2003 ASME/API GAS-LIFT WORKSHOP Gas Lift Optimization Process MALAYSIA 2003 ASME/API GAS-LIFT WORKSHOP Kuala Lumpur, Malaysia Gas Lift Optimization Process By Zaidah Ibrahim Operations Manager ExxonMobil Exploration and Production Malaysia Inc.

Million Barrels Per Day Oil Equivalent Major Effort Required to Meet Global Energy Demand 40 80 120 160 Oil and Gas Demand New Production Million Barrels Per Day Oil Equivalent ( MBOE ) Existing Production 1980 1990 2000 2010 Our long-term energy outlook tells us that global oil and gas demand is expected to continue to grow -- oil at about 2% per year and gas at about 3% per year. Supplying these energy sources in ever-increasing amounts is clearly a formidable challenge. But the challenge is even greater because the production from our energy resource base is subject to natural decline through depletion. If you assume worldwide average depletion rate of 4 to 5% per year, then the real production growth rate needed to meet projected demand will approach 7%. That means we will must add some 80 million oil-equivalent barrels per day of new production by 2010. Another way to say this is that half of the oil and gas supplies required by 2010 is not yet on production. Industry estimates put the cost of adding these 80 million oil-equivalent barrels per day of new production at over one trillion dollars, or about $100 billion a year: substantially more than the industry’s annual spending today. Often petroleum is found in areas of the world where the operating environment is difficult and the technological and logistical demands imposing, such as deepwater, remote locations. Equally important are the political and financial issues that can sometimes make reaching mutually beneficial agreements so elusive. So what can we do to meet the challenge ahead? Key message: Bringing on ever increasing new production to meet projected future energy demand will require a major effort. Half of required 2010 supply not yet on-stream estimated industry investment exceeds $1 trillion Continued focus to enhance production from existing facilities is just as important

Focus on Gas Lift Gas Lift has been and will continue to be a large part of our business The majority of our artificially lifted production is gas lifted Current production requires routine surveillance and analysis to hold the gains made from optimization Future projects require gas lift as a means of artificial lift . Processes must be transferred to new Production Teams Industry demographics and turnover require ongoing gas lift training to sustain awareness and competency New gas lift technologies must be sought and leveraged where appropriate

ExxonMobil Gas Lift Production 2002 EM Gross Operated Oil Production Gas Lift 27% Rod Pump 11% Other 21% Progressive Cavity Pump 6% Naturally Electric Other Flowing Submersible 2% 52% Pump 2% 27% of EM gross operated oil production is gas lifted

Optimization is a Continuous Process Production Monitoring GL Gas Quality Surface/ Subsurface Equipment GLV Design and Installation OPTIMUM GAS LIFT PRODUCTION Analysis / Redesign Production Monitoring Surveillance Troubleshooting Metering system Competent Operators Optimization

Gas Lift Best Practices Optimization efforts typically result in 5% or more increases in field production. Typically, the gains went away after a period of time. There is a need for sustained focus on gas lift surveillance and optimization to hold the gains EM developed Gas Lift Best Practices from worldwide experiences Optimization Training Organization Gas Lift Best Practices Surveillance Design Equipment

Gas Lift Key Performance Indicators Integrated effort to maximize asset performance . . . Backlog of new GLV installations Backlog of GLV change- outs Idle Capacity Compressor availability/ capacity Water handling capacity Well downtime Volumetric Downtime Number of Active Completions Gas Lift Oil and Liquid Production Total Gas Liquid Ratio Gas Lift Consumed Well Test compliance Actual Production

Continuous Monitoring ---> Ensure Optimum Production Gas Lift Monitoring / Metering System (GLMS) - Real time data acquisition for Gas Lift surveillance Constant Gas Lift Gas Constant and high Gas Lift Gas Supply Constant Casing Pressure Low and Constant Tubing Pressure

ExxonMobil’s Gas Lift Forward Plan Continue to improve Gas Lift Best Practices - document proven examples that others can leverage from Network and promote interactions to improve each Production Unit’s gas lift efficiencies Seek out and transfer new technology, and where applicable, use it to improve gas lift processes and performance