Technology key to ExxonMobil and Abu Dhabi relationship

The huge central complex at the Upper Zakum field, some 85 miles offshore of Abu Dhabi, houses some 650 workers and processes more than 550,000 barrels of oil and 130 million cubic feet of natural gas a day.

ExxonMobil is working closely with its co-venturers to develop one of the world’s largest oil fields. A new technology center, artificial islands and an innovative drilling organization highlight efforts to boost recovery at a lower cost.

ExxonMobil, Abu Dhabi National Oil Company (ADNOC) and Japan Oil Development Company (JODCO), co-venturers in the Zakum Development Company (ZADCO), have launched a major project to expand development of the world’s fourth-largest oil field, and the development is on track to meet its targets.

Containing an estimated 50 billion barrels of oil, the Upper Zakum field produces more than one-half million barrels a day. Through the efforts of professionals from ExxonMobil, ZADCO, ADNOC and JODCO, and by applying ExxonMobil’s leading-edge technology, the project could boost daily field production by 200,000 barrels over the next six to seven years — a sizable contribution toward meeting future growth in global oil demand.

Upper Zakum lies about 50 miles northwest of the city of Abu Dhabi, the capital of the seven emirates that make up the United Arab Emirates (UAE). The offshore field covers more than 450 square miles and contains some 450 wells drilled from more than 90 existing platforms. Wells typically extend 7,000 to 8,000 feet below the earth’s surface.

Oil flows through a pipeline network to one of four main processing facilities. After the oil is treated, it’s fed into another pipeline for a 35-mile journey to Zirku Island. There it’s held in large storage tanks to await export.

ExxonMobil holds a 28 percent joint-venture interest in the field and in ZADCO, the field’s operator. ADNOC owns 60 percent, with JODCO holding the remaining 12 percent stake.

Opening doors
Less than 10 percent of the field’s oil has been produced, testimony to the imposing technical challenges it presents. Much of the reservoir is made of low-permeability rock, making the oil difficult — and expensive — to extract.

Nevertheless, says Frank Kemnetz, president of ExxonMobil Abu Dhabi Offshore Petroleum Company, Ltd., development is well under way and on schedule.

He attributes this to the spirit of cooperation among the Abu Dhabi government, ADNOC, ZADCO and the private oil-company co-venturers, and stresses the importance of a disciplined approach that relies on cutting-edge technology to solve problems.

“First you have to understand the resource,” he says. “If you don’t know much about the reservoir rock, you don’t know what will happen when you drill. We use ExxonMobil’s 3-D seismic technology to get the picture we need.”

The next step is to create models, using ExxonMobil’s proprietary EMpower reservoir-simulation technology, which helps predict how the reservoirs will perform.

“Then,” says Kemnetz, “we apply our decision-making tools to determine how to maximize recovery at the lowest cost and risk. Technology adds value by reducing costs and enhancing resource recovery. It opens the door to more options.”

A first for ExxonMobil
To open that door further, ExxonMobil has established a unique technology center in Abu Dhabi.

“The center’s mission is twofold,” says ExxonMobil’s Ram Rajagopalan, the center’s operations manager. “We want to apply high-impact technology that benefits Upper Zakum while still protecting our proprietary technology. And we want to promote a good working relationship between ZADCO and ExxonMobil professionals.”

The technology center is the first to be established at an ExxonMobil joint-interest facility. It’s managed and operated by ExxonMobil staff.

“The technology center provides a window into the ExxonMobil world,” says Rajagopalan. “It enables ZADCO to pair the best technology with a state-of-the-art computing environment to achieve its development targets.”

Employees of ExxonMobil work closely with members of the ZADCO team that manages the Upper Zakum field. Together, they seek to meet the field’s development challenges.

The center places a strong emphasis on training. From 2007 through 2008, it conducted 11 courses for more than 122 people. In addition, about 25 ExxonMobil employees were “seconded,” or temporarily assigned, to ZADCO to further enable the transfer of technical expertise. The center also hired and trained UAE nationals in line with a strategy set out by the government.

In addition to making technology and expertise available in Abu Dhabi, ExxonMobil brings ZADCO’s Emirati nationals to the United States for training, and has accepted a number of individuals for developmental assignments within the company.

“The technology center allows us to bring technological expertise to our co-venturer’s facility so we can work together applying it to Upper Zakum’s challenges,” says Rajagopalan.

Processed oil from the Upper Zakum field is transported by pipeline to Zirku Island, where it is stored for shipment to world markets.

Innovation with sand and rock
Technological advances come in a variety of ways. Some are results of years of intensive research. Some arise from ideas inspired by work in other areas.

Abi Modavi, an engineer with ExxonMobil Production Company who was temporarily assigned to ZADCO as the field development planning leader, suggested that artificial islands, rather than the more expensive steel platforms, be used as drilling and production sites.

“When I first joined ZADCO, I noticed how shallow the water was — about 15 to 80 feet,” says Modavi, “and I started thinking about ways to use artificial islands for drilling and production.”

ExxonMobil and ZADCO agreed that the technical and economic value of the concept held merit, and Movadi’s staff of three quickly grew to more than 100 during the assessment stage, completed one year ago. The project team now is conducting detailed engineering design and tendering construction bids.

Frank Kemnetz says that artificial islands can reduce costs and achieve long-term environmental benefits. He points out that the islands would not be feasible without the “enabling technology” of ExxonMobil’s expertise in extended-reach drilling, which allows wells to be drilled vertically at first, then turned horizontally to target reservoirs up to several miles away.

“With artificial islands and extended-reach technology, we anticipate building fewer islands instead of having to install a larger number of steel platforms to accommodate a comparable number of wells, along with the miles of pipelines to connect them all together,” says Kemnetz. “The cost savings could be in the billions of dollars, and the islands are a better long-term option for the marine environment.”

The oval-shaped islands will be made of sand and rock and measure 2,000 to 2,600 feet in diameter. The rocks, some weighing several tons, are barged from quarries in the UAE.

The islands are expected to outlast the very long producing life of the Upper Zakum field.

A multinational drilling group
ZADCO has embarked on a major development program to boost daily production in the Upper Zakum by nearly 40 percent. Reaching that goal requires a significant increase in drilling activity. When ExxonMobil acquired its interest in Upper Zakum, another offshore operating company conducted well operations. ZADCO had no drilling unit of its own.

A planning team studied more efficient and effective ways to manage drilling. The team, led by Hamid Mozayani, ExxonMobil executive advisor for drilling, was charged with designing an organizational structure for new-well operations involving drilling, completions and well workovers.

“We conducted a study that looked at a number of options,” says Mozayani. “We focused on the people, systems, processes and organizational aspects of well operations.”

The team’s conclusion was for ZADCO to create its own drilling organization. The recommendation was approved, and Mozayani was asked to head up the multinational working group charged with creating the new entity. It began operation in November 2008 when ZADCO took over five offshore rigs and one barge.

“One of the key benefits of establishing a ZADCO drilling organization is its ability to access ExxonMobil’s technology and best practices,” says Mozayani.

“Our goal is to achieve improvements in efficiency and effectiveness of up to 30 percent,” he says. “We’re already drilling wells 10 to 15 percent faster than before, and we anticipate achieving additional efficiencies in drilling and completion times.”