The focus of my past few years has been on a technology-driven play in the Lower Tertiary-Age reservoirs of the deepwater Gulf of Mexico (GOM). These Upper, Middle, and Lower Wilcox reservoirs represent a large resource base in an infrastructure-rich basin. Chevron-operated production will begin from the Wilcox reservoir in 2014, when the company’s Jack/St Malo subsea development is commissioned. In addition, Chevron’s two most recent deepwater GOM discoveries have been in the Wilcox, and the company continues to hold a very strong lease position for future exploration.
Technology Management System Across Chevron: The “Focus Area” Model
Like most integrated energy companies, Chevron has evolved a system of technology governance that suits the enterprise. To ensure the technologies critical to providing competitive differentiation are identified and advanced, the company developed a “focus area” model. Decisions are made by governance bodies composed jointly of energy technology company (ETC) and operating company representatives. Strategic drivers are identified and validated for the various Technology Focus Areas (such as exploration, reservoir management, or deepwater development), and technology initiatives are funded on the basis of a technology’s risk/reward profile and its alignment with the strategic drivers. These initiatives are managed by technology practitioners within ETC, ensuring that the technologies that are developed and the lessons learned coincident with early deployment are easily shared throughout the enterprise. Business units are allocated their fair share of the cost to develop each technology, and most development projects managed within the focus area process contribute to the common good (or at least the good of a significant sector) of the corporation.
In certain cases, particularly when the business challenge is materially different from those typically found in the rest of the enterprise, an asset-specific supplement to the focus area model has proven to be beneficial. The Wilcox reservoir presents such a challenge.
The Wilcox Challenge
The following are some of the challenges Wilcox operators face in improving recovery from Wilcox reservoirs and reducing the cost of Wilcox developments:
- Most prospects and discoveries are in deep water (greater than 5,000 ft) and beneath a thick layer of salt, leading to imaging, characterization, and drilling challenges.
- Reservoirs are thick and heterogeneous, dictating complex completion and reservoir management/surveillance solutions.
- Primary oil recovery is low (<10%).
Response to Wilcox Challenges
The leaders of Chevron’s two GOM-based business units and ETC envisioned that a portfolio of high-impact technologies be managed as an integrated project. The top leaders of those three organizational units comprise the sponsor body for the Greater Gulf of Mexico (GGOM) Wilcox Challenge Technology Plan, an entity chartered to advance this portfolio.
The purpose of the plan is to ensure the right technologies are identified, resourced, and progressed to meet Wilcox-specific challenges facing the business units. The objective of the plan is to make these technologies available at the required time to intersect critical business needs, delivering increased production rates, increased ultimate recoveries, and lower development costs.
Plan Scope
The scope of the plan is across the full upstream portion of the value chain, from exploration through appraisal, development, and operations. The plan includes projects that are considered strategic research—from idea generation through proof of concept and component testing. Other elements also included in the portfolio can be termed technology development (continuing advancement through prototype testing and identifying opportunities for deployment).
The plan includes a number of projects that were being (and continue to be) managed by ETC personnel as part of the common-good focus area model. In these cases, project managers can now depend on strong ties back to the two GOM business units as they advance their scientific discovery process. One strategic research project, involving sweet-spot mapping of the Wilcox reservoir based on an integration of seismic data, core data, and various Earth modeling techniques, is in continual iteration with ongoing drilling of development wells at Jack/St Malo—a relationship that bears great relevant-time fruit for a project that is still low on the technology maturity scale.
The plan also includes supplemental projects that are being advanced within a business unit if they are required to maintain alignment with major capital project milestones. Managing technology projects outside of the ETC carries the challenge of ensuring rapid and broad deployment beyond the GOM. For this reason, such supplemental projects involve ETC personnel in their development. Regardless of where the technology management resides, project leaders often leverage involvement from partners such as other energy companies, top universities, service providers, and national laboratories.
Governance
Similarly to the focus area, governance bodies—decision review boards and technology management teams—across the Chevron enterprise, the GGOM Wilcox Challenge Technology Workgroup (TWG), and Technology Steering Team (TST) strive to ensure that relevant business and technology company personnel are appropriately engaged in the delivery of technology. While participants in the focus area governance bodies necessarily represent all Chevron business units, the governance bodies of the GGOM Wilcox Technology plan are focused on the business needs of the two GOM business units. To ensure alignment between the GGOM plan and the focus area process and that the needs of the GGOM are addressed as the focus area process determines common-good funding, GGOM TWG and TST members are common members of the governance of the key focus areas whose portfolios impact the Wilcox challenge.
The GGOM Wilcox Challenge Technology Plan’s model of governance, which complements the enterprisewide, common-good focus area framework, contains three levels.
- Sponsors: Provide strategic business direction and cross-business unit/technology company endorsement of the plan.
- Technology Steering Team: Defines business opportunities, sets plan objectives, and prioritizes technology topic areas (TTAs) to be monitored and provides resources for and monitor of the execution of the plan; the plan owner leads this body and the TWG.
- Technology Workgroup: Provides a business conduit and technical guidance to the plan owner and TTA focal points.
The following are some of the key responsibilities of members representing those bodies:
Plan Sponsor
- Reviews quarterly status updates and assess whether the technology plan is on track to meet objectives and whether key stakeholders are sufficiently aligned.
- Recognizes efforts of the technology practitioners and governance body members.
- Communicates status upward to upstream and technology executive management.
Plan Owner
- Identifies linkages/interdependencies between TTAs. For example, a technology being advanced for improved recovery, such as the development of high-reliability electric submersible pumping systems for subsea wells, must be viewed in parallel with reservoir surveillance technologies that might need to compete for space in the bore of a subsea tubing hanger.
- Ensures that the full TST is aligned with respect to the identification of projects to be tracked as part of the plan and that each project has defined project management and a decision-making body and has identified specific, relevant milestones that meet a business intersection. Such a business intersection might be the lock down of the basis of design for a major capital project so it can include the technology in frontend engineering and design.
- Clearly communicate technology plan progress to the GGOM technology sponsors.
TST Member
- Endorses or challenges the prioritization, alignment level, and progress of projects as determined by the TWG.
- Acts as liaison to local management, ensuring key challenges are being addressed at a pace to intersect the business.
- Recognizes accomplishments and recommends corrective action.
TWG Member
- Identifies, evaluates, and scopes out technology projects for inclusion in the plan on the basis of knowledge of the challenges in their business units.
- Checks progress of each topic that affect their organization and facilitates required technology project engagements with their organization.
- Recommends which projects should be tracked within the plan.
Technology Topic Area (TTA) Focal Points (Select Business Unit Representatives of the TWG)
- Maintains clear lines of communication with managers of individual projects within a TTA.
- Updates their portion of the plan quarterly, including progress of all projects against milestones, to support quality discussion at TTA alignment sessions and TWG meetings.
Concluding Observations
The following are some of my key observations as plan owner for the past 26 months:
- The structure of the plan allows technology practitioners to clearly see the importance of their role in the success of Chevron (through having ready access to engineers and line managers in the business units or by being recognized for their contributions). Individuals generally thrive when they clearly see that their technology work addresses the needs of people in the business units and thus don’t find themselves in the predicament of having to find a problem for their solution.
- Engagement of all stakeholders is critical. While the number of people with defined roles in the plan is significant (more than 30), many more employees and business partners outside the governance bodies are impacted by the plan’s ongoing work. Ensuring that the latter community knows how to infuse its ideas and feedback into the technology planning process is critical and is best handled through multiple means of communication (e.g., websites, town-hall presentations, articles in newsletters).
- Persistent challenges do not always require a new solution; sometimes a new application of existing technology will suffice (such as the marinization of rotodynamic pumps for boosting produced fluids from the seabed to a host). In certain other cases, technology that has been prototype-tested successfully in the past but has lain dormant can be resurrected. Chevron’s development with its partners of dual-gradient drilling technology is a prime example of such a project, successfully deployed over a decade ago, that finally became commercial late in 2012.
- The Wilcox reservoir will require continually more elegant solutions. One of the crowning achievements to date within the portfolio was Chevron’s first commercial run of a system whereby multiple Wilcox reservoirs were able to be frac-packed without making individual round trips with screens, packers, and service tools. More than 5 years in the planning, and benefiting from field trials in partnerships with three of Chevron’s North American business units, the technology was successfully installed in a deepwater well—saving precious days of expensive rig time and cost. As a testament, though, to continual improvement, more than a year ago, a technology project began developing the next generation of the company’s Wilcox lower completions, maintaining the efficiencies of the system recently run but providing enhancements in reservoir surveillance and, ultimately, reservoir management.
- It never hurts for practitioners to feel some pressure—to know they are accountable. One technique for this is well known to any project manager—having clear milestones, linked to a responsible party, that are transparent to those who review plan progress. Specific, relevant milestones allow for communication and recognition of successes or course correction.
