© 2010 Chevron

Thailand Experience

Kimberly McHughDrilling and Completions Manager Mid Continent/Alaska

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Updated: 28 April 2011

© 2010 Chevron

We started operating in Thailand in the 1960’s and expanded to a sizable operation…

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© 2010 Chevron

Thailand: Complex Geological Environment

Grant Anderson / Unocal Thailand / Nov.95

COMPARTMENTALIZED RESERVOIRS

Simplified sketch showing structural elementswith many small fault blocks drilled by wells in structurally high positions.

In 3 dimensions, channel systems are complexand cut by many faults: difficult to predict and image.

One channel system as seen on 3D seismic

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Plan: Drillable Well (Dual-Kick/Plan)

West(-)/East(+) [ft]

Sout

h(-)

/Nor

th(+

) [ft]

-2000 -1000 0 1000 2000 3000

-1000

0

1000

2000

3000

9 5/8"

7"D

CB

A

E

Plan: Drillable Well (Dual-Kick/Plan)

Vertical Section at 100.00° [ft]

True

Ver

tical

Dep

th [f

t]

-4000 -2000 0 2000 4000

0

2000

4000

6000

8000

10000

9 5/8"

7"

EE

AA

BB

CC

DD

Typical GOT “slimhole” production well

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Well Design Evolution

5

TVD

500'

1000'

4,500'

9,500'

26"

20"

13-3/8"

9-5/8"

13-3/8"

9-5/8"

7"

9-5/8"

7"

2-7/8”, or 3-1/2”

26"

13-3/8"

9-5/8"

7"

<1983 1984-’93 1994-’96 Today

Typical BHT 350 °F, pore pressure 11-12.5ppg

7"

5-1/2"

2-7/8”

“Ultra”Slimhole

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Standard Slim-hole Well Design

6

1000’

12¼” Hole9⅝” CasingWBM

7000’MD

14,000’MD

8½” Hole7” CasingSeawater

6⅛” Hole2⅞ or 3½” TbgNAF

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Days to Drill & Complete

7

0

10

20

30

40

50

60

70

80

80 82 84 86 88 90 92 94 96 98

2000

2002

2004

2006

Day

s

Drilling TechnologyPDC Bits 1982Oil Based Mud 1982Simpler Completions 1983Unitized Wellheads 1984-87MWD Tool 1985Top Drive Rotary Systems 1985Steerable Drilling Systems 1985Super Combo Logs 1985Steering Tools 1988Adjustable Stabilizers1991TCP Completions 1993Slim Hole Monobores 1995Splitter Wellheads 1996Low Lime Mud 1998Casing Drilling 1999LWD 2002Offline Activity Centers 2003Offline Openhole logging 2008

*Red = Developed in Thailand

PDC’s, OBM, Smaller hole/casing

Top Drive

Slimhole

4 to 3 casing strings

Increasing TVD

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2010 Days / Well Vs MD/TVD

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Thailand VS CVX Global Drilling - Footage

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490,000 ft. 490,000 ft.

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But is it Safe?

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Safety Performance – Drilling Last 5 years (2006-2011)

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0.13 0.110.06

0.25

0.00

0.37

1.01

0.45

0.53

0.86

0.42 0.37

0.00

0.50

1.00

1.50

0

2

4

6

8

10

12

14

16

18

2006 2007 2008 2009 2010 2011(as of 15 Mar)

DAFW Recordable DAFWR TRIR

On July 2nd 2010, Drilling group reached 2 years without DAFWR, with more than 7.3 million man hours, and TRIR YTD is 0.24PJSM logged 170hrs in Q1, 367 hrs in Q2

© 2010 Chevron

How?

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Alignment of Goals

All goals should support the PU goals

Goals need to be clear and targeted to impact

Accountable Visible

Individual Goals

Key Contract Goals

Asset Goals

PU

Goals

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Critical View of Operations• Identify Missed Opportunities

• NPT - Tool not a Stick

• Use data to focus efforts

Capitalize on Commonality

Use measurable and meaningful KPI’s (SPM)

Work together as a team (office, field, service co., networks)

Celebrate Success – (e-mails, competition, awards, etc.)

Manage Operations for Performance

© 2010 Chevron 15

Drilling Time Breakdown on an Average Well – used to evaluate offline logging

0.5

4.5

3.5

6.5

11

14

10.5

25

3

7

6.5

6

9.5

0

0.5

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

SKID

12-1/4" HOLE

9-5/8" CSG

DRILL OUT

8-1/2" HOLE

7" CSG

DRILL OUT

6-1/8" HOLE

COND HOLE

POH FOR LOG

LOG

ADD LOG

2-7/8" TBG

CMT TBG

RELEASE

Time breakdown

Wireline logging ~12.5 HRS

Plan to work offline

45 HRS

40 HRS

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Drilling Wells is a process and the effectiveness of process controls determines the end result

We treat drilling wells as a repeatable process that can be optimized

Controls are used within our process to ensure adherence to sound engineering standards and effective management of risks

– Controls and Processes are in place for:• Reservoir and geological planning

• Drilling planning and design

• Field implementation

Continuous improvement of process & controls to maximize efficiency is everyone's responsibility

© 2010 Chevron

Engineers are assigned to individual technologies and drilling projects and are held accountable to deliver positive results

Individuals are assigned to manage specific technological components of the process and the contracts associated with that technology

Drlg Eng teams are assigned to specific asset teams to focus on that team’s drilling projects

Some individuals also have longer term strategic initiatives requiring both technical and management skills

Ops team concentrate on execution safely and efficiently

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Work Processes to manage high activity

6 drilling teams focused on specific areas– Drilling Operations

– Drilling Engineering

• Performance

• Measurements

• Tangibles

• Fluids and Environmental

• Projects

Rigorous contract management Cross functional integrated CPDEP process for

– Business Planning,

– Facilities,

– Well planning and execution

Data collection through “WellView”– detailed performance tracking and analysis

– trends and changes can be seen and addressed

Special local technology and techniques have been developed

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Wins - Operational Discipline

SOP’s Rig QA Audits

o Safety Processeso Equipment

Repetition of Operations Long Term Rig Contractor “Partnerships” Project Schedule Near Miss Reporting

o Positives Improved Safety

o E – Colors Trainingo JSA Coaching and MSW standardso Drilling Performanceo Hand Safety Program

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Challenges – Operational Discipline

Drilling Schedule

o Fluid

Repetition of Operations

o Safety >> Routine Operations

Organizational Capability

o July 2010 – Average of three (3) New Drilling Supt Experience is 3 months

o Engineering – 45% Engineers with < 1 year experience

o Driller Competency

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Closing

Success = f (clarity of the vision + ability to change+ tolerance for pain)

“In order to succeed we must accept failure.”

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Questions