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October 5, 2007
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Home / Issue Archive / 2007 / September #9 / Service Companies Give Positive Forecast for MLT in Russia

№ 9 (September 2007)

Service Companies Give Positive Forecast for MLT in Russia

By Sergei Balashov :[email protected]

Multilateral well technology offers great benefits. It is environmentally friendly and saves resources. It can also increase production efficiency as well as prolong a field’s lifecycle. Until recently, the technology has not been used widely in Russia. It is too pricey for typical Russian field development in West Siberia but does offer economical solutions for large greenfield site projects. Globally, oilfield service companies are investing more and more time and resources into developing and offering new solutions to further increase the efficiency of multilateral technology and promote its benefits among oil and gas producers.
While Russian service companies tend to shy away from MLT, Western oilfield service firms are preaching a different sermon. “Multilateral wells work equally as well in oil and gas applications, as well as green and brown fields,” says Dave Dyer, business development manager for Baker Oil Tools, Russia.
“Multilateral technology has been used in Russia for many years though in recent years we have seen a sharp increase in the amount of companies seeking to assess its application in their fields,” comments Dyer on the growing interest in multilaterals in Russia.

What can the technology offer?

“In terms of space restrictions and environmental concerns, by incorporating multilateral technology, we are reducing the surface location and equipment size. So essentially you have the production and drainage of two, three or four wells with only one wellhead and corresponding equipment on the surface. This reduces the overall footprint of the well/rig operations,” concludes Dyer. For companies operating in Russia, this can prove especially useful in view of the growing environmental responsibilities along with restrictions in place on Russian oil and gas fields. In Russia, where field development costs, and thus the per barrel cost of production are on the high side,  cost-cutting technologies are crucial. “In financial terms, it comes down to evaluating the added cost and time of drilling a multilateral well and comparing it to drilling two, three or four independent wells. This will be unique per field and needs to be all encompassing of surface location, wellheads, rig moves, drilling time, cutting removal, additional tubulars and drilling mud,” Dyer explains, citing the economic advantages of multilateral technology.
A multilateral well can be drilled for up to 1.5 times the cost of a single conventional well, but helps gain access to more reserves while also improving the reservoir flow characteristics. This makes the technology more cost effective overall. “Obviously the main advantage is to increase production, drainage and longevity of wellbores to yield a higher rate of return for oil companies,” says Dyer.
Companies like Gazprom Neft and LUKOIL have already started exploring this new technology. Back in 2002 then-Sibneft signed a deal with Baker Hughes to drill horizontal and multilateral wells, conducting over 100 sidetracks in 2003 alone. This drove up the well yield. LUKOIL has been implementing the technology on its Karachaganak project in Kazakhstan where drilling multilaterals enabled the opeing of new production. Along with its application to onshore fields, multilateral wells have seen widespread use in offshore projects and will mostly likely attract customers from among companies working in the Barents Sea.

What steps are being taken to ensure development of MLT?

Research institutions are also playing a key role in developing multilateral technology in Russia and contributing to its success. If you’re looking to develop and burnish ways to implement multilateral technology, Drilling Equipment – VNIIBT is one of the best organizations to turn to for its vast experience in this field. “VNIIBT was a pioneer to develop and apply the arising multilateral well technology when a variety of pilot and production multilateral wells were drilled in 1952–1959,” says Valeri Prokhorenko, head of VNIIBT’s Well Construction Engineering Support Department. “Those were mainly wells conditionally matching to complexity level 1 and 2 according to the classification of Technology Advancement for Multilaterals, which was developed much later by the Group of Developing Multilateral Well Construction Technology,” Prokhorenko continues.
Subsequently, VNIIBT developed an engineering and technology suite including facilities for drilling and casing lateral holes. In Russia, first directional lateral holes from production strings of idle wells were drilled in Novyi Urengoi in 1992–1994 using VNIIBT’s small-scale telemetry system.
This research institute also closely cooperates with Russian companies of the fuel and power sector. So, in 2005 VNIIBT developed standard engineering solutions for LUKOIL to drill lateral holes from production wells using modern equipment and technologies. The main task of this project was to improve quality and efficiency of lateral holes drilling in the course of well workover or reconstruction. Specifically, developed by Drilling Equipment – VNIIBT solutions included principles for selecting a well for drilling a lateral hole; requirements to the tailing-in technology; selection of a lateral hole profile design; combination of solutions and measures for process operations; basic specifications of special tools and instrumentation to monitor well and lateral hole parameters; a hydraulic program of the drilling process; requirements to drilling mud and special process fluids; rules for selecting a mobile drilling rig, drill pumps and a circulation fluid processing system; and standard and reference documentation regulating lateral hole drilling process.

What to consider when deciding on possible application of multilateral technology?

Apart from the obvious strong sides, this technology has sparked criticism for aggravated risks caused by the sophisticated equipment used for building these types of wells. “The disadvantages will depend on the level and design of the multilateral system, but in most cases there is an increase in the amount of tools and trips in the construction of these wells, which in most cases mean an added potential risk,” comments Dyer, adding that “in all cases these risks are identified and best practices formed and contingency measures identified.” Being an intricate technique, multilateral wells should be treated as such by the oilfield service providers. “The safest course of action when drilling these types of wells is not to treat them as normal processes, but to take added caution when drilling and installing these systems,” advises Dyer. Bakes Oil Tools’ experience shows that with the right preparation, trouble can be avoided.  “Overall, we have a very high success rate on multilateral wells.”
All of these factors suggest that multilateral wells are on track to emerge as one of the more popular technologies in Russian oil and gas as its implementation on major projects can also boost worldwide recognition. The positive outcome of these projects and the growing interest on both sides suggest the future for MLT in Russia is good. “All major Russian companies are active in either using Multi Lateral Technology or are in the process of engaging,” asserts Dyer in support of this no
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