Turning around the Tern

Graham Richardson (TAQA)

DEVEX conference, Aberdeen

10th May 2012

Co authors

Audrey Miles (TAQA), Michael Judt (TAQA),

Laurence Bellenfant (Senergy, now BP)

Tern Alpha drilling

and production

platform, UK,

Northern North Sea

Slide 2

Outline

• History and background of Tern area – Example reservoir : Tern Main Brent

• Phase 1 Re-development ‘staircase’

• Conclusion – Highlights

– Lessons learned

– View to the future

Facilities performance

Reservoir surveillance

Re-development scoping

Activity planning

Projects execution

‘Make it safe’

‘Make it work’

‘Make it grow’

Slide 3

Location of Tern Area licences

Shetland

Islands

Tern

Kestrel

Falcon

Slide 4

Infrastructure status : December 2008

upon TAQA completion of Asset purchase

Hudson (subsea)

Non-operated

Kestrel

(subsea)

Tern Brent

Eider

platform

Gas lift

Water injection

Liquid production

Tern

Triassic

Tern facilities capacities

- Gas lift

100 mmscf/d

- Water injection

277,000 bwpd

- Liquids handling

246,000 blpd

History and Background of Tern Area

Reservoir Illustration : Tern Main Brent

• Tern was discovered in April

1975

• Brent reservoir STOIIP

approx. 600 million barrels

• Production and water

injection started in 1989

• Typical N Sea down-dip

water injection pattern

adopted

• Recovery factor to date,

approx. 45 %

• Brent Depth is

approximately 8000 –

8300 ft, OWC 8258 ft.

TVDSS

• Hydrostatically

pressured

• Porosity 17 – 27%

and permeability

0 – 2500 mD

Brent reservoir

producer &

injector locations

March 2012

A

B

C

D

E F

G

TA30 TA07S2 TA05S4

A B C D E F

G

BCU

Heather

Brent

BMNS

Rannoch

Dunlin

Cormorant 1

Cormorant 2

Palaeosol

Basement

A B C D E F

G

BMNS Seismic surface

Model: LB_2007 update

Transfer

fault zone

Tern Brent Reservoir : structural configuration

Slide 7

Tern Brent Reservoir Example log and typical properties

Formation N/G Av Porosity Av Perm mD Av Shi

Upper Ness C 0.50 0.20 87 0.75

Lower Ness 0.72 0.26 1504 0.74

Etive 0.84 0.25 1433 0.68

Rannoch B 0.79 0.23 531 0.75

Broom 0.65 0.18 84 0.46

UPPER

NESS

LOWER

NESS

ETIVE

RANNOCH

BROOM

Tern BrentProduction 1989 - 2011

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

Jan-89 Jan-91 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 Dec-14

Date

Pro

du

cti

on

(b

bl/d

), In

jecti

on

(b

bl/d

)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Wate

rcu

t

'Qoil_bbl/d'

'Qliq_bbl/d'

'Qi_bbl/d'

'WCT'

Slide 8

Production evolution : Tern Brent example

Stabilization of water cut with

background contribution from

Upper Ness, Rannoch, Broom

Plateau (80,000 bopd in

the case of Tern Brent)

Strong water breakthrough dominated by

Lower Ness – Etive layers

Slide 9

Facilities Performance

• Early focus on understanding facilities capacities, baseline

performance and underlying issues

• Recognition of need to improve both production and injection

efficiency

• Injection efficiency particularly important, most reservoirs reliant

on ‘water-drive’ mechanism – Injection the ‘engine’ for sustained production

• Potential was identified for injection facilities capacity increase by

dividing 4 HP pump system into 2 * HP pump system and 2 * LP

pump system

Facilities performance

Reservoir surveillance

Re-development scoping

Activity planning

Projects execution

‘Make it safe’

‘Make it work’

‘Make it grow’

Slide 10

Reservoir surveillance

• A programme of surveillance was undertaken to

improve understanding of the wells and reservoirs,

key elements of which were : – Improved well test and fluid sampling frequency

– Cased hole production logging

– Cased hole saturation logging

– Flowing gradient surveys : gas lift performance

– Reservoir pressure measurements

– Tracer programme in all Tern Brent water injection wells

(tracer example later in the presentation)

– Well mechanical and integrity status review

Facilities Performance

Reservoir Surveillance

Re-development scoping

Activity Planning

Projects Execution

‘Make it safe’

‘Make it work’

‘Make it grow’

Slide 11

Redevelopment scoping

• Using historical information and new surveillance

data as it became available, the reservoirs were

screened for re-development potential and a strategy

developed

– Tern Main Brent : infill production and injection to improve sweep in

Upper Ness, Rannoch, Broom

– Tern Triassic : reduce well spacing, implement water-flood pilot

• Platform challenge : slot constrained, 25 available slots, most being active…

– Kestrel : producer well repair

– Falcon Area : appraisal drilling

with view to ‘fast track’ development

Facilities performance

Reservoir surveillance

Re-development scoping

Activity planning

Projects execution

‘Make it safe’

‘Make it work’

‘Make it grow’

PLAT-

FORM

SUB-

SEA

Slide 12

Activity Planning

• 7 well platform infill campaign

scoped and approved, start of

ops. planned for August 2010 – Rig re-activation

– 5 Brent activities

• 1 work-over to water injection

(dedicated Upper Ness)

• 1 work-over to reinstate full gas

lift (Upper Ness horizontal prod)

• 1 infill producer (UN, Ra, Br)

• 1 water injector sidetrack

• 1 water injector integrity

workover

– 2 Triassic activities

• 1 infill producer

• 1 work-over to water inj.

Facilities performance

Reservoir surveillance

Re-development scoping

Activity planning

Projects execution

‘Make it safe’

‘Make it work’

‘Make it grow’

• Mobile drilling 2010 – Falcon twin branch appraisal

well planned for Spring 2010

Slide 13

Projects execution : achieved timeline

Facilities performance

Reservoir surveillance

Re-development scoping

Activity planning

Projects execution

‘Make it safe’

‘Make it work’

‘Make it grow’

Achieved timeline 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012

TAQA completes Asset purchase

Tern Platform Rig Reactivation SCOPING PLANNING EXECUTION LOOK BACK

Tern Platform Campaign SCOPING PLANNING EXECUTION LOOK BACK

Falcon Appraisal Drilling SCOPING PLANNING EXECUT.

Falcon Development SCOPING PLANNING EXECUTION LOOK BACK

Water Injection Capacity Increase SCOPING PLANNING EXECUTION

Notes 1. Platform campaign extended from 7

to 8 wells, together with some modification / optimisation of later activities in the campaign vs original plan

2. Falcon appraisal : 1st branch water, 2nd branch oil, selected development subsea via Kestrel

Note 1

Note 2

Slide 14

Evolution of campaign

Activity

Sequence

Number

Original Plan

– Slot

Number

Original Plan

- Description

Actual

realised –

Slot Number

Actual

realised -

Description

1 23 Work-over to

Water Injection :

Triassic

23 As per original

plan

2 24 Work-over to

Water Injection :

Brent

24 As per original

plan

3 08 Infill producer :

Brent 08 As per original

plan

4 04 Producer Work-

over : Brent 18 Injection Work-

over : Brent

5 18 Injection Work-

over : Brent 04 Producer Work-

over : Brent

6 05 Infill producer :

Triassic 26 Infill Injector :

Brent

7 28 Injection Work-

over : Brent 30 Infill producer :

Triassic

8 n/a n/a 28 Infill producer :

Brent OP

TIM

IZA

TIO

N

OP

PO

RT

UN

ITIE

S

Tracers

unlocked

opportunity

SE

QU

EN

CIN

G

CH

AN

GE

S

Campaign optimization, activities 6 & 8

• Original development : downdip injectors and updip producers

• In 2010, tracers injected in all Brent water injectors

• 2009 seismic identified new fault and refined the fault pattern

• Southern injectors breakthrough in the Northern producers

• Mid-flank producers less well supported

• Southern injector duplication

• Identified – New injection point for

Mid Flank producers (TA26) – Bypassed oil target (TA28)

• Integrity injection work-over became oil producer activity, dry oil production >4500 b/d at start

New fault

TA28 target

TA26 target

Slide 16

Production results

Base

Decline

Change of operatorship

Note : Plot does not include Last two Tern producers, on-stream recently Activity 7 TA30 = 1,800 bopd initial

Activity 8 TA28 = 4,600 bopd initial

Conclusions : highlights & lessons learned

• Highlights

• Commercially successful drilling campaign in highly mature field

• No subsurface ‘failures’ in the development drilling

• Significant production growth

• Costs out-turn generally as per pre-project expectation (one

significant exception mentioned in lessons learned below)

• Tern platform has strong base performance

• Attractive host for subsea and 3rd party tiebacks

• Main Lessons learned

• Infill drilling campaign : challenging slot recoveries on many activities

• Infill drilling campaign : keep it simple

• last well difficult and cost overrun

• Maintaining improvement in water injection uptime has proved

challenging due to significant maintenance backlog.

Conclusions : View to the future

• Build on the information from the first platform campaign with a view

to unlock a second campaign in the 2014 timeframe

• Continue to build and drill the near field exploration portfolio with a

view to further ‘Falcon-like’ tie back opportunities

• Attract and secure 3rd party business which is value adding and

compliant with TAQA core business