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Quantifying the HSE Risk of Underbalanced Drilling Operations – A Comparison with Conventional Drilling Operations Presentation to Society of Petroleum Engineers – Underbalanced Drilling: From Niche to Universal Adoption Dubai, UAE, 4th – 6th February 2013 By Gareth Book, Director, Risktec Solutions Ltd Underbalanced Drilling: From Niche to Universal Adoption

www.risktec.com Slide 1

Agenda What is Quantitative Risk Assessment (QRA)?

Why quantify risk? QRA UBD case study Limitations and uncertainties The way forward Final thoughts

Underbalanced Drilling: From Niche to Universal Adoption

Slide 2

What is QRA? A tool for determining the risk level associated with a facility or process. Can be defined as the formal and systematic approach to identifying hazards, potentially hazardous events, and estimating the likelihood of incidents and consequences to people, environment and assets developing from these events. Allows for the comparison of risk reduction options for a particular hazard on an equivalent basis, as well as allowing for the comparison of risks that are generated from separate and unique hazards. Output allows comparison of the assessed risk levels against regulator, company or industry risk acceptance criteria.

Underbalanced Drilling: From Niche to Universal Adoption

Slide 3

Risk Tolerability Framework Risk cannot be justified save in extraordinary circumstances

Unacceptable region HP High H2S offshore production

UBD? Tolerable if ALARP region

Tolerable only if risk reduction is impracticable or if its cost is grossly disproportionate to the improvement gained

1.0E-03/yr

Conventional drilling?

Tolerable if cost of reduction would exceed the improvement

Broadly acceptable region Underbalanced Drilling: From Niche to Universal Adoption

Necessary to maintain assurance that risk remains at this level

1.0E-06/yr

Slide 4

32 people work for 32 years If one dies during those 32 years due to an accident at work:

IRPA = 1 x 10-3 Intolerable!!

How many people do you work with? Underbalanced Drilling: From Niche to Universal Adoption

Slide 5

Quantitative versus qualitative QRA may be appropriate when: High risk exposures – –

People Strategic asset value

Comparisons of options required Risk reduction not obvious Escalation possible Novel technology Demonstration needed Quantification may be mandated by legislation 7522ENGRSK/7522RSKDL Intro to Practical Risk Management, Issue 2.6, Slide 6

© 2011 Risktec Solutions Limited

Conventional thinking… Removal of primary barrier (mud column) Hydrocarbons under pressure at surface Increased number of people on location (rig crew, service company personnel) Simultaneous drilling and production

Underbalanced Drilling: From Niche to Universal Adoption

=

Increased risk

Slide 8

A different view… Improved kick detection

Active management of pressure profile Faster response to influx where the closed system acts as a mode of initial well control prior to activating the BOP’s

=

Reduced blowout frequency / reduced risk

Can we quantify this? Underbalanced Drilling: From Niche to Universal Adoption

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Case Study Study: Offshore UBD Project – QRA for Re-Injection of Native Crude Oil QRA Objectives: Quantify the HSE risk for 3 options : i) water injection through rig pumps (base case); ii) reinjection of native crude through auxiliary pumps on main deck; and iii) re-injection of native crude through rig pumps. Simultaneous natural gas re-injection also considered for all 3 cases. General Assumptions: Based on generic leak frequency data, assumed RCD leak frequency 150% of leak frequency for conventional BOP. Limitations: Excluded UBD separators and atmospheric storage tanks. Result: UBD base case (water as drilling fluid) has the lowest overall contribution to risk, but the risk associated with re-injection of crude oil is also demonstrated to be very low. Final selection of the drilling fluid should also take into account the technical issues for both options. If crude oil is used, recommended that re-injection is via an auxiliary pump skid mounted on the main deck of the drilling rig and not via the rig pumps. Gas injection is the major risk contributor. Recommendations: Using N2 rather than natural gas would result in a significant risk reduction for both the UBD base case and crude oil re-injection options. Recommended that the technical and economic feasibility of this is investigated further.

Underbalanced Drilling: From Niche to Universal Adoption

Slide 10

Case Study – Process Schematic and QRA limits H.P. Gas to Process (30 bar)

Gas To Flare Booster (6 – 30 bar)

Optional Booster to recover L.P. Gas (1 – 3 MMscfd)

RCD

Flow Cross

ESD

UBD Choke

Annular

L.P. Separator

(500 psi W.P.)

Oil

Cuttings Re-injection System Rig Choke

Rig BOP’s

Wellhead

H.P. Separator

Sample Catcher

Gas Water

Rig MGS

Natural Gas from Process

Solids

@ 125 bar

Mixture

Booster (125 – 275 bar) Rig Tanks Liquid Assist (G.L. kick-off)

UBD Equip.

To Rig Pumps

Centrifuge

(800 – 900 lpm)

Vent Gas To Flare

Process Equip.

QRA limits

Water to Storage or Overboard Atmospheric Vented Storage Tank

Vent Gas To Flare

Atmospheric Vented Tank

To Process (Platform) 25000 bbls/day

Rig Equip.

Centrifuge

Underbalanced Drilling: From Niche to Universal Adoption

Focus was on quantifying the process (loss of containment) risk for each option Slide 12

Case Study Comparison of Risk Levels for UBD Options

Underbalanced Drilling: From Niche to Universal Adoption

Slide 13

Case Study Incremental Risk for UBD Options

Underbalanced Drilling: From Niche to Universal Adoption

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Case Study Unacceptable region

Risk cannot be justified save in extraordinary circumstances Tolerable only if risk reduction is impracticable or if its cost is grossly disproportionate to the improvement gained

Tolerable if ALARP region

IR for generic jack-up (conventional drilling) = 2.4E-05/well

Broadly acceptable region Underbalanced Drilling: From Niche to Universal Adoption

IR for UBD = 2.7E-05/well (corresponds to a fatality every 37,000 wells drilled UB) Tolerable if cost of reduction would exceed the improvement Necessary to maintain assurance that risk remains at this level

Slide 15

Case Study Comparison of UBD Operations against example offshore risks

Underbalanced Drilling: From Niche to Universal Adoption

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But with better data… Probabilistic analysis demonstrates probability of blowout significantly less for MPD (SPE/IADC 156893) Statistical analysis demonstrates that frequency of blowout reduced by 90% by use of RCD (SPE 115483)

Adapted from SPE/IADC 156893

Better UBD incident data = more accurate QRA studies Underbalanced Drilling: From Niche to Universal Adoption

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RCD failure data Statistical and probabilistic analysis (SPE/IADC 156893, SPE 115483, SPE/IADC 91242) Comprehensive industry failure databases (OGP, HSE, SINTEF)

Underbalanced Drilling: From Niche to Universal Adoption

Slide 22

The way forward… Develop comprehensive UBD/MPD equipment failure database UBD/MPD blowout/well release frequency analysis based on historical incidents Further statistical/probabilistic analysis of RCD, including Failure Mode & Effects Analysis Wider adoption of QRA techniques to compare risk of UBD/MPD and conventional drilling operations

Underbalanced Drilling: From Niche to Universal Adoption

Slide 23

Final thoughts

Are we asking the right question?

Underbalanced Drilling: From Niche to Universal Adoption

Slide 24