NC3 & NC8 FIELDS DEVELOPMENT PROJECT

PTRC 29 June 2012

Presented by: Hani Sufia Hassan (Production Technologist)

Contributed By: SK 316 Development Team

Objective

To seek PTRC Endorsement on NC3 & NC8 Fields Well Conceptual Design

Presentation Outline
Objective Project Background Chronology of Events Field Overview Fluid Properties Well Modeling
DST Data Matching VLP & IPR Correlation Determination

Performance Prediction
Base Case Model Sensitivity analysis

Material Selection Conceptual Well Design Conclusion & Way Forward

Project Background
Area Development Plan (ADP)
Development Concept As per agreed development concept
NC8
7.0 km 11.5 km

Development assumptions Phase 1: NC3 as hub CPP complex to provide gas supply for 600MMscfd (gross)

Kenari
Possible Additional Scope (AGRU offshore) - Can be defer due to potential CAPEX increase, will erode economy

NC5 and F38 will be phased develop to supplement the shortfall from NC3 and NC8 Gas exported via 80 km pipeline to E11R-C TL6 (PL326) integrity and ullage is available for SK-316 fields gas export option. AGRU onshore

NC5
17.5 km

NC3 CPP

29.3 km

F38

80 km

E11 RC
~120 km

Possible Additional Scope - Need trunkline replacement as per IP assessment to be confirmed

MLNG 3

Train 9

Project Chronology

PCSB

PMU

Downstream

PETRONAS Board has approved the award of SK316 PSC to PCSB and its nominated subsidiary, and to immediately execute the project for 1st gas in December 2015

SK-316 Block Development Project Planning

Jan

Feb NC3 MR2

March

April

May

June

July

Aug

Sep

Oct

Nov

Dec

Forgas Model

NC3 MR3 NC3 MR4 NC3 FDP NC8 FDRC2/MR2

NC8 MR3

NC8 MR4 NC8 FDP

Kasawari FDRC2/MR2 Kasawari MR3 Kasawari MR4 Kasawari FDP Dec.2013

Project Status Updates

Date 29th April 2011 11th November 2011 14th February 2012 13th June 2012 15th June 2012

Event MR#1 MR#2 FDRC#2 FDRC#3 (NC3) MR#3 (NC3)

Remarks Prepared and Endorsed by PMU Prepared and Endorsed by PMU Endorsed by FDRC Endorsed by FDRC Approved by TRC

Production Forecast
Proposal Development
SK 316 will be phased developed with NC3 field to come on stream first (Q4 2015) and NC8 to be staged once NC3 declines (6 years later). As a base case, both NC3 & NC8 development shall involve : o 4+1 development wells o 7 inch tubing o Average Production rate of 120-150 MMscf/day/well o Compressor is recommended at a later stage subject to: NC8 Development Production optimization (600 mmscf/d supply) Economics

Num of Wells 5

GIIP (BSCF) 3352

Reserve @ 2036 (BSCF) 2661

Recovery Factor (%) 79

Reserve @ 2050 (BSCF) 2865

Recovery Factor (%) 85

Plateau Period (Years) 6

Field Gas Production Rate & Cumulative Production

THP & BHP

Field Overview : NC3

Core NC3-1RDR NC3-2 No No

PVT Yes No

Logs Yes Yes

MDT Yes Yes

DST Yes No

Fluid Summary : NC3

Fluid composition data is based on the available DST and PVT data.
Mid Point of Res Presure at Mid Temp at Mid Gas Mol Wt SG z-factor Gas viscosity CGR Condy API H2S Mercury CO2 Chloride 3204 6584 154 22.88 0.822 1.02 0.032 1.37 33.00 77 -140 6.9 -11.8 17 -19.6 2000 - 3000 Component N2 CO2 C1 C2 C3 IC4 NC4 IC5 NC5 C6 C7+ Total Mol % 0.791 19.605 75.171 2.695 0.817 0.206 0.171 0.085 0.047 0.066 0.346 100 m TVD ss psia deg C g/mol 10512 309.4 ft TVDSS deg F

cp stb/MMscf ppm g/m3 % mg/L Mol wt

Separator Condition

111

Field Overview : NC8

Location: Offshore Sarawak Reservoir: Cycle IV/V Block :SK316 GWC: 3661 m TVDSS Well Name : NC8-1 ( Dec 2009), Top Carbonate : 2959 m TVDSS (NC8-1), NC8SW-ST1( Dec 2011) 3389 m TVDSS (NC8SW-ST1) Total Depth : NC8-1 ( 3720.8 TVDDF, 3699.5 TVDSS) NC8SW-ST1( 3742.17 TVDDF, 3716.55 TVDSS) Water Depth : 107.1 m Structure : Pinnacle type carbonate build up

Core NC8-1 NC8SW-ST1 No No

PVT Yes No

Logs Yes Yes

MDT Yes Yes

DST Yes No

Fluid Summary : NC8

Fluid composition data is based on the available DST and PVT data.
Mid Point of Res Presure at Mid Temp at Mid Gas Mol Wt SG z-factor Gas viscosity CGR Condy API H2S Mercury CO2 Chloride Component N2 CO2 C1 C2 C3 IC4 NC4 IC5 NC5 C6 C7+ Total 3310 6761 142 20.61 1.107 1.106 0.047 1.61 33.2 33.6 150 -170 0.064 -1.747 16 -17 100 - 500 Mol % 0.951 17.078 77.167 2.941 0.838 0.216 0.176 0.093 0.047 0.067 0.426 100 m TVDSS psia deg C g/mol 10860 ft TVDSS 257.6 deg F

cp stb/MMscf ppm g/m3 % mg/L

Mol wt

Separator Condition

119

WELL MODELING MATCHING TO DST DATA TUBING SIZE SELECTION EROSIONAL STUDY

Well Model Matching NC3 DST

DST#1

Assumptions: 1. IPR model Petroleum Experts 2. Uses Gray as VLP Correlation Remarks: 1. Well model is matched and validated against DST data (from NC31RDR).

Interval, m MDDF Pi, psia k, mD C, mmscf/d/psi Total Skin AOF, MMSCFD Ri, ft

2800 2820 (20 m) 6421 67 4.5 8 114 1060

Well Model Matching NC8 DST

DST#1 Interval, m MDDF 3100-3150 (50 m) 6682 27 334 700

Assumptions: 1. IPR model Petroleum Experts 2. Uses Gray as VLP Correlation Remarks: 1. Well model is matched and validated against DST data (from NC81).

Pi, psia k, mD AOF, MMSCFD Ri, ft

Tubing size selection

Vertical Well Highly Deviated Well

8 1/2

7 8 1/2 7 5 1/2 5 1/2

3 1/2

3 1/2

Wellhead Pressure (psig)

Wellhead Pressure (psig)

Remarks: 1. Deviated well with 7 tubing size is selected as the optimum well design to deliver 150mmscf/d and keep production plateau of 600 msscf/d with 4 development wells.

AOF Comparison between Vertical & Highly Deviated Well

AOF Comparison
3500 Vertical Well 3000 Highly Deviated Well 2500 Gas Rate (mmscf/d) 2000 1500 1000 500 0 50 100 300 600 Production Interval (m)

Remarks: 1. Deviated to Horizontal well trajectory is preferred to ensure maximum well deliverability.

Erosion Study

--INPUT DATA--Tbg:TUBING ID 6.400 Tg=Temp Gas 300 Pg:Pres.Gas 6405 SGg: Gas S.G. (AIR=1) 0.65 Qg: Gas Prod.Rate 222,000 C=EMPIRICAL CONST.* 300 SGc:CONDENSATE S.G. 0.82 SGw: WATER SG (H2O=1) 1.05 Qc:Condensate Prod.Rate 287.0 Qw:Water Prod.Rate 978.0 Ks=Fitting Empirical Constant 7.04 Qs=Solids Prod. Rate 0.500 Click here for guidelines on threshold velocities UNIT SELECTION: E

---CALCULATIONS--IN F PSI MCFD sp.gr. sp.gr. BC/MMCF BW/MMCF FT^3/D E or M

Remarks: 1. For security of supply, wells are designed to be able to deliver 200mmscf/d without the risk for erosion. 2. C value = 300 for solids free fluid stream (continuous service using S13Cr material, Ref: API 14E)

Material Selection Tubing Stress Analysis

Material Selection : SMI & JFE Method

Field Res Pressure psia NC3 NC8 6415 6659 Temp C02 Content %mole 17 20 Co2 Partial Pressure psia 1090 1331.8 CO2 Partial Pressure atm 74 90.59 H2S Content ppm 140 140 H2S Partial Pressure psia 0.8981 0.5979 H2S Partial Pressure atm 6.1 6.3

deg F 305 310

JFE

Material Selection : SMI Method

Field CO2 Partial Pressure atm NC3 NC8 74 90.59 H2S Partial Pressure atm 6.1 6.3 High-Ni Alloy High-Ni Alloy Material Recommendation

B11 Resak PC4 NC3/NC8

Nearby Field PC4 (Installed) Resak Lower I & J (Installed) B11 (Installed) B12 (FDP)

Material Selection S13Cr S13Cr 28Cr 13Cr

Remarks: 1. Based on nearby field data, fields that require 22Cr or more have adopted lower material grade (except for B11). 2. No major well integrity issue reported in these fields to date, except for B11. 3. Using SMI method, the selected material is High Ni Alloy (SM-2535 or 2242)

Material Selection : JFE Method, CO2 Corrosion Map

NC3/NC8

Field

CO2 Partial Pressure MPa

Tempt

pH

H2S pp (MPa)

Material Recommenda tion

Remarks: 1. Based on JFE method, the selected material is 15Cr to avoid the risk of Sulphide Stress Cracking (SSC)

C 148 148

NC3 NC8

7.498 9.179

3.4
3.5

0.00619
0.00412

15Cr 15Cr

Tubing Stress Analysis

Remarks: Use premium connection in the analysis (JFE Bear) Tubing & connection able to withstand multiple load.

Material Selection Recommendation

It is apparent that 2 different references i.e. SMI & JFE recommend 2 different material i.e. S2535 and S15Cr respectively. Based on lab analysis conducted by SMI, it is suggested that the following tubulars:
Production Tubing : S17CRS-125 (New material) Production Liner : SM13CRS-110 (subject to further assessment) or SM17CRS-125 (Best case) Production Casing : L80

Generic Well Deliverability Analysis Sensitivity Analysis

Well Deliverability Analysis

Example: Well NC3-A4

GWC

Remarks: 1. Well is able to produce 150 mmscf/d outside of erosion risk region.

Results Gas Rate : Water Rate : Condensate Rate : Solution Node Pressure (FBHP) : Completion Skin : Wellhead Superficial Gas Velocity : Wellhead Pressure : Wellhead Temperature :

Value 150 665 196 6310 8 46.5 4300 270

(MMscf/day) (STB/day) (STB/day) (psia) (ft/sec) (psia) (deg F)

Permeability, k (mD() OH section (m)

19 290

Uncertainty Analysis : Sensitivities to CGR & WGR

Sensitivity to CGR Sensitivity to WGR

FTHP@ 4300 psig/initial condition

Notes: 1. The sensitivity to CGR plot shows insignificant reduction of well deliverability at higher CGR values (up to 50 stb/mmscf). 2. Similar trend is also seen for the sensitivity to WGR (up to 50 bbl/mmscf)

Uncertainty Analysis : Sensitivities to Permeability & Skin

Sensitivity to Permeability Sensitivity to Skin

FTHP@ 4300 psig/initial condition

Notes: 1. Sensitivity to permeability has shown significant difference in well deliverability for permeability values of 0.1 to 20 mD. However further improvements of the permeability suggests minimal increment in well deliverability. 2. Insignificant reduction of well deliverability for skin sensitivity.

Well Conceptual Design Potential Production Problem & Mitigation Plan Production Surveillance Requirement New Technology/Replication Recommendation & Conclusion

Well Conceptual Design

Directional Well
7 TRSCSSV

8-1/2 Open hole with 7 pre drilled liner Casing : 30 Conductor 13-3/8 Intermediate Casing 10-3/4 x 9-5/8 Production Casing 7 Tubing, 29#, S17Cr
Fiber Optic PDG

Top of Liner 9 5/8 casing shoe

Completion Accessories; - Two PDG out of 4 development wells - Slim Type of TR-SCSSSV - Permanent packer - No Go Nipple - Flow Coupling - Seal Stem & Locator stung into 7 liner Material : S17Cr or 22Cr subject to lab test results

7 pre-drilled liner

EOT

Potential Production Problem

Potential Production Problem & Mitigation Plan:
Uncertainty 1. Low well deliverability within lower section of carbonate section Contingency Plan 1. Pursue 4+1 wells development approach with 1 well being appraisal cum development to collect more reservoir data (core analysis). 1. Well placement is designed to be higher than GWC (~300m)

2. Early water coning / breakthrough at wells penetrating lower section of reservoir 3. High contaminant level e.g. mercury 4. Borehole Stability including subsidence

1. A system to monitor mercury level & handling shall be incorporated 1. To conduct geomechanics study using anologue field (PC4) core data and update study later during development phase. 2. Proper drilling & completion fluid (Use of Chloride & Bromide based mud is not recommended for high nickel alloy steel) 1. Estimated flowing wellhead temperature 270deg F

5. Wellhead growth

Production Surveillance Requirement & New Technology / Replication

Production Surveillance Requirement:
Plan to install Permanent Downhole Gauge (PDG) in 2 wells (for each NC3 & NC8) Real time monitoring bottom hole pressure & temperature Purposes:
Well Performance Evaluation Pressure depletion monitoring over the production Reduce well downtime & risk due to wireline activities for conventional wireline run down hole gauge

New Technology / Replication:

17Cr for tubing material selection (subject to further study) Fiber Optic PDG with hybrid connections for high Temperature & high gas rates wells. Consideration of using N-flow (filter cake removal system) to remove potential formation damage caused from drilling.

Conclusion & Recommendation

Conclusion:
NC3 and NC8 wells are to be developed using 7 tubing using 15Cr or 17Cr (subject to lab test result). All development wells are designed as highly deviated with Open Hole section ranging from 290m-600m to ensure optimum well deliverability i.e. 150 mmscf/d. 2 PDGs (with compatibility to High Temp conditions) are proposed for each field for reservoir monitoring.

Recommendation:
PTRC to endorse the proposed well conceptual design

THANK YOU