle rigless ESP replacement)

Phase 2 of the ESP Shuttle Pilot Test program was completed on 14th August 2009.

Approximately one month after the initial installation the well was revisited without rig or hoist. The ESP was retrieved on wireline, serviced and re-run on wireline. The ESP was then put back on production. The DTL (Delivering the Limit) time for the ESP Shuttle retrieval and redeployment operation (without hoist) was estimated to be 0.49 days. This phase of the pilot test was also declared a resounding success by PDO management and reported under separate cover.

4.3. Phase 3 - AH-110 Pilot Test (550 Series Shuttle Installation)

Following the successes of Phase 1 and 2 of the 700 Series Shuttle pilot tests in Rima-36 the program would continue with the 550 Series Shuttle installation in Al Huwaisah-110. The test would again involve running the tubing (this time 5!) and permanent completion components to shallow depth and then installing the ESP system on wireline. Full electrical integrity would be confirmed and the complete system would then be run to pump setting depth. The electrical integrity of the system, DDV control line and PDG cable would then be checked frequently while running in hole (as per standard PDO ESP installation procedure). On reaching pump setting depth the tubing hanger, wellhead penetration systems and Xmas tree would be rigged up and the ESP started. The success of the trial would be judged by the criteria listed in the following section.

5. Success Criteria The technical success criteria of the project were pre-defined as follows:

demonstration and proof of installation engineering / mechanical functionality demonstration and proof of wireline installation / retrieval functionality demonstration and proof of wet connector mechanical / electrical functionality demonstration and proof of system electrical integrity demonstration and proof of ESP start-up and re-start capability demonstration and proof of hydraulic functionality & expected fluids to surface

The operational success criteria of the project were pre-defined as follows:

ESP performance parameters stable for 1 week after each (re)deployment ESP performance parameters within expected design range

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The pilot tests would be deemed a success if all of the above conditions were met. ESP performance after the first week would be under PDO management and responsibility.

Obviously the entire pilot test should be conducted in an intrinsically safe manner with zero LTIs, recordable cases or near misses.

6. Well Candidate Selection Wells were screened by PDO to find an appropriate well candidate according to the following criteria:

sub-hydrostatic well with ESP history (good quality design data) 9 5/8 casing (for 700 Series Shuttle), 7 casing (for 550 Series Shuttle) to pump setting depth moderate inclination ( < 5 deg ) low free gas volume fraction (FGVF) at intake (

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8. Project Management !The project was managed by Atika Al-Bimani, PDO ESP Technology Focus Group Leader and ESP Expert. In the months leading up to the pilot tests, weekly project coordination meetings were held with representatives of PDO, ZEiTECS, Wood Group ESP, MB Wireline and Safeway. Project progress and action items were recorded and issued in a series of minutes of meetings. Key project management and milestone documents included:

Equipment List and Tally (attachment 6) Project SWOP and HAZID (as per Rima-36 installation) Installation Program (under separate cover) PDO Well Intervention Program (under separate cover) ZEiTECS onsite Job-Log ZEiTECS Report (this document)

8.1. Equipment List and Tally Reference is made to the Equipment List and Tally presented in Attachment 6 and again to the Wellbore Schematic presented in Attachment 5. This document was designed to identify and record every equipment item:

Shuttle Permanent Components Shuttle Retrievable Components Standard ESP Components Well Completion Components Specialist Tools and Consumables

The Equipment List and Tally was designed to identify parties responsible for the procurement of each item and, where appropriate, to track costs; also to calculate the exact space-out requirements of the permanent and retrievable components and to aid the construction of the final, as built, tally and completion schematic. 8.2. Project HAZID The Project Team convened on 9th June 2010 to conduct the formal Servicing the Well on Paper (SWOP) Exercise and the Hazard Identification Exercise (HAZID) for the AH-110 installation. The objective of the HAZID exercise was to step through the draft program, as a team and to identify any hazards, risks and safety issues pertaining especially to the pilot test i.e. beyond those normally associated with a standard ESP hoist intervention.

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All items were recorded and mitigation measures identified. The subject matter would be covered on site in Extended Toolbox Talks before each stage of the program.

9. Results of the Pilot test

Although the pilot test of the 700 Series Shuttle (installation and then rigless retrieval and replacement) in RIMR-36 were entirely successful the pilot test of the 550 Series Shuttle in Al Huwaisah-110 did not go according to plan. The wireline ESP installation and retrieval functionality again worked well but the permanent completion string with cable and control lines became stuck in hole and, after protracted efforts to fish, the well was temporarily suspended. Here follows a summary of the operations:

9.1. Summary of Operations

Hoist Pre-completion Operations

In order to test the viability of installing the 550 Series Shuttle in 7 casing, the original 7 liner in AH-110 was tied back to surface with 7 23 lbs/ft LTC casing. This operation was conducted before ZEiTECS installation crew arrived on site. Daily Hoist reports show that the new 7 23 lb/ft tie-back was cleaned out with a 3 5/8 tapered mill and 4 ! casing scraper in tandem with a 6.24 string mill on drill pipe. Obstruction was noted at 1281mtbf on entering the liner lap and again at 1547mtbf at hold-up depth. 5m3 of hi-viscosity pill was then circulated and displaced with 65m3 to clean out the well. The 6.24 casing scraper was then re-run on 3 ! drill pipe to 1281mtbf and 30m3 fluid circulated to clean the 7 casing.

There is no record of a wireline drift run prior to running the completion string.

9.2. Workshop Pre-Completion Operations

Commencing 13th October, in the Fahud Completions Workshop, all ZEiTECS equipment was checked and measured, space-out calculations confirmed and cross-checked and the completion sub-assemblies made-up.

To better appreciate and visualise the actual clearance between 5.5 tubing and 7 casing a demonstration was set up. Short lengths of ESP cable, DDV control line and PDG signal line were banded to a pup joint of 5.5 tubing and suspended inside a pup joint of 7 23 lbs/ft casing. Photographs of this demonstration are presented in Attachment 7. A video will also be provided to PDO. As a result of this exercise the clearance was confirmed and agreed to be sufficient.

9.3. Hoist Completion Operations

The Shuttle installation phase of the program started with an extended toolbox talk at 09:00 on 2nd November. The implications of the limited clearance between the 5 ! tubing and 7 casing was explained with emphasis on hoist centralisation, cable and control line management and slow,

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steady running in hole. PDO are to be complimented for the excellent toolbox talk to start the operation.

The first assembly of the permanent completion string was picked up at 11:05 on 2nd November and the hoist was centred over the well. The Downhole Deployment Valve (DDV), Halliburton Packer and Zenith Gauge assemblies were then made up, function and pressure tested and run in hole on 3 ! tubing to 349 mtbf.

The ZEiTECS Penetrator Can was then picked up and the Wood Group AWG#4 flat cable spliced to the pigtails of the Can. There was some concern over imbalance of the phase to ground readings when the cable was tested so the splice was broken out and the tests repeated on the Penetrator Can alone. Note: phase to ground imbalance is quite normal on this system before the connectors are mated; this was also observed previously on the Rima-36 installation. The cable was therefore re-spliced to the Penetrator Can and the program continued.

There were several issues re. pipe handling and make-up (use of correct flush joint lifting subs, correct elevators etc.) and a recalculation of space-out was required when the space out joints were damaged during make-up, however, these issues were resolved and the Landing Nipple assembly was picked up and run in hole.

The permanent completion was then run on 5 ! NVAM tubing banding the ESP cable, DDV control line and PDG signal line three times per joint. At 513mtbf the string was suspended to install the ESP.

The Motor Connector and Motor were picked up and serviced, then the Seal and Pump according to standard ESP installation procedure. The Lock Ratchet Assembly was then picked up but at this point the hoist had to be evacuated due to an H2S alarm.

Atmospheric checks proved the alarm to be false so work continued.

The Lock Ratchet Assembly was then made up to the ESP string. Wireline was rigged up and another toolbox talk conducted before the wireline installation. Particular attention was drawn to the implications and hazards of high wireline tension.

The tubing was filled with water and the DDV closed and monitored. The ESP was then run on wireline (string weight 3000lbs) and landed off in the Landing Nipple at 213mtbf. Electrical integrity of the wet-connectors immediately confirmed a successful installation.

The wireline GS running tool was then jarred down to release and pulled out of hole. During jarring operations it was observed that the operator was pulling back too far and risked unseating the seals and/or wet-connectors this was quickly corrected and the integrity of the system was confirmed.

The wireline was rigged down and the permanent completion was run on 5 ! NVAM tubing banding the ESP cable, DDV control line and PDG signal line three times per joint.

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Everything proceeded well until joint number 50 where a sudden drag of ~5 KdaN was observed (string depth 1003.83mtbf). The ESP cable was checked OK, the PDG signal line was checked OK but the DDV control line failed to hold pressure. The decision was then made to pull out of hole.

The string initially took ~5 KdaN overpull to lift but the overpull increased while attempting to pull the third joint. Joint 50 was laid down and only one band was retrieved on joint 49. No bands were retrieved on joint 48. Joint 47 took 9 KdaN overpull (34 KdaN) and stuck 4.5m above rig floor.

The decision was then made to retrieve the ESP on wireline before further manipulating the tubing. The tubing was worked down to convenient working height and the well topped up with ~10ppg kill fluid. Wireline equipment was rigged up and a 4.767 gauge cutter was run to the top of the Lock Ratchet Assembly at 594 mtbf. The ESP was then successfully retrieved on wireline and laid down.

The string was then worked hard with tension reaching 55 KdaN and joint number 46 was retrieved. Joint 45 remained stuck. A viscous pill was then circulated but to no avail.

Efforts to retrieve the string were abandoned at 05:00 on 6th November and a Schlumberger Free Point Indicator (FPI) was sourced to determine the depth of the free point prior to cutting and fishing the tubing in parts.

The FPI showed tubing to be free down to ~ 450mbdf so a Schlumberger Power Cutter was run and the tubing cut at 438mbdf. The string however remained stuck. The cut was then repeated at the same depth but still to no avail.

A Weatherford 3 1/8 Hydraulic Cutter was then run on 2 7/8 tubing and a cut made at 445mbdf. Only one joint was retrieved with 45 KdaN pull and the next joint stuck again. Another two cuts were made at 120mbdf and 65mbdf after which the tubing down to 120mbdf (9 ! joints) could be retrieved. The ESP cable and DDV line were retrieved with the tubing but the PDG line remained in hole.

[On 7th November, while hoist operations continued, the ZEiTECS installation team returned to Muscat to discuss the situation with the extended project team and, on 9th November ZEiTECS CEO, Greg Schneider, ZEiTECS CTO, Neil Griffiths and ZEiTECS CMO, Tony King flew into Muscat to support the project team and to meet with PDO Management, Saif Hinai, OND.]

The fishing program continued with 4 1/16 tubing spears on 3 ! drill pipe and cable spears from November 9th to November 14th when the decision was made to suspend operations and release the hoist. At the time of report the top of fish (tubing stub and cable) remained at ~331mbdf.

ZEiTECS provided fishing diagrams of the Landing Nipple Assembly and the Penetrator Can assembly to facilitate subsequent fishing operations when the hoist returns (attachment 11).

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10. Preliminary Evaluation At the time of writing this report wellsite operations had yet to be suspended and ZEiTECS equipment remained in hole. It must therefore be emphasized that any analysis, statements and conclusions made at this time must be treated as tentative and preliminary. 10.1. Review of Shuttle Installations to Date The following table summarizes the ZEiTECS Shuttle installations to date:

Installation Series Casing Date Comments

RMOTC, USA 700 9 5/8 July 2009 Customer Demo 3 runs / 18 mates

PDO, Oman 700 9 5/8 July 2009 Pilot Test Installation

PDO, Oman 700 9 5/8 Aug 2009 Retrieval and Replacement Demo

BSP, Brunei 700 9 5/8 Nov 2009 Installation

BSP, Brunei 700 9 5/8 Dec 2009 Installation

BSP, Brunei 550 9 5/8 June 2010 Installation

PDO, Oman 550 7 Nov 2010 Subject of this report

It should be noted that this is the first installation of the 550 Series Shuttle in 7 casing. 10.2. Review of Tubing / Casing Clearance Rationale The viability of the 5 ! flush joint tubing inside 7 casing was discussed within the Pilot Test Project Team in the planning phases of the project. It was recognised that there was limited stand-off between the tubing, cable, control lines and the drift ID of the 7 casing. The ZEiTECS and PDO design circles that were discussed are presented in attachment 8. The 7 x 5 ! configuration was appreciated to have limited clearance vis--vis standard ESP installations but was deemed to be technically and operationally feasible based on the documented rationale detailed below. It is this rationale that we will now redress point by point:

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10.2.1. Well Preparation and Clean-out Before the installation of any ESP Shuttle system the wellbore will be cleaned with a bit, casing scraper and gauge ring, circulated clean and then specially drifted with a wireline drift. If the wireline drift shows any signs of reduced ID, wax, asphaltene, scale, sludge or wellbore debris the exercise will be repeated.

Redress: it would appear that the well was adequately cleaned out with appropriate BHAs and circulated clean but there appears to be no record of a wireline drift run. 10.2.2. Side Wall Contact and Stand-off A tubular completion string (with or without cables and control lines) will always lie against the casing on the low side of the wellbore. Even in vertical wells there will be side contact. In inclined wells the partial weight of the tubing string will be borne by the casing in proportion to the sine of the inclination. The clearance left on the high side (opposite the line of contact) in a clean wellbore is irrelevant.

Redress: none 10.2.3. Modeling of Friction and Drag !Tubular drag simulations were performed using the Well Engineering software, Modrill. The program confirmed, as expected, that clearance has no effect on drag forces experienced during the running and pulling of tubulars. Furthermore, the similarity of the radii of curvatures of 7 ID to 5 ! OD increasing effective contact area also has no effect; for fixed mass, frictional forces are independent of contact area. The synthetic well modeled showed a tensile safety factor (worst case scenario, limit/actual) of some 3.48. Details of the synthetic wells and results are presented in attachment 9.

Redress: none 10.2.4. Abrasive forces on Cables and Bands !The abrasive forces on cable and cable bands are no different from any ESP casing tubing configuration. Contact is contact regardless of stand-off on opposite sides.

Redress: none 10.2.5. Cable Bands vs. Clamps Cable clamps are generally preferred to bands in ESP installations where there is sufficient annular room and are seen to be far more robust and reliable. Unfortunately there is insufficient room for standard clamps in the 7 x 5 ! tubing / casing configuration. It is not unusual for bands to be lost in hole but they are typically lost on the way out not on the way in.

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ESP completions are typically run very slowly and carefully respecting the cost and complexity of the components. However, retrievals of failed systems are done as quickly as possible to save rig-time and deferment. Cable sag and twist as the string is pulled (too) quickly are the primary causes of snapped bands. Abrasion is not normally a factor and, even if so, will occur regardless of the clearance on the non-contact side.

Redress: none 10.2.6. Running Speed and Hoist Centralization The bands that will be used on the 550 Series ESP Shuttle system will be of premium design fitted with due care and attention. The string will be lowered very slowly and precisely with a well-centered hoist elevator.

Redress: it is likely that the hoist did not remain centered as the string weight increased 10.2.7. Prevention of Cable Twist and Sag The running of 5 ! tubing inside 7 23 lbs/ft casing is recognized to have limited clearance but limited clearance can be advantageous as the cable has limited room to sag and twist either on the way in or, in the event of the permanent components ever needing to be retrieved, on the way out.

Redress: the limited clearance is now suspected to prevent any damaged bands from falling and might result in further damage to cable and control lines and difficulty retrieving the string

10.3. Review of Wellbore Deviation and Dogleg Severity The wellbore deviation survey is presented in attachment 10. The wellbore deviation survey was reviewed in the planning phase of the project to identify any potential problems with high inclinations or doglegs. The well is near vertical (

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This operation would appear to be sufficient to clean the well of tubing varnish, scale and any other residual small debris.

10.5. Review of Drift Run ZEiTECS understood that a wireline drift run would be made before the installation of the permanent components. The drift run was intended to detect any slight obstruction in the casing (e.g. over-torqued connections etc.) that a bit and scraper run would be too insensitive to detect. There appears to be no record of the wireline drift run in the daily hoist reports.

10.6. Review of Running Speed The ZEiTECS installation engineers report that the permanent completion string was run in hole with all due care and attention at approximately 0.3 meters/second. There is therefore little reason to believe that the running speed was a contributing factor to the premature hold-up or the subsequent problems retrieving the completion string.

10.7. Review of Hoist Centralisation The ZEiTECS / Wood Group installation program stresses the importance of centering the hoist over the well: 6.2.8. Make sure the rig is centered over the hole. This should be checked periodically and adjusted as needed. The weight of the tubing on the derrick will change the centering. The types of Hoists operated by PDO are notoriously difficult to centralize over the wellbore and tend to lean forward as string weight increases. Coarse adjustments may be made with the hydraulic jacks and finer adjustments may be made by tightening/loosening the guide wires. This process tends to be more of an art than a science and often rig crew are reluctant to spend time on this. The subject of rig centralization was brought up several times by the ZEiTECS installation team but it remains a distinct possibility that the hoist was not centered throughout the installation. If this were the case then bands were likely to be damaged while passing through the BOPs and various profiles inside the wellhead.

10.8. Review of Bands vs. Clamps Although clamps are preferred by many operators and are generally regarded as being more robust, bands are commonly used to support cable and control lines in the ESP industry.

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It is not uncommon for bands to be damaged and lost in hole because failed ESPs are often pulled too quickly but in standard ESP applications there is more room between tubing and casing for the bands to fall. They are typically pushed to bottom in a clean-out trip before the ESP completion is re-run. In the 550 Series Shuttle installation in 7 casing there may be inadequate clearance for the bands to fall and therefore there may be a tendency for the damaged bands to pack-off, further damaging the cable and control lines and hindering tubing retrieval.

10.9. Review of Banding Operation The ZEiTECS installation engineers report that the bands appeared to be fitted correctly and securely in accordance with procedure and remained intact as they entered the BOPs. Obviously it is impossible to observe the band behavior beneath the BOPs and further into the well.

10.10. Review of 7 LTC Casing Connections Reference is made to the diagram of the 7 23 lbs/ft LTC casing connections presented in Attachment 11. It may be seen that the internal negative upset (recess) on each connection (coupling) is 1.00 wide (i.e. 2xJ on the schematic). This is greater than the 0.75 width of the bands used. It is therefore suggested that bands running down the casing wall would click into each coupling recess and then would be damaged when forced down and out. The damage would get progressively worse on traversing each and every coupling.

11. Evaluation of Success Criteria

The technical success criteria of the project may be revisited in light of the suspended operation as follows:

demonstration and proof of installation engineering / mechanical functionality - unsuccessful demonstration and proof of wireline installation / retrieval functionality - successful demonstration and proof of wet connector mechanical / electrical functionality - successful demonstration and proof of system electrical integrity - successful demonstration and proof of ESP start-up and re-start capability - untested demonstration and proof of hydraulic functionality & expected fluids to surface - untested

The operational success criteria of the project may be revisited in light of the suspended operation as follows:

ESP performance parameters stable for 1 week after each (re)deployment - untested ESP performance parameters within expected design range - untested!

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!

12. Additional Lessons Learned The following are recorded as lessons learned in addition to those directly related to the stuck pipe incident:

Check packer (and all required) fittings before shipment to wellsite Test integrity of Penetrator Can before cable splice Ensure correct elevators are specified and brought to wellsite Ensure adequate supply of back-up pups Use only appropriate lifting subs for flush joint tubing Wireline Operator should be briefed before the jarring operation to prevent unseating the seals

and/or connectors during jarring Each of these lessons will be duly addressed before the next installation.

13. Preliminary Conclusions The first pilot test of the 700 Series Shuttle that took place in PDO, Rima-36 and included a hoist supported wireline installation followed by a rigless retrieval and replacement demonstration a month later was declared a resounding success and proved the viability of the ZEiTECS Shuttle Technology to PDO and to the industry at large. Subsequent installations of the 700 and 550 Series Shuttle in BSP, Brunei further demonstrated the viability and reliability of both Shuttle systems. However the 550 installations in BSP have been in 9 5/8 casing. The recent Shuttle installation in PDO, Al Huwaisah-110 was the first 550 Series installation in 7 casing. Though the wireline ESP installation and retrieval functionality again worked very well, the permanent tubing string with cable and control lines became stuck in hole and, after protracted efforts to fish, the well was temporarily suspended. It should be noted that this document was prepared before the AH-110 operation was suspended and before retrieval of the ZEiTECS equipment so the information and analysis contained herein should be regarded as tentative and preliminary. Nevertheless, it is suggested that the lack of hoist centralization may have resulted in bands being damaged as they traversed the BOP and the internal profiles of the wellhead and that the internal profiles of the 7 LTC casing couplings may also have damaged the bands.

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The bands, once damaged, then continued into the hole until such a time that they snagged and held up. Under normal circumstances, in a standard ESP installation, this would not have caused an issue but, with the limited clearance in the 5 ! x 7 configuration, the damaged bands packed off and further damaged the cable and control lines. The damaged bands, cable and control lines then resulted in the difficulty experienced retrieving tubing and eventually the stuck pipe. ZEiTECS and the project team will now take time out to complete a rigorous analysis of the problems encountered on the Al-Huwaisah installation. The tentative follow-up plan is presented in the next section.

14. Follow-up Action before next 550 Shuttle Installation 14.1. Review of Band / Clamp Designs and Specifications A meeting will be convened with Band-IT in Houston (and possibly other suppliers) to discuss the problems encountered on the Al-Huwaisah installation. Agenda items will include:

Operational experience with bands Technical specifications of bands Alternative options (bands, buckles, tools) Possible development of wider bands and buckles Possible development of special clearance bands and buckles Possible development of special supports for control lines beside cable, beneath bands

Alternatives to bands will also be explored such as:

Special Clearance Clamps Wraps, Adhesives, Welds, etc. Stand-offs to protect bands

14.2. Review of String Centralization / Protection If hoist centralization will remain an issue in PDO, measures to mitigate the effects of eccentricity will be investigated:

Mechanical means to centralize string before entering BOP Funnel (trumpet) shaped guides to centralize and ease the string and cables into the BOP Wellhead inserts to provide stand-off from internal profiles

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14.3. Review of 5 ! x 7 Clearance Considerations The rationale of running 5 ! tubing with cable and control line inside 7 casing will be re-visited point by point and re-evaluated possibly leading to revised guidelines and constraints. 14.4. Review of Alternatives to DDV Control Lines and PDG Cables Alternative completion configurations that avoid the use of control lines and gauge lines will be evaluated. ZEiTECS will very soon have a retrievable sensor package (to be run and retrieved on wireline with the ESP) that will avoid the use of Permanent Downhole Gauges and signal lines. The focus here will therefore be on completion configurations that eliminate the DDV and control lines. 14.5. Review of Possible 5 x 7 Configuration (550 Series Shuttle) The value proposition of a 500 Series Shuttle system development will be fully evaluated. This study will include the following considerations:

Mechanical feasibility of embodying the Shuttle functionality in 500 Series configuration Implications to ESP size, power, head, rate, length Implications to cost of ESP and Shuttle system Implications to reliability of ESP and Shuttle system System application envelope Customer value proposition Development costs and timeframe

15. Acknowledgements

ZEiTECS would like to thank PDO for its long standing support and commitment to the ESP Shuttle Technology. In particular we would like to thank Atika Al-Bimani, PDO ESP Technology Focus Group Leader and ESP Expert for her leading role as Project Manager. Furthermore, in light of recent events, ZEiTECS would also like to thank PDO staff and management for their patience and understanding in this unfortunate situation and for their continued support of ZEiTECS and the ZEiTECS Shuttle technology.

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Attachment 1

Shuttle Components

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Attachment 2 550 Series Shuttle Components

Motor Connector

Penetrator Can Docking Station

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Attachment 3 Original Design Data Set

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Attachment 4 Wellbore Schematic

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Attachment 5 Preliminary Completion Schematic

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Attachment 6

Equipment List and Tally /Space-out Sheet

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Attachment 7

5 ! Tubing / 7 Casing Clearance Demonstration, Fahud Workshop

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Attachment 8

Tubing / Casing Design Circles

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Attachment 9 Friction and Drag Modeling

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Attachment 10 Wellbore Deviation Survey

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Attachment 11

Fishing Diagrams

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Attachment 12 7 23 lbs/ft LTC Casing Connections

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Appendix 1 Description of Shuttle Components

Downhole Electrical Connectors

Permanent deployment of the production tubing and power cable requires the electrical connection to the retrievable ESP system to be made downhole. This is achieved with a three phase high voltage connection system of which one half is permanently deployed in the well and the other half is deployed with the ESP.

Penetrator Can

The Penetrator Can assembly is the point in the system where the power cable enters the permanently deployed string. The Penetrator Can assembly accommodates the three phase high voltage connectors and all necessary service lines. The assembly also provides a means by which the connectors deployed on the bottom of the ESP Motor may be aligned to ensure successful mating and is equipped with a means by which the ESP is seated at the correct depth and prevented from rotating during start-up.

The 700 Series Shuttle has a central void between the connectors and allows passage of a standard 111/16th inch toolstring for wireline intervention below. The 550 Series Shuttle does not have this facility.

Motor Connector

The Motor Connector assembly is fixed to the ESP assembly at the base of the motor. It is essentially the male three phase high voltage connection system that locates into the permanently installed Penetrator Can aforementioned. It has the corresponding features to the Penetrator Can to ensure the ESP is seated at the correct depth and prevented from rotating during start-up.

Landing Nipple and Seal Bore

The landing nipple sits at a predetermined distance above the Penetrator Can assembly in the production tubing string. It is equipped with a seal bore and a latching profile by which the Shuttle assembly may be restrained and re-circulation of fluids is prevented.

Lock/Ratchet Assembly

The Lock/Ratchet Assembly is run at the top of the Shuttle string. It locates in the Landing Nipple of the permanently deployed production string and is equipped with a seal to prevent fluid re-circulation. Depending on application, the LRA can be configured to latch and release only when the wireline running tool is disconnected and retrieved or to be run in the expanded position with

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the latching mechanism disabled. The choice of configuration depends on ESP size / weight / horsepower and pump setting depth. The latching mechanism is designed to resist upward movement of the ESP on start-up though this is only needed for very high horsepower ESPs (typically not in PDO).

Downhole Lubricator Valve (aka Downhole Deployment Valve, DDV)

In the event of a well being capable of natural flow, well control is of paramount importance. Conventional wireline intervention normally requires the use of a Lubricator, installed on the wellhead, to provide the essential pressure and fluid containment. Obviously the lubricator is required to be longer than the wireline toolstring. In the case of the ESP Shuttle the size and height required of the lubricator is substantial and likely to require special lifting equipment. However, use of a surface lubricator can be avoided by installation of a Downhole Valve below the Penetrator Can. This valve can be closed to provide well control and ensure intrinsically safe installation and retrieval of the ESP Shuttle system. The Downhole Deployment Valve (DDV) used in the PDO pilot tests was of port and sleeve design and hence required the tubing to be blanked off at bottom. If wireline intervention is required below the ESP Shuttle assembly, a flapper or ball type valve similar to a deep-set subsurface safety valve would be required.

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Appendix 2 Customer Value Proposition

Cost-Effective Replacement of Failed Systems

Regardless of the numerous and well-intentioned ESP run life improvement initiatives in PDO, ESP systems will still fail. The replacement of failed systems will however be quicker and more cost effective on wireline. The mobilisation of hoists to perform heavy, tubing replacement workovers will no longer be required. The ESP replacement operation will be much quicker both in terms of turnaround time and operating time. Deferment will be minimised. Even when hoists are readily available they will not be distracted from more profitable enterprise e.g. drilling new wells and/or re-completing existing wells to restore production and WRM activities.

Cost-Effective Replacement of Sub-Optimal Working Systems

As reservoirs deplete and/or water-out, ESPs tend to move outside their optimal operating envelopes. This often results in loss of production, reduction in efficiency and eventual failure. The ESP Shuttle system presents a cost-effective opportunity to replace systems before failure to optimise system design and maximise efficiency. The working systems retrieved will then be re-furbished and deployed elsewhere.

Sacrificial ESP Systems

Regardless of best endeavours to clean up the wellbore prior to production, ESPs often fail or are blocked and damaged in infancy due to the ingestion and passage of solid wellbore debris. These solids fall into several categories:

Drilling debris cuttings, solids from drill-in fluids, lost circulation material, mud filter cake etc. Perforation debris shrapnel, slug residue, cement, crushed-zone pebbles etc. Formation debris - sands and fines (significant in the early days of production before the sand

face has stabilised and/or sand screens have packed) Stimulation debris - proppant, frac balls etc. Any item accidentally dropped into the wellbore during drilling and intervention activity

The ESP Shuttle system presents a cost-effective opportunity to deploy debris tolerant, sacrificial systems to clean up the wellbore prior to deployment of the optimal, primary system. A sacrificial system might be of mixed flow, abrasion resistant, compression design whereas the ideal primary system might be of radial flow, floating stage design.

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Test ESP Systems

Often reservoir characteristics are poorly understood in the early days of field development and ESPs have to be designed with a vague dataset. The ESP Shuttle system presents a cost-effective opportunity to deploy temporary test ESPs to determine the well productivity. The primary system will then be designed with a quality data set to ensure maximum efficiency and run life.

Preventative Maintenance

All plant and machinery benefits from regular inspection and preventative maintenance. The ESP Shuttle system presents a cost-effective opportunity to apply a preventative maintenance philosophy to ESPs. In the case of the ESP Shuttle the maintenance work scope will include:

Visual inspection of all components for signs of wear, damage, corrosion, etc. Cleaning / un-blocking / replacement of intake screens Checking of shaft rotation and measurement of axial / radial play Changing of dielectric oil in motor(s) checking of displaced oil for solids and contaminants

that might forecast imminent failure Changing of dielectric oil in seal/protector chambers - checking displaced oil for solids and

contaminants that might forecast imminent failure e.g. loss of shaft seal integrity The preventative maintenance programme will ensure that the system has a high chance of performing well until the next inspection or scheduled replacement. Ideally the work scope will be completed during planned maintenance downtime to avoid unscheduled deferment. Such a preventative maintenance programme will have a significant effect on total (cumulative) system run-lives.

Well Intervention Capability below ESP

Conventional ESP installations require a Y-tool and bypass assembly to access the lower completion components and reservoir below the ESP. Although wireline intervention may be justified for numerous reservoir management reasons, the increased level of complexity introduces additional vulnerabilities and failure modes. The 700 Series Shuttle system presents a cost-effective opportunity to intervene with a standard 1 11/16th - inch toolstring when the ESP is pulled for maintenance or replacement. However the 550 Series Shuttle does not offer this facility. Production Logging will not however be possible if the well is incapable of natural flow.

Pdo Ah-110 Report

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Transcript of Pdo Ah-110 Report