No. 3, 2009
Petr Ivanov
PERM OIL HORIZONS
LUKOIL-Perm is celebrating the 80th anniversary of oil production in the Kama area with high production results
In the jubilee year, LUKOIL-Perm has demonstrated high production growth rates in the oil industry. Today, the company is the largest oil and gas producer in the Perm Territory and a leader among the LUKOIL Group of companies in terms of hydrocarbon output.
Leafing through the pages of history
The Perm Territory is one of the few regions in Russia where all sectors of the oil and gas industry are most fully represented in their industrial potential. The upstream and downstream business began to develop in the Kama area from the first days of Perm oil production to become a single well-to-wheel process with time. Accidental finds of oil springs in the area were reported from the 18th century. However, a major oil- and gas-bearing Volga-Urals province, dubbed the second Baku, was discovered exactly 80 years ago, in August 1929.
The concept of searching for oil and gas pools in the underlying Carbonian and Devonian strata of Permian deposits was developed in the 1950s to usher in the era of geological discoveries, which saw the introduction of new oil production technologies and the commissioning of new fields and whole oil-bearing provinces.
However, the pernicious practice of window dressing during the Soviet period finally resulted in the decline of oil production, which continued until 1995. The years of transition to a market economy adversely affected the downstream sector.
In the mid-1990s, the largest oil-producing, refining and selling companies in the Perm Territory were integrated into JSC LUKOIL. Their integration into the industry's leading company helped the Perm oil sector to recuperate and opened wide prospects for systemic, dynamic and innovative development. LUKOIL-Perm, LUKOIL-Permnefteorgsintez and LUKOIL-Permnefteprodukt have pioneered a whole series of pilot production and social projects that are being successfully implemented in other regions of Russia as well.
Growth strategy
LUKOIL-Perm has incorporated the production facilities of the LUKOIL Group in the Perm Territory to produce oil and gas in the region's 26 administrative districts.
The company holds 123 licenses for subsoil use to explore and produce hydrocarbons. It operates about 6,400 producing wells at 133 oil fields with remaining recoverable reserves of 466.5 million tons as of January 1, 2009.
The most promising oil fields currently developed by LUKOIL-Perm are the Unvinskoye, Sibirskoye, Shershnevskoye, Gagarinskoye, Moskudyinskoye, Shagirtsko-Gozhanskoye, Pavlovskoye and Nozhovskoye.
The company's oil output has been steadily rising in recent years to register an 18% growth since 2002. "In 2008, LUKOIL-Perm produced 11.7 million tons of oil, which constitutes a 3% growth on the previous year, and this is far from the limit. The company is implementing its strategic program which will push the annual production figure up to 15 million tons as early as 2014," LUKOIL-Perm General Director Alexander Leyfrid says.
Last year, the company implemented a highly efficient geological and technical program to increase the average daily oil flow rate per well from 10.9 tons in 2007 to 12.1 tons in 2008. The number of new wells put into operation grew from 71 to 94, including 46 to 67 wells in production drilling, and the corresponding volume of production drilling increased from 97,690 to 137,223 meters per year.
In 2008, the LUKOIL-Perm put three new oil fields - Abramovskoye, Sagrinskoye and Tartinskoye - into commercial operation, and also arranged a system of reservoir pressure maintenance at the Trifonovskoye oil field.
Last year, LUKOIL-Perm also produced 951,600 m3 of gas. Associated petroleum gas made up about two thirds of this amount and natural gas accounted for about one third. "Some 10-15 years ago, casing-head gas was not even considered a valuable raw material and was simply burnt in flares. Today, the company is seeking to utilize the maximum amount of associated gas. In early 2007, a gas pipeline launched at the Shershnevskoye field put an end to a flare burning the associated petroleum gas produced at the oil field. Now this gas is delivered to JSC Permneftegazpererabotka. Some of this gas is processed at chemical factories and partially it is used for oil industry needs in the process of oil treatment. At the same time, the oil gas pipeline has a substantial reserve in terms of its carrying capacity," Alexander Leyfrid says.
LUKOIL-Perm is carrying out similar work in other oil fields as well. The company's goal is to achieve the level of 95% of associated petroleum gas utilization. In addition to economic effect and production infrastructure development in the Kama area, this
practice also makes a great contribution to environmental protection in the Perm Territory.
Focus on innovation technologies
Most of the company's fields are already at the third stage of development, are equipped with field gathering systems and have well-formed field development procedures. These fields account for 62% of remaining oil reserves.
The stock of wells was largely drilled 20-30 years ago. The company is well aware of the need to obtain technologies to sizably extend oil well productivity for a long term and expand the drainage area of oil reserves to provide for sustainable mineral resources management and complete reserves utilization, to say nothing of economic and current performance indicators.
New technologies help boost efficiency of geotechnical measures. "The company is introducing innovative process technologies to raise oil recovery efficiency," Alexander Leyfrid stressed. "These include hydraulic fracturing and acid fracturing, radial drilling and sidetrack well construction. These EOR methods yielded an additional 241,200 tons of oil for the company in 2008, with an average oil flowrate increase of 10.7 tons per day. In addition, the company carries out horizontal and underbalanced drilling on an industrial scale and employs advanced technologies for horizontal well survey," he added.
The Group of companies is expected to increase oil output by 2.5-3% annually in the next five years.
Pilot operations carried out in 2006-2007 proved the great success and high efficiency of these technologies. LUKOIL-Perm is planning to increase the scope of these operations in 2008-2009.
Looking confidently into the future
"Along with enhancing production, the company is carrying out serious and purposeful work to increase oil reserves," Alexander Leyfrid goes on to say. "In 2008, this increment amounted to 11 million tons, meaning that our reserve replacement ratio is almost the same as the oil recovery factor. Today, the main goal of geological exploration in the Perm Territory is to maintain the mineral resource base both in quantitative and qualitative terms. In the past decade, 40 oil fields with reserves of over 26 million tons have been discovered in the region. On the whole, LUKOIL-Perm's remaining proven recoverable reserves in the region exceed 470 million tons of oil."
The company is employing a whole range of modern geological and geophysical methods (aeromagnetic, aerial and space survey, gravity prospecting, 3D and detailed seismic surveys, structural core and parametric drilling and exploratory drilling) for prospecting at licensed blocks. Moreover, the company is focusing on using these methods on an integrated basis, and also on the analysis and interpretation of results.
The company is successfully using 3D seismic survey technologies to carry out additional exploration, estimate and update of oil reserves on the basis of a specified geological model and make other preparations in searching for and developing of satellite fields - small elevations by amplitude and size.
LUKOIL-Perm is particularly careful and fully complies with its environmental guidelines when it carries out geological prospecting in protected environment zones and water conservation areas. In order to prepare sites for exploratory and development drilling in these areas, work is carried out to recount freshwater reserves of water intake basins and bring the boundaries of protective sanitary zones and sanitary belts into compliance with effective regulatory documents. The company carries out seismic surveys in category 1 forests and landscape preserves using environment-friendly technologies without the employment of heavy machinery, making it possible to reduce considerably the scope of forest felling and impact on soil.
The edge areas of the Kama-Kinel system of downwarps and shallow-water post-reef paleoshelf still possess a large potential for growth in category Ñ3 oil reserves. In this connection, geological exploration in recent years has focused on the areas of the Bashkirian crest and the Bymsko-Kungurskaya hollow. Overall, 31 oil fields have been discovered in these territories, including 12 fields with category Ñ1+Ñ2 oil reserves of about 11 million tons since the time the licenses were obtained. Despite its exploration maturity, the area still has a potential for increment in active oil reserves. The economic expediency of the area's development is due to its developed infrastructure and the existence of operational oil pipelines. These factors minimize expenses on field infrastructure development and reduce the timeframe for bringing newly discovered oil reserves into development.
The highest concentration of hydrocarbons in the Perm Territory is found in the central part of the Solikamsk depression, in particular, at promising underlying blocks of Verkhnekamsk potassium salt deposits. In this area, 10 oil fields have been discovered and eight of these are currently at the stage of development. Seismic surveys carried out in the area in different years made it possible to prepare and expose a number of structures with category Ñ3 oil reserves of 27 million tons.
Moreover, LUKOIL-Perm is planning to continue exploring barely studied northern areas of the Perm Territory, namely, the Verkhnepechorskaya depression where commercial oil and gas reserves are presumed to be available.
Today, LUKOIL-Perm is confidently looking into the future, despite a considerable year-on-year decrease in world oil prices amid the ongoing global financial and economic crisis.
"The Company has everything to smoothly overcome this crisis as well: skilled personnel, innovative approaches and new EOR technologies," LUKOIL-Perm General Director Alexander Leyfrid says. "Oil production remains at quite a high level in the region. Oil reserves are expected to rise by 71 million tons for the LUKOIL-Perm Group of companies from 2008 to 2017. This constitutes almost 12% of the entire volume of crude oil produced by the Perm Territory oilmen over 80 years of work."
In the year in which the history of oil production in the Kama area has marked 80 years, LUKOIL-Perm is continuing consistent work and sustainably developing, despite the global crisis. The company's achievements are yet another proof of its solid foundation guaranteed by the experience of many generations of oilmen and the professionalism of its present-day personnel.
