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SPECTRUM
The magazine for shell EP staff around the world
Vol.11 No.2 – May 2006

Core business.

41With help from SPD, a 50-50 joint venture between Shell and the Russian oil company Evikhon (a subsidiary of Sibir Energy pic), SibBurMash has succeeded in running core barrels 36 metres long while continuing to bring to surface top quality core with 100% recovery. That length, a record for SibBurMash, is far above the average Russian barrel of 6-12 metres, and it has helped reduce by more than 50% SPD's coring time in the Salym fields of western Siberia.

"The relationship has been a typical win-win situation," says Gilles De Broucker, leader of the subsurface field team at Salym and coring contract representative. "It shows how a local company can benefit from the worldwide pull of Shell. In this case, we were able to persuade SibBurMash to try ever longer coring barrels, a feat that we were confident could be accomplished because of our global experience with long barrels in other drilling environments, such as deep water."

Stringent requirements

After working with each other and despite some initial hesitation, SibBurMash quickly saw the challenge being posed by SPD as an opportunity to grow as a company, says Bulat Khairullin, general manager of SibBurMash. "At first glance, the requirements of SPD seemed unusually stringent," Khairullin says. "But we came to see them not so much as stringent requirements, but as high standards."

"SPD's high expectations stimulated the creativity of our designers," Khairullin continues. "We asked them, 'Can you do it?' and they said, 'We can' - and they did. As a result, after beginning from cores of six metres, today we already have achieved cores of 36 metres in one descent, and the coring speed has grown nearly fourfold, from 1.96m/h to 7.93m/h on average."

Longer barrels

The benefits of SibBurMash's new expertise will quickly radiate out into the Russian market, Khairullin added. That's because SPD accounts for only about 10% of the activity of SibBurMash, which is present in the major hydrocarbon-producing regions of Russia. SibBurMash is now in a position to use the longer barrels in the other 90% of its activities — and get a leg-up on the competition in a tough industry. De Broucker says that the strong customer-supplier relationship between SPD and SibBurMash is an outgrowth of Shell's commitment to developing and working closely with local partners and to its continuous pursuit of excellence.

31

Quality well

"There is this huge drive in SPD to reduce the time it takes to drill a quality well," says Koos Koole, SPD drilling manager. "We constantly look at every aspect. Yes, the pressure can be great, but look at the results. Last year, average drilling time was 15 days, starting from 25 days initially. We are moving that down to 13.5 days in 2006, with an eventual target often days in 2009. Fast, quality wells for optimum and accelerated production is the name of the game."

"With that kind of demand, we have to pull everyone up to the same, high level even if it makes people uncomfortable at first," Koole continues. "We ourselves are going off the beaten track, and we ask our contractors to do the same... and it is fun!"

The foundation on which those high expectations are built, Khairullin and De Broucker agree, is trust — specifically, the assurance among the SibBurMash team that, while SPD expects much, it provides much as well.

"I can't say enough about the professionalism of the international team at SPD," says Khairullin. "Whether at base camp, in Tyumen, [E or in Moscow, SPD people are always attentive and kind, and above all willing to help and train our people — as for example when they sent a Shell core expert to Tyumen to talk to us about the impact of longer barrels on core analysis quality.

"There is a risk," Khairullin continues. "We know how important the cores are. They are the data carriers about the properties of the rocks, since only they give the possibility of direct visual study. The quality of the core is instrumental in solving the geological problems presented by the reservoir."

Another key to the success of the relationship has been the nature of the contract, says Nicole van Vugt, operations geologist for SPD. In its dealings with SibBurMash, SPD decided to share the improvement risk. This way, SibBurMash had more security and comfort while trying new operating grounds — and SPD had more of a say in SibBurMash's coring plan.

"A lot of Russian companies use 'turn-key' contracting, in which the client says, 'We want this,' and the contractor goes and does it," Van Vugt says. "Quality prevails more than performance focus, and typically little operational interaction/challenge occurs between the client and the contractor. We opted for shared-risk approach in our contract, in which we guarantee a certain level of payment for attempting to do something — in this case, cutting longer and longer cores faster."

Pushing the limits

To De Broucker, the experience of coring with SibBurMash has been more than a story about pushing technological limits. It has been a story about people rising to the challenge.

"It's amazing to me how performance is related to people wishing to improve together rather than just imposing excellent technology — though technology is also essential," he says. "Key is extended teamwork where the contactor is fully embedded into the company goals."

Overall, 36 metres coring is not a big event in many Shell Opcos. The real win here has been the successful shift of focus and mindset, together with SibBurMash, from a turnkey quality, time-consuming operation to a performance-driven coring operation, maintaining full recovery and quality core.

"This experience has been so satisfying because it goes straight to the heart of what SPD is trying to achieve here in Siberia," De Broucker says. "The best of Shell meeting the best of Russia: that's our goal, and it's working at Salym."



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