The ultradeep, ultracomplex Gulf of Mexico development directs new thinking at reserves and records.

The Na Kika development is about 140 miles (225 km) southeast of New Orleans, La., in water depths ranging from 5,800 ft to 7,600 ft (1,770 m to 2,316 m), making it the deepest moored development project ever. The project consists of subsea production systems servicing 12 development wells from six fields tied back to a central, permanently moored floating development and production host facility. The host consists of a semisubmersible-shaped hull with topside facilities for fluid processing and pipelines for oil and gas export to shore. It will have complete separation, dehydration and treatment facilities designed to process estimated peak daily production of 425 MMcf of gas and 110,000 bbl of oil.

Octopus

The Na Kika development gets its name from the octopus god of the Kiribati people of the Gilbert Islands. The Kiribati believe Na Kika used his eight arms to shove up the earth from the bottom of the sea to form the islands. Similarly, the Na Kika host facility will have eight slots: six to produce the existing fields and two additional for possible future extensions. It also will have 16 mooring lines secured to the sea floor by suction piles at between 6,600 ft and 8,300 ft (2,000 m and 2,500 m) from the floating platform.
Of the six Na Kika subfields, five - Kepler, Ariel, Fourier, Herschel and East Anstey - are jointly owned by Shell Exploration & Production Co. and BP. The remaining field, Coulomb, is wholly owned by Shell. Shell is the project's predevelopment operator, responsible for the design, fabrication and installation of the floating host facility and subsea production system, as well as drilling and completion of the 12 development wells. Shell Deepwater Services is providing design engineering and project management for Na Kika, with support from various design consultants. BP will be the post-production operator, responsible for operation of the host facility and surveillance of the subsea satellite fields.

Total project cost, excluding lease costs, is about US $1.3 billion. About 50% of the costs are associated with fabricating the host facility and pipeline, 25% are associated with fabricating and installing the subsea components, and 25% are associated with drilling and completing the wells.

Records

When complete, Na Kika will establish new records in several areas. It will be the deepest permanently moored semisubmersible development and production system in the world. It will set a new well development water depth record at about 7,600 ft (2,300 m), and will be the first central host for development of six dispersed subsea fields.

Na Kika also will bring to fruition technological advances that Shell has been working to develop for several years, including the world's first pipe-in-pipe risers and the first "electrically heated ready" flow lines and risers. Na Kika will have the largest pipe-in-pipe flow line in the Gulf of Mexico as well as the Gulf's first downhill flow. It also will have the first deepwater subsea well completion with three commingled reservoirs and the first deepwater subsea well completions using Smart well technology.

Technical limits

The technological firsts that characterize the Na Kika development are also the enablers of an economic transformation from marginal to profitable. Were it not for standardized subsea processes and hardware, knowledge transfer from one project to the next and systematic improvements brought about through Shell's Drilling the Limit program and other new ways of thinking and working, Na Kika would not have been economically viable.

All of the initial discoveries were small- to medium-sized, with none sufficient to support a standalone development in such deep water. In 1997 Shell and BP chartered a system selection team to evaluate various alternative development scenarios and select a development system that would maximize profit, provide long-term robustness and flexibility, and minimize regulatory approval risk. An exhaustive evaluation of multiple host and subsea layout configurations led to the central, permanently moored floating host facility.

Shell used integrated production modeling (IPM) to bridge gaps in communication and understanding between subsurface, subsea, topsides and operations teams and thus bring about many improvements to the project. The IPM model quantified the trade-offs that occur when the host facility is moved from one location to another and was used to compare and optimize alternate locations based on project net present value. The model was used to:

• justify subsea multiphase meters in flowline jumpers on three oil wells;
• identify a marginally economic completion as a candidate for staging; and
• identify additional ultimate recovery that could be gained from two of the largest oil fields by gas lifting the subsea production risers.

Drilling

According to Na Kika lead drilling engineer Leendert Jan Ursem, "normal" drilling technology and practices could not have produced the level of performance necessary to make the development economically feasible. "We had to prove that we could reduce historical drilling costs by 30% in order to make the project economical. So we started to challenge everything," Ursem said.

That challenge led to paradigm shifts that resulted in a 40% reduction in drilling time and 25% to 30% reduction in costs compared to historical levels. A prime example of this shift was a new sidetracking procedure that saved several million dollars and earned accolades in a recent Shell groupwide drilling forum. Ursem recalled his team's plan to avoid drilling multiple horizontal wellbores by instead drilling an open-hole sidetrack in one direction and then pulling the bit back up, turning and drilling a new sidetrack in another direction - all without bringing the drillstring out of the hole. While this technique had been applied in exploration wells, it had never been tried in a shale formation in a development well.
To formulate a successful plan, the Na Kika team sought advice from drilling engineers throughout the world. "We listed the idea on the Wells Global Network and received eight responses within a week from places like Gabon, Oman, Brunei, Australia and the North Sea," Ursem said. Ursem brought his own experience from Shell Expro, where he had served as Drilling the Limit leader. The Shell team also turned to partner BP to leverage the company's experience in the UK Wytch Farm project. Follow-up communication, evaluation and planning continued for 2 months.

"At the end of that time, we distilled all of the information into a plan that we were confident to pursue," said Ursem. The resulting open sidetrack well was a total success and marked the first time such a junction had been drilled in shale. It allowed the drilling team to take a core of the formation and also to place the production casing in the optimum spot. Avoiding pulling the drillstring from the well and not needing to set cement kick-off plugs resulted in savings of four rig days and about $4.5 million. Shell next plans to use this technique in Nigeria to take formation cores from its Bonga wells offshore West Africa.
Cost-saving strategies

The unique open-hole sidetracking method was not the only significant cost saver in the Na Kika drilling program. By using a buoy technique to install crossover spools between the wellhead and the subsea blowout prevention system, the team was able to employ an anchor-handling vessel rather than a rig, thus reducing spread rates from about $300,000 per day to $40,000 per day. This technique also reduced rig time by 2.5 days per well across 10 wells.

Using a synthetic-based drilling mud immediately below 20-in. casing mitigated any risk of swelling clays, or "gumbo," as well as the need to change muds and allowed the drilling crew to push the 20-in. casing 500 ft (150 m) deeper into the well while keeping the well under control.
Additional savings accrued from the ability to run all production casing as a single string vs. a liner with tiebacks. "Production strings historically are run as liners because of the high risk of sticking," Ursem said. However, the synthetic mud system and wellbore cleaning operation allowed the team to run nine production casings as long strings. He estimated the resulting rig savings of 2.5 days per well translated to about $5 million.

The Na Kika team was able to reduce drilling costs 30%, even with higher-than-historical logistical costs. Ursem attributed the success to the people in the project, Shell's Drilling the Limit process and its Wells Global Network. "Everyone contributed - the Transocean Marianas rig crews, drilling engineers, third-party contractors and everyone that came up with great ideas," he said.
Drilling in Na Kika was finished in May 2002, and completion is under way. The first oil is expected this year.