Evaluation of Smart Well Technology for the Rosetta Phase II Development Gerard Mulder Smart Wells Global Implementation Leader, Shell International E&P B.V. FORCE Seminar on Advanced Wells, 21 April 2004, Stavanger First presentation at OMC 2003, Ravenna, March 26, 2003

Contents Introduction Completion options Reservoir simulation results Reliability and Risk analysis Conclusions

Rashid Gas Field Rashid-3 Rashid-1 Rashid-2 Development lease 25 Km NOT NORMALLY MANNED PLATFORM 6 PRODUCERS MINIMUM FACILITIES WHP 4 PRODUCERS ? 24”TWO PHASE EXPORT LINE TO ROSETTA PRODUCTION FACILITY 10KM 20” INFIELD LINE SUBSEA DEVELOPMENT?

Conventional - platform Smart – platform or subsea Well Completion Options Conventional - platform Conventional - subsea Smart – platform or subsea

Target Reservoirs and Wells Conventional wells Smart wells Rashid-1 D1, D 1 two-zone selective Rashid-2 F2, F1, F 3 single-zone 2 three-zone selective D1, D, C 1 three-zone selective Rashid-3 1 or 2 single-zone OR 1 two-zone non-selective

Reservoir Simulation Results Uncontrolled commingling of multiple reservoirs is not recommended; control/selectivity is required to: Avoid potential cross-flow Shut-in water producing reservoirs Comparison Smart versus Conventional: Rashid-1: similar recoveries Rashid-2: 2 Smart wells on F-sands give similar recoveries as 3 conventional wells Rashid-3: Smart well recovers 16-23% more gas

Reliability and Risk Analysis Establish a life-cycle plan for each well and completion option (construction  production  abandonment) Consider each individual step and element in detail, and Perform a failure mode analysis - identify causes, effects, probabilities and consequences Calculate risk (RMA/FMECA) Calculate “risk-Dollars” Identify and rank critical issues

Well Cost, Risk and Exposure

Production and Construction Risk

Intervention and Lost Production Risk

SSD / ICV and Gravel Pack Risk

Conclusions Commingling requires flow control Risk and reliability analysis allows: Identification of dominant risks Quantitative comparisons between the options Smart wells offer attractive Phase II development opportunity (considering recovery and risked costs)