Image credit: BamBamImages

Lars Endre Hestenes, BG Group’s well integrity manager until he started his new role on June 1, said a new, single engineering standard was introduced to integrate well integrity more firmly into production operations.

“We had maybe 15 or 20 standards, so we rolled all of them into a single well engineering standard and now it’s considered a minimum standard. That work was done in the second half of last year,” Hestenes said.

This new standard went live in January and BG Group is now promoting well integrity as an embedded function of the production process because of problems arising from older wells, including those handed over by former owners, he said.

UK-headquartered BG Group is an explorer and producer of natural gas in more than 20 countries and as its assets age, the maintenance of wells now takes up “a much larger portion” of the firm’s well service activity than it did in recent years, Hestenes said.

His comments were echoed by Kevin Borzel, vice president of new well integrity consultancy Steelhead Energy Services.

The Offshore oil and gas industry remains far too reactive in managing ageing assets, but this is changing as boardroom alarm mounts over the unexpected costs of end-of-life interventions, Borzel said.

According to Hestenes, operators have to pay particular attention to legacy wells, including handed-over wells in different countries where the operator has limited understanding of what is in the well.

“[Operators] can spend a lot of time and effort establishing their condition in terms of material quality, corrosion and other issues. And you get situations where the worse the well is, the better it’s producing, so the temptation can be to keep producing, which is not correct,” he said.

Raising awareness

The promotion of well integrity within BG Group could be compared to the elevation of health, safety and environment (HSE) in the industry at large, Hestenes added.

 “Well integrity and well engineering are similar disciplines but have not been integrated in the production operation. Now we are inviting well engineering into the space, so it’s not just the well integrity engineer who is responsible for well integrity. It’s what we call a function-critical role, so that means the head of production is driving this, asking, how are our HSE figures? How is our well integrity? Have you had any issues? It’s trying to fix things early before they escalate into multiple failures.”

Hestenes’ comments reflect a shift in operators’ focus toward end-of-lifecycle management, as the low oil price wards them off new production plays, Borzel of Steelhead Energy Services said.

Borzel is formerly of Wood Group Intetech and his company is currently developing well integrity management systems and abandonment programs for a listed offshore explorer and producer he declined to name.

Pressure is on for operators to work over wells that for various reasons had been temporarily suspended, Borzel said.

 “When you start working those over and putting assets back on line, the reaction is always surprise because the options are all expensive,” he said.

Pushing well integrity to the fore is increasing the alarm over the high costs of late-life interventions.

“At one operator I worked for we had a new CEO who couldn’t really grasp how much money we were spending at end of lifecycle,” Borzel said.

“So he requested that a memo be drafted explaining why he was spending so much on this, and I think that once upper management grasped the liabilities associated with end of lifecycle it drives well integrity through the business, and the awareness sets in-- that in order to overcome the costs associated with the end of the lifecycle, you plan for the end of the lifecycle at the beginning of developing the asset.”

Senior management are realising that to avoid those costs at the end of the lifecycle you need a proactive approach in designing and maintaining the wells, for lifecycle and the time of abandonment, and this requires additional upfront investment which in the long term saves capital, Borzel said.

The well integrity function is infiltrating mainstream operations across the industry, but end-of-life strategies are still largely reactive, he added.

More monitoring of well conditions throughout the well lifecycle is needed to move from a “lagging” to a “leading” style of well management, he said.

“Onshore is leading this more than offshore. For offshore it’s early days. But as those at the top of the business see the dollar figures coming across their desks, the trend is building.”