Discovery to development: a subsurface case history of the Kitan Oil Field, Timor Sea, Joint Petroleum Development Area, Timor-Leste and Australia

Between 1990 and 2009, the mean time from field discovery to first hydrocarbon production in the greater Asia Pacific was nine years (Shuqiang, 2010). In this regard, the Kitan Oil Field development has been a successful endeavour for Eni and partners, with the fast tracking from discovery to production in 3.5 years being one of the project highlights.

The Kitan Oil Field is located in the northern Bonaparte Basin in the Timor Sea in the Joint Petroleum Development Area (JPDA) 06-105 Production Sharing Contract (PSC) (Fig. 1).

Fig. 1.  Kitan Oil Field location map.

After acquiring an interest in the PSC, Eni immediately reinterpreted the Kitan prospect using a pre-stack depth migration (PSDM) reprocessed cube from the Ikan 3D seismic survey. Subsequent volumetric, risk, and economic analysis highlighted the potential in the Kitan prospect and resulted in the joint-venture partners (JVP) approving the drilling of Kitan-1.

Kitan-1 was spudded on 8 January 2008 to test a three-way dip-closed and tilted-fault block. The well intersected gross and net oil columns of 48 m and 27 m respectively in the Jurassic Laminaria Formation with an oil-water contact (OWC) at 3,380 m subsea (mSS). A drill-stem test was performed and the well flowed at a rate of up to 6,100 barrel oil per day (bopd) of under-saturated 59.5° API oil in a 95/8″ production liner on a 32/64" choke. Kitan-1 was plugged and suspended.

Following the success at Kitan-1, a decision was made to appraise the Kitan discovery without delay and Kitan-2 was spudded on 4 March 2008. Kitan-2 is located 1.5 km east from Kitan-1 and up dip and closer to the northerly-bounding fault. Kitan-2 confirmed gross and net oil columns of 72 and 55.2 m respectively in the Laminaria Formation with the same OWC and pressure regime as Kitan-1 (OWC 3,380 mSS).

The results from the back-to-back drilled exploration and appraisal wells successfully demonstrated good reservoir correlation, the same oil type, the same OWC, strong evidence of oil-to-oil continuity, and a highly productive reservoir. The JVP were satisfied that sufficient quality data had been acquired to justify submitting a declaration of commercial discovery only three months after spudding the first well.

The JPDA 06-105 Joint Venture duly submitted a declaration of commerciality and proposed development area for Kitan on 11 April 2008 to the governing body of the JPDA in Timor Leste, the Autoridade Nacional do Petroleo (ANP). The development area was approved on 19 May 2008, which automatically established a maximum 12-month window for submission of the field development plan (FDP), in accordance with the PSC terms.

With the successful exploration and appraisal results in hand and the development area approved, together with the assurance provided by several analogous commercially successful oil fields in close proximity, the JVP had the confidence to implement a plan to fast track the development of the Kitan Oil Field.

The concept selection phase was started in August 2008. After several sensitivity runs and studies, the concept selection phase was concluded with the preferred development strategy for the Kitan Oil Field consisting of three vertical producer wells with intelligent completion and gas lift. A reference development case was generated and the concept definition phase commenced in January 2009.

With the short deadline for FDP submittal, the subsurface modelling focus was given to the factor identified as having the greatest uncertainty and biggest influence on field volumetrics—specifically that of accurate depth mapping. Three structure maps—low, base, and high—were generated based upon optimistic and pessimistic seismic interpretation; they were also used as input for static and dynamic modelling and production forecasting. Low, base, and high case reserve estimates were reported in the FDP and used for planning. Importantly the low case reserves still indicated a good commercial result and gave confidence to submit the FDP for approval and move to execution phase.

It took more than two years from discovery to obtain FDP approval. The project could now move from concept select and definition to the execution phase, starting with the development drilling.

A summary time-frame of the Kitan project with key dates is shown in Fig. 2.

Fig. 2.  Kitan Project schedule.

Development drilling commenced in June 2010. Four development wells were drilled, three ready for completion, and one plugged and temporarily suspended. The rig stayed on location to perform the batch completions and clean up flow tests, leaving the production wells ready to be tied back to the floating, production, storage, and offloading (FPSO) facilities, which arrived on location in July 2011.

The Plover and Laminaria para-sequences can be correlated across the Kitan Field (Fig. 3). The importance of the stratigraphy was considered with the well and completion design. Laminaria Unit-2 demonstrated better reservoir quality than Unit-1 and, thus, has better predicted production performance. Perhaps more importantly, the flooding surfaces may act as baffles or barriers to fluid flow. Perforation was required in each zone to ensure effective sweep of the entire sequence. The most significant event within the Laminaria Formation is the 5–8 m claystone and siltstone that separates Laminaria Unit-1 and Unit-2, this event can be correlated region wide and is probably a more noteworthy flooding episode. This layer was assumed in the geological reservoir model to act as a production barrier and sealing in a production time frame.

Fig. 3.  Reservoir correlation of Kitan development wells, Datum TVDSS.

The Glas Dowr FPSO, owned and managed by Bluewater Ltd., arrived on location in July 2011 for commissioning after modifications in Singapore. Installation of flowlines, risers, and umbilicals between the wells and the FPSO began in September and, following final commissioning activities, first oil production was achieved on the 10 October 2011. The Glas Dowr FPSO has a crude storage tank capacity of 674,800 bbls, with total liquid production capacity of 50,000 bpd, oil production capacity of 40,000 bpd, and water-production handling capacity of 35,000 bpd.

The Kitan completion is an intelligent design incorporating 5.5" tubing and gas lift, allowing each of the main reservoir zones to be produced individually or co-mingled. A strong aquifer support is observed in the nearby fields. Intelligent completion design was adopted to reduce and manage the water production coming from the two Laminaria Units (Unit-1 and Unit-2) by controlling the different downhole flow control valves (Yokote et al, 2012).

Collectively, the Kitan Oil Field maintained an oil production plateau for about nine months from October 2011 to June 2012. This was six months longer than pre-production base case-modelling expectations. It was for this reason the geological and dynamic model were revisited with a different depth conversion technique used for the reservoir structure map.

Kitan-5 was the first well to have water production breakthrough in early December 2011. In April 2012, Kitan-5 lower FCV was closed and water production stopped from this well. Kitan-3 and Kitan-2ST1 water break through occurred in late February 2012 and August 2012, respectively.

Oil production from the Kitan Oil Field started in October 2011, about 3.5 years after discovery. The Kitan development project, although analogous to nearby fields, was technically challenging, particularly given the relatively short time frame of execution. The main factors that have led to this development project being suitable for fast tracking were:

1. excellent exploration and appraisal results and data acquisition;

2. relatively small oil field;

3. close proximity to proven successful and analogous oil fields;

4. prompt completion of studies;

5. pre-production low case recovery estimates being economic, enabling long-leads items to be purchased before the final investment decision (FID);

6. PSC terms and conditions;

7. technically and commercially aligned JVP; and,

8. supportive external stakeholders, in particular the ANP.

The observed differences in geology and productivity of Laminaria Unit-1 and Unit-2 have been considered by developing the field with vertical wells and using intelligent completion to allow downhole flow control in the two units.