PdV presses drillbit in Orinoco oil belt

OREANDA-NEWS. Venezuelas state-owned PdV and some of its foreign partners in the Orinoco extra-heavy oil belt are focusing on modest production growth through the drillbit, leaving aside thorny issues that have long stymied full-scale integrated development.

PdV plans to drill 700-800 wells in the oil belt in 2015, roughly 60 per month. One well per day is needed to offset natural decline, so the company wants to boost drilling to three per day from a current two. More than 10,000 wells are required to meet the companys ambitious 2019 goal of 2.5mn b/d of fresh Orinoco production from seven new joint ventures.

"Logistics are not so easy," PdV chief executive Eulogio del Pino says. "Were trying to get contractors to move closer to the areas, because we could save a lot of time and money."

The new ventures are currently producing about 50,000 b/d.

PdV also wants to slash drilling time to 15 days from a current 35. Total vertical depth of each well is around 3,000ft (914m), with horizontal extensions on the order of 6,000ft. Associated gas is used to generate power on site, but some will be used in the future for enhanced recovery.

One upstream challenge is low productivity. Each \\$2mn-4mn well produces only around 500-1,000 b/d, with a 6-10pc recovery factor that PdV wants to boost to up to 40pc using secondary recovery.

The fastest-growing new PdV-led project is PetroIndependencia, in which Chevron holds 34pc, Japanese Mitsubishi and Inpex have a combined 5pc and local firm Suelopetrol 1pc. In mid-April, the project was producing 16,600 b/d from 24 wells, with a target of 30,000 b/d by the end of 2015 and 50,000 b/d by the end of 2016.

Because of the viscous nature of the 8.5API Orinoco crude, PdV injects naphtha as a diluent, on the order of 30pc. Crude in the Carabobo section is less viscous and requires less naphtha, most of which is imported. More diluent is required in Junin on the western side.

About 60pc of drilling is currently taking place on PdVs established majority-owned integrated developments, including PetroCedeo with partners Total and Norways Statoil; PetroMonagas with Russias Rosneft; PetroPiar with Chevron; PetroAnzoategui, which PdV runs on its own; and Sinovensa, a blending joint venture with Chinas state-owned CNPC.

The remaining 40pc of drilling is taking place on the seven new joint ventures, including PetroIndependencia; PetroCarabobo with Repsol and Indian partners; PetroJunin with Italys ENI; PetroVictoria with Rosneft; PetroUrica with CNPC; PetroMacareo with PetroVietnam; and PetroMiranda with Rosneft and fellow Russian firm Gazprom.

In a harbinger of future challenges, PdV is drilling new wells, altering the drilling concept and building a water handling plant at PetroCedeo, where high water influx has exacerbated a decline in production. Current output is around 130,000 b/d, compared with a 2004 peak of 200,000 b/d.

PdV says it will maintain this 60:40 balance through 2017, after which it aims to drill 70pc of wells on the new developments.

PdVs own Chinese-made rigs make up about 60pc of the total rigs active in the oil belt.