26 Oilfield Review

Brian A i n l e yD avid ClouseDon HillTulsa, Oklahoma, USA

Mike CatrettNalco/Exxon Energy Chemicals, L.P.Sugar Land, Texas, USA

Greg Ku b a l aSugar Land, Texas, USA

For help in preparation of this article, thanks to BrianDarling, Jon Elphick, Terry Greene, Tom Griffin and Jo eM i l l e r, Dowell, Sugar Land, Texas, USA; Jim Th o m p s o nand Terry Whittle, Dowell, Tulsa, Oklahoma, USA; andBill Bailey, Brent Diez, Melody Lindley, Jeff Schiller andS t e ve Sears, Nalco/Exxon Energy Chemicals, L.P., SugarLand, Texas, USA.

The old expression ”garbage in, garbageout” has particular meaning when appliedto oil and gas reservoirs. Hydrocarbon-bearing formations are highly susceptibleto damage and plugging from a variety ofs o u rces—both natural and induced. Th epermeability and porosity of virgin reser-voirs may be altered dramatically unlessdrilling, completion and interve n t i o np ra ctices are conducted with the utmostdiligence and attention to detail. If not,well productivity and ultimate reserver e c overy suffer, while field maintenance,wo r k over and environmental protectioncosts skyrocket.1

M a ny services performed in the oil fieldrely on specialty fluids and additives thatfulfill specific functions within the wellboreor formation. This article describes the typesof specialty chemicals that are employe ddaily to drill and treat oil and gas wells andh ow a perva s ive focus on their quality, relia-bility and delive rability is helping opera t o r sget the most from field deve l o p m e n t s .

Specialty Chemicals in the Oil Field

Achieving greater oilfield efficiency

and productivity depends on wellsite

operations that cost-effectively maximize

re c o v e ry of oil and gas re s e rves, while

minimizing the impact on the

e n v i ronment. Pivotal to these operations

a re specialty chemicals

that impart unique capabilities and

functionality for well drilling, completion

and intervention services. The

last decade’s pro g ress in upgrading

chemical quality, deliverability and

e n v i ronmental compliance is paying

o ff for operators in terms of field

performance and longevity.

Spring 1997 27

During the boom years of the late 1970sand early 1980s, attention to chemical qual-ity control and performance consistencywas often lax. Operator and service com-p a ny personnel and facilities were stretch e dto the limit just getting wells drilled andtreated on schedule without costly mistakes.Often, there was simply insufficient time tofine-tune field formulations to ach i e ve opti-mal results. The same was true for ch e m i c a lsuppliers, working all-out to satisfy demandfor their products during a period of peaka c t iv i t y. There was little chance to concen-t rate on improving in-plant production anddistribution procedures.

The situation was complicated further byg r owing demand for more sophisticated flu-ids. Over the years, simple fluids had give nway to more complex ones. By the time thetotal depth of a well was reached, for exam-ple, a drilling mud might contain 20 ormore distinct chemical types, many ofwh i ch had been added to offset the effectsof other components present during earlierphases of drilling. A large number of addi-t ives means that a complicated set of ch e m i-cal and physical interactions have to bethoroughly analyzed before the impact ofthe total fluid system on the formation canbe understood.

Rising to the ChallengeFo l l owing the mid-1980s oil crisis, a newquality drive emerged throughout the oilf i e l d — r e i n f o rcing industry efficiency andp r o d u c t ivity initiatives already in place.These initiatives first led operators and ser-vice companies to restructure and stream-line their operations in an effort to improvep r o f i t a b i l i t y. Industry-wide consolidationand a refocusing on core competenciesaccompanied a host of cost-reduction steps.

When attention then turned to prov i d i n ggreater quality and value in each phase ofthe business, operators—concerned aboutthe need to concurrently lower costs andi m p r ove well performance—began request-ing more detailed information about thechemical additives present in fluids beingpumped by service companies. Servicecompanies, in turn, demanded more infor-mation from their chemical suppliers.

At the same time, a rising tide of publicand governmental concern about health,safety and environmental (HSE) issues—from personnel exposure to potentiallyharmful materials in chemical plants and atthe rigsite, to protection of marine life andaquifer quality—prompted a concertedr e e valuation of oilfield chemicals and their

■Categories of specialty oilfield chemicals used at the wellsite. Hundreds of diff e rent chemical compounds are pumped downhole dur-ing the lifetime of a typical oil or gas well. Specialty additives provide the necessary fluid properties re q u i red for basic drilling, cement-ing, completion, stimulation and production operations at bottomhole temperatures and pre s s u res. Although the most important addi-tives vary from well to well, those listed here re p resent a typical set.

1. Kruger RF: “An Overview of Formation Damage andWell Productivity in Oilfield Opera t i o n s ,” Journal ofPetroleum Te ch n o l o g y, (February 1986): 131-152.

2. Drilling, Completion and Wo r k over Fluids; Cement-ing; Fracturing; and Acidizing supplements to Wo r l dO i l ( 1 9 9 6 ) .

3. H awkins GW: “Laboratory Study of Proppant-Pa ckPermeability Reduction Caused by Fracturing FluidsC o n c e n t rated During Closure,” paper SPE 18261, pre-sented at the 63rd SPE Annual Te chnical Conference& Exhibition, Houston, Texas, USA, October 2-5,1 9 8 8 .

The Role of Specialty Oilfield Chemicals Well drilling, completion, treating andwo r k over fluids perform to their utmostbecause of the specialty chemicals that areadded to impart unique properties and func-t i o n a l i t y. These chemicals fall into a broadvariety of categories, with a staggering ove ra l lnumber of different compounds and blends( b e l ow ) . If designed and manufactured toproper physical and performance standards—defined and confirmed through extensivefield application—specialty ch e m i c a l sbecome invaluable solutions to ove rc o m eproblems that plague oil and gas wellsthroughout their lifetimes.2

If these chemicals are prepared, stored,mixed or pumped incorrectly, how e ve r, theycan become a well’s worst nightmare—leading to significant problems, such asplugging or precipitation, because of thepresence of, and interactions caused by,inferior materials. Whether it’s a drillingfluid that causes excessive formation dam-age (see “A New Slogan for Drilling FluidsE n g i n e e r s ,” page 2) or a fracturing fluid thatl e aves flow-restricting polymer residue inthe proppant pack, increased costs, reducede f f i c i e n cy and lower profits can be the endresult of faulty selection or application.3

effects on both the surface and subsurface.A host of regulations that had impacted oil-field operations since the 1970s and newlegislation, enacted principally within theUSA and the North Sea, combined to dra-matically affect chemical approval, usage,handling and disposal ( b e l ow ) .

G overnmental decrees, coupled with thei n d u s t r y ’s commitment to doing business ina more open manner, focused increasedattention on fluids pumped into a well ord i s charged in the vicinity of the wellsite.O p e rators wanted details of any pra c t i c e swith potential negative impact so that theycould fulfill obligations to regulatory agen-cies and answer questions from env i r o n-mental groups.

Specialty chemical suppliers were facedwith a wide range of challenges andqueries. To their credit, they reacted sw i f t l ywith a well-directed, comprehensivea p p r o a ch. As a result, there have beentremendous strides over the past decade inproduct quality control, reliability, delive r-ability and HSE compliance ( a b ove )

During the 1990s, the drive for continuousi m p r ovement and higher standards has ledthe oil field beyond regulatory compliance.The industry now expects more from itselfand has begun to evaluate resource con-sumption and environmental burdens asso-ciated with oilfield activities. The concept ofsustainable development—a belief thato p e rators and service companies can meet

the wo r l d ’s energy needs without compro-mising the environment for the future—isbeing employed at all levels to integra t equality and HSE goals into eve r y d ay busi-ness strategies and action plans. This evo l u-tion has been documented in over 350papers published since 1992.4

The Modern Specialty Chemical PlantChemical manufacturing and blendingplants are now operated to much stricterstandards, with broader ch e cks and balanceson product quality. A dvanced process con-trol and optimization of reaction conditionsh ave improved product reproducibility andincreased product cost-effectiveness. In-plant safety and environmental awa r e-ness, packaging and inventorying, and distri-bution practices have been scrutinized andu p g raded. At the same time, research con-ducted by service companies and specialty

chemical manufacturers has led to a newcrop of innova t ive, value-added materialsand application methods that have extendedthe capabilities of well operations to deeper,higher temperature and higher pressuree nvironments (next page).

■Market drivers and industry response. The oil crisis of the mid-1980s sparked major eff i-ciency and productivity actions within the industry—highlighted by re s t r u c t u r i n g ,s t reamlining and cost-reduction steps. Next came a concerted push for improved quality,value, perf o rmance and HSE compliance in products and services that has been re a l i z e dt h rough broad initiatives by specialty chemical manufacturers and service companies.

■E n v i ronmental actions impacting theapplication of oilfield chemicals. The USAhas been the leader in enacting legislationp rotecting the environment, with many ofthe major milestones shown on the timeline. Several regulations have directly ori n d i rectly influenced the use of specialty oil-field chemicals. As the United Nations (UN)and other organizations re p resenting coun-tries around the world became involved,the impact broadened, as shown by mile-stones designated with an asterisk(*).

F rom 1880 to 1960, the US Congre s spassed a total of eight acts related to thee n v i ronment. Six more followed from 1960to 1969. From 1970 to 1990, however, thet rend accelerated dramatically, and 50acts were passed—ranging from the cre-ation of the Environmental Pro t e c t i o nAgency (EPA) to establishment andamendment of the Superfund Act. In addi-tion, international actions by OSPA R C O M —the Oslo and Paris Commissions for the Pro-tection of the Marine Environment of the

Northeast Atlantic—set the foundation forlaws governing protection of oceans andcoastlines from hydrocarbons, and re g u l a-tions for disposal of off s h o re platform s .

US laws intended to preserve unex-ploited natural wilderness and wetlandsa reas have reduced or prevented seismicactivity in certain areas and prompted thedevelopment of sophisticated seismic andw i reline tools and software to limit enviro n-mental impact. Air and water emissionand waste restrictions have led to

4. O ver 90% of the papers cited were presented at the:S P E / U KO OA European Environmental Conference,Aberdeen, Scotland, April 15-16, 1997.The Third International Conference on Health, Safetyand Environment, New Orleans, Louisiana, USA, Ju n e9-12, 1996.The Second International Conference on Health,Safety and Environment, Jakarta, Indonesia, Ja n u a r y25-27, 1994 and published in: “E nvironmental Considera t i o n s,” SPEreprint series, no. 37, 1992.

and 1980, respectively, it took severalyears for the agencies involved to pro m u l-gate enforceable regulations. Oil and gasE&P activities were exempt from these re g-ulations during the industry’s re s t r u c t u r i n gperiod in the mid- to late-1980s. In re t u rn ,9.7 cents of each barrel of produced orimported oil went to Superf u n d .

In the North Sea, actions by OSPAR-COM have impacted exploration, drilling,cementing and stimulation practices.Drilling fluids have moved from oil-base

■The modern oilfield chemical plant. Today’s facilities bear only passing resemblance to those of 15 years ago. In-plant logistics have been improved. Adoption of ISO quality standards, computer control of reaction and blendingp rocesses, and advances in packaging, warehousing and tracking have combined with heightened HSE aware n e s sand product optimization studies to increase plant throughput and product quality.

i m p roved techniques to decrease or elimi-nate unwanted off-gas and water pro d u c-tion. Disposal considerations havechanged the nature of oilfield chemicalpackaging from small, disposable contain-ers to large, reusable containers. Radiationlaws have spurred development of surf a c eand downhole tools that rely on nonra-dioactive instead of radioactive sourc e s .

In the US, the dominant laws aff e c t i n gthe oil field have been RCRA and CER-C L A / S u p e rfund. Although passed in 1976

to synthetic or water-base systems. Stimu-lation treatments now include corro s i o ninhibitors, crosslinkers and other additiveswith lower toxicity.

On a global basis, developing nationsa re facing similar environmental issues.Chile, for example, is expected to issuee n f o rceable environmental re g u l a t i o n slater this year. Many countries are consid-ering requiring ISO 14000 or a similar stan-d a rd as a management system to fosterp roactive, beyond-compliance enviro n-mental activities.

30 Oilfield Review

■Material flow for liquid ( t o p ) a n d dry (bottom) p roducts. The logistical complexity of specialty chemical manufac-turing facilities has prompted studies targeted at optimizing material flow and sequencing within each sector of theplant to improve product scheduling and deliverability.

Spring 1997 31

G iven the number of raw materials, reac-tion intermediates and finished products—along with packaging, labeling and stora g eoptions—specialty chemical manufacturingplants are among the most logistically com-plex facilities to be found any where in theworld. To d ay ’s plants have adopted qualityand productivity programs that have beenp r oven to be effective in other industries.Some have been introduced out of neces-s i t y, due to the complex nature of the opera-tion. Others are a direct result of applicationof general quality standards, while still oth-ers reflect guidelines established throughInternational Standard Organization (ISO)certification or mandated by env i r o n m e n t a lr e g u l a t i o n s .5

Compared to a decade ago, materials flowhas been streamlined to simplify in-plantlogistics and support new product delive r yconcepts, such as just-in-time manufactur-ing. For both liquid and dry products, theoptimization process has affected theamount of space allocated to various func-t i o n s — s u ch as raw material receipt and stor-age, reaction and blending, packaging, fin-ished product storage and shipment—aswell as their proximity and interactions ( p r e-vious page). The result: increased plantthroughput, greater productivity of plantpersonnel, improved product delivery andshortened order lead times.

For example, 89% of all North A m e r i c a nfield orders are now shipped within twod ays from the Dowell specialty ch e m i c a lplant in Tulsa, Oklahoma, USA, a 33%i m p r ovement from the three-day ave rage afew years ago. Shipments to overseas loca-

tions typically take two weeks today, insteadof the previous three ( a b ove ) .

Better packaging techniques for liquidproducts have greatly improved accura cy.Instead of filling containers according tovolume, wh i ch is subject to variations of +/-1% based on the temperature of thematerial at the time of loading and otherfactors, weight has become the standard.State-of-the-art mass flowmeters provide ana c c u ra cy within 0.15%.

■The Dowell Chemical Manufacturing Plant in Tulsa, Oklahoma, USA. This facility, which achieved ISO 9002 certification in 1992and ISO 9001 certification in 1996, has one of the most consistent product on-time delivery records in the specialty chemical manu-facturing business.

5. The International Standards Organization, based inG e n e va, Switzerland, is the main body that has estab-lished quality procedures and controls adopted by theoil and gas industry. Its ISO family of programs havebecome the recognized standard for a quality system.

32 Oilfield Review

The combination of packaging improve-ments, along with less off-specificationmaterial produced and tighter quality con-trol, has meant fewer product returns fromthe field and more satisfied customers. A nadded benefit is minimization of waste atthe wellsite and at the manufacturing plant.

Equipment and logistics improvements areonly part of the story, how e ve r. There hasalso been a revolution in information sys-tems and organizational work pra c t i c e s .Te chnological advances in linked computersystems and software, increased interve n t i o nby regulatory agencies and an emphasis onreduced inventory levels have been instru-

■Change in plant organizational structure. The traditional distributed organization ( t o p ) is giving way to an integrated, concurre n ts t r u c t u re ( b o t t o m ) that will be composed of self-directed work teams dedicated to particular process streams within the plant. This struc-t u re will empower employees to become intimately involved in all aspects of quality control and quality assurance pro g r a m s .

■Just-in-time manufacturing flow. Just-in-time production is generally defined as a sys-tem of managing operations with little or no delay time or idle inventories between onep rocess and the next. Modern specialty chemical plants have improved raw materialflow and chemical production by adopting just-in-time processes similar to those used insmall-parts manufacturing plants. Just-in-time production is most evident in a continuousp rocess in which material arrivals are timed to coincide with the production run. Batchp rocesses vary from this methodology along the following lines:

• For high-volume products purchased by many customers, some finished pro d u c t sa re typically held in inventory, but with a minimum trigger level that causes addi-tional batches to be scheduled to maintain that level.

• For medium-volume products, a plant typically carries inventories of the raw materi-als. Products are not made until an order is re c e i v e d .

• For low-volume products, particularly those sold to a single customer, the only rawmaterial inventories are those used in other, high-volume products. When a cus-tomer orders the product, the plant, in turn, orders the raw materials specific to thatp ro d u c t .

• High-volume raw materials have a minimum trigger level for re o rdering, but low-volume raw materials are ord e red only as needed.

Spring 1997 33

mental in driving improvements in plante f f i c i e n cy. These changes have occurred inboth supplier plants and customer facilities.

O r g a n i z a t i o n a l l y, major gains are beinga ch i e ved by encouraging people on theplant floor to directly influence productquality and delive ra b i l i t y. Rather than sepa-rating functions as in the past, there is am ove toward self-directed work teams thatoversee all aspects of the planning, prepara-tion, packaging and shipping of particularproduct streams. This concurrent organiza-tion instills a sense of pride and ow n e r s h i p ,not unlike the strides that have beena ch i e ved in automotive assembly. Po t e n t i a lproblems are caught sooner. Employees aree n c o u raged to submit suggestions for furtheri m p r ovements, with a promise of ra p i dmanagement review and response ( p r e v i o u spage, top).6

In total, there have been a multitude ofchanges that are having pronounced bene-fits both for plant and field operations. Th eremainder of this article focuses in greaterdepth on four:Within the plant—

• I m p r oved delive rability using just-in-time principles

• Quality control through organizationaland informational ch a n g e s

• Chemical product reformulation At the wellsite—

• Minimizing waste disch a r g e

I m p roved Deliverability Using J u s t - i n - Time PrinciplesM a ny service companies and other specialtychemical customers now place smaller, morefrequent orders with shorter lead times,t h e r e by reducing their inventories and carry-ing costs. For many plants, the volume ofchemicals shipped has not changed appre-c i a b l y, but the number of orders hasincreased significantly. Manpower and costsassociated with order processing are linkedmore closely to the number of orders, ra t h e rthan order size. Thus, chemical suppliersh ave adopted more sophisticated means ofprocessing orders to keep from increasingstaffing levels. This has led to adoption ofjust-in-time manufacturing principles at facili-ties like the Nalco/Exxon Energy ChemicalsPlant in Sugar Land, Texas, USA ( a b ove ) .7

In the current marketplace, service compa-nies strive to minimize inventories and applymore sophisticated scheduling and inve n t o r ymanagement methods. This is contrary to tra-ditional practices in wh i ch large inve n t o r i e swere maintained to avoid running out ofmaterials. To d ay, without an inventory cush-ion, on-time shipments become critical, andthe communication link between supplierand customer must be flaw l e s s .

On the manufacturing side—with a singleplant producing as many as 500 productsstarting from as many raw materials—inve n-tory costs are significant. Methods to mini-mize raw material inventory can be key tokeeping production costs low. The 20/80rule-of-thumb applies—about 20% of theraw materials are used in about 80% of theproducts. The balance may be used onlyoccasionally—with most of the remainderappearing in only one to three products.Large inventories increase the probability ofove r s t o cking, with a corresponding negativeimpact on ove rall costs.

Production scheduling formerly was “eye-balled” by an experienced individual basedon historical norms. For just-in-time produc-tion, scheduling requires integra t e ddatabases that tra ck customer orders, pro-duction status, raw materials in plant inve n-tory and in transit, equipment constra i n t s ,and environmental regulations that limitwh i ch products may be made in wh i chpieces of processing equipment ( p r e v i o u spage, bottom).

■The Nalco/Exxon Energy Chemicals Plant in Sugar Land, Texas, USA. Nalco/Exxon wasone of the pioneers of just-in-time specialty chemical manufacturing for the oilfield mar-ket and an innovator in applying new informational systems. The Sugar Land plantreceived ISO 9002 certification in 1992.

6. Duncan E, Gervais I, Le Moign Y, Pangarkar S, StibbsB, McMorran P, Nordquist E, Pittman T, Schindler Hand Scott P: “Quality in Drilling Opera t i o n s ,” O i l f i e l dR e v i e w 8, no. 1 (Spring 1996): 20-35.

7. S chonberger RJ: Building a Chain of Customers: Link-ing Business Functions to Create a World-Class Com-p a ny. New York, New York, USA: The Free Press,1 9 9 0 .

34 Oilfield Review

Traditional product costing tends to beb a t ch-based, driving production to largerb a t ches and increased inventories. Newmethods had to be developed to reflect thetrue cost structure more accurately in achanging market. With the trend to smallerb a t ch sizes and quicker equipmentch a n g e over to meet order demand, the tra-ditional chemical production line hase vo l ved into something more akin to asmall-parts assembly line.

Large general-purpose reaction and blend-ing vessels with long batch times are usedless frequently. Instead, smaller vessels withrapid turnover—segregated to similar pro-cess families to reduce waste and wa s h-ing—are now the mainstay of plants, alongwith automated in-line blending equipmentfor selected product/chemistry lines. Com-puter systems throughout the productionfacility now bring up-to-the-minute informa-tion, such as batch status and inventory con-sumption, directly into the sch e d u l i n goffice, moving plants like Nalco/Exxont oward a make-to-order facility.

Pa ckaging and labeling are additionalareas that have seen radical change. Prod-ucts are shipped in a variety of pack a g etypes and sizes, including traditional 55-gal[208-L] drums, returnable tote tanks anddisposable containers, such as small pails.Returnable tote tanks represent an addi-tional capital resource and require somea l t e rations to the normal manufacturing andp a ckaging cycle. As we will see later, how-e ve r, substantial ove rall cost savings ande nvironmental benefits result from their use.

M a ny customers demand customized con-tainer labeling to fit their facility and inve n-tory management needs. Bar coding oncontainers and portable ra d i o - f r e q u e n cyreaders make storage and access easierwhen dealing with numerous, random loca-tions. Tra cking becomes critical in optimiz-

ing warehouse space and managing mini-mum inventories, wh i ch in many cases maybe only a few containers. Bar coding alsoreduces random errors in shipping, some-thing to be avoided at all cost in a reduced-i nve n t o r y, just-in-time delivery market.

Quality Control Through Org a n i z a t i o n a land Informational ChangesAs noted earlier, fundamental changes inorganizational work practices havei m p r oved production efficiency for specialtychemicals. The quality and ISO processesp r ovide structure in what used to be a rela-t ively unstructured business and form thebasis for a set of recognized guidelines anda common operating language for rawmaterial vendors, chemical manufacturersand clients.

This common approach has led to a majora dvance in product quality assura n c ethrough application of standardized testmethods, as well as procedures for equip-ment calibration and maintenance. Byreducing the testing required to statisticallyvalidate processes, cycle times have beendecreased ( a b ove). The ISO structure, by itsvery nature, provides a means for betterassimilating the increasingly complex infor-mation that is being generated, defining dis-ciplined standards and tools for data organi-zation that allow productivity improve m e n t sin a diverse, dynamic business env i r o n m e n t .

In the past, it was difficult or impossible toset product specifications and define rawmaterial evaluation methods that were mutu-ally agreeable to raw material suppliers, spe-cialty manufacturers and clients alike. To d ay,as a result of adoption of quality processes,specifications are routinely established anddiligently adhered to. Raw material ve n d o r sunderstand that their performance will becontinually monitored using a comprehen-s ive set of criteria—where price is only onep a ra m e t e r. Other factors include on-timed e l ive r y, correct labeling, correct loading inthe delivery truck, completeness of paper-work, and container condition. In combina-tion, these data provide input to a rating sys-tem in wh i ch each supplier’s performance isdetermined, compared to a site standard andthen ranked against the performance of othervendors. A critical part of the process is pro-viding comprehensive feedback to ve n d o r son areas for improvement. If noncompliancewith site standards occurs, formal writtendocumentation outlines the deficiencies andrequests explanation of causes and prov i s i o n sfor short-term fixes and longer-term solutions.The rating system is useful for other purposesalso, such as identifying suppliers who con-sistently exhibit superior performance andmight be considered as candidates to partici-pate in alliances (next page, top).

Multifunctional teams—including repre-s e n t a t ives from research, marketing, engi-neering, purchasing, quality assurance andH S E — e valuate and select vendors. For criti-cal high-volume products, clients may alsobe invo l ved in the vendor selection process.The multifunctional team, in conjunctionwith a similar team from the ve n d o r, deter-mines the product specifications, qualitya s s u rance testing procedures and communi-cations protocol.

These specifications and quality assura n c edata are compiled into a common informa-tional database that also includes opera t i n gprocedures, health and safety information,maintenance records and the most recente nvironmental regulations. With netwo r k e dcomputers, employees throughout the planth ave access to the same, up-to-date infor-mation on raw materials and finished prod-ucts. Common databases allow plant

■Cycle-time history. By using just-in-time principles and changingf rom traditional business practicesbased on large-batch pro d u c t i o n ,specialty chemical plants have cutthe total cycle time to make anddeliver a product. These methodssignificantly reduce the timebetween receipt of an order andreceipt of payment after pro d u c td e l i v e r y .

Spring 1997 35

e m p l oyees to respond accurately andq u i ckly to client inquiries related to productmanufacture, testing, and env i r o n m e n t a lc o m p l i a n c e .

Changes in environmental regulations sig-nificantly affect specialty chemical plantsbecause of the wide variety of raw materialse m p l oyed and the types of products that aremanufactured. Just a decade ago, a plantwould have only a few environmental engi-neers, but today nearly half of the engineerswork on environmental issues and regulatorycompliance. Information on production andplant practices must be retained longer andin more detailed formats to comply with reg-ulatory guidelines. Networked computer sys-tems allow instant access to particular prod-uct information in the event of unannouncede nvironmental audits. Without linked infor-mation systems, data retrieval would be diffi-cult, slow and costly ( b e l ow ) . The qualityprocess has brought disciplined measuresand tools to help manage the collection anduse of massive amounts of data in this highlycomplex business.

Chemical Product Reform u l a t i o nS e ve ral forces drive the reformulation—orreengineering—of specialty chemicals. Th emost notable are the need to:

• i m p r ove performance• reduce cost• minimize safety or environmental

hazards.Chemical manufacturers and service

companies have addressed these reformu-lation problems singly and in combination,with a beneficial impact on wellsite execu-tion efficiency, well performance, environ-mental protection and ove rall ch e m i c a lusage and cost.

R e s e a rch studies targeted at improving theunderstanding of mechanisms controllingchemical interactions have led to revisedmaterial design specifications and exten-sions in functionality that allow field tem-p e rature and concentration ranges to bebroadened. Process optimization within

Vendor Certification Process

Initial analysis

Vendor’s productsFinancial healthLogistics capabilitiesReputationWorldwide supply position

QA exercise

Chemical plant team membersPurchasingQuality assuranceResearchEngineering

Vendor team membersPurchasingQuality assuranceResearchEngineering

Teams meet to determineProduct specificationsCommunications protocol

Pricing

Contract de velopment

■Vendor certification process. The vendorselection process includes an analysis ofthe raw materials, the supplier’s stability,the supplier’s shipping and timing capa-bilities, and finally price. Once a multi-functional team selects a raw materialvendor to supply a product, groups fro mthe vendor, chemical plant and often theend-user meet to determine raw materialand product specifications, quality assur-ance testing and logistics for shippingmaterials worldwide.

■P roductivity improvement using computers and databases. Part of the revolution in thespecialty chemical manufacturing industry has centered on information systems ando rganizational work practices, not just new equipment and chemical processes. Net-worked computers allow information about products to be retained with greater detailand retrieved more easily for compliance with environmental regulations. Through com-mon databases, information on production runs and product testing is immediatelyavailable to personnel in all areas of the plant.

36 Oilfield Review

specialty chemical plants—centered onp a rametric studies of reaction and blendingconditions such as temperature, pressure,exposure time and raw material additionsequencing—has increased product yieldand reduced byproducts. Product consis-t e n cy, reproducibility and reliability havei m p r oved, dovetailing directly with comple-mentary programs geared toward qualitycontrol and quality assura n c e .

New delivery methods that permitincreased additive concentrations and pin-point placement of materials, such asencapsulation techniques for fracturing fluidbreakers, have provided breakthroughs inpumping and treating procedures.8 M u l t i-functional additives have helped limit the

number of fluid components needed for ag iven functionality, thereby reducing com-p l e x i t y, simplifying chemical and phy s i c a li n t e ractions within the fluid and the forma-tion, reducing inventory requirements, andincreasing mixing and blending efficiency atthe wellsite.

Reformulation often is not elective — i tbecomes mandatory if one or more rawmaterials is restricted or no longer manufac-tured. To lower risk, especially for criticalchemicals that maintain well productiv i t y, itp ays to anticipate—particularly if ava i l a b i l-ity is limited to a single vendor and continu-ity of supply cannot be assured. In theseinstances, reformulation entails extensivetesting and evaluation of a suite of alterna-t ive materials from multiple vendors todetermine the most cost-effective replace-ment candidate. Care must be taken toensure that product performance does notsuffer and that there are no unexpected

handling or mixing constraints. Industry-wide, a concerted effort on product refor-m u l a t i o n has helped guarantee a continu-ous supply of labora t o r y - o p t i m i z e dproducts and spurred competitive pricingamong raw material vendors who offer sim-ilar product lines.

The oil crisis of the mid-1980s and enact-ment of environmental regulations haveundoubtedly had the greatest impact onspecialty chemical reformulation efforts.Chemical-cost reduction became a poten-tially quick and easy way to reduce wellsitecosts and improve profitability in the face ofdepressed oil prices. As with replacementmaterials that broaden production andd e l ivery capabilities, the main goal was tointroduce alternative, low e r-cost materialsthat do not demonstrate adverse effects,while still adhering to the product’s originalperformance specifications.

For example, a high-volume corrosioninhibitor used in matrix acidizing stimula-tion treatments could no longer be pro-duced because one of its key ingredientswas no longer available. Thorough labora-tory testing led to a suitable material thatsatisfied four objectives simultaneously,exceeding expectations established at theoutset. The price of the final product couldbe reduced by 18% due to lower raw mate-rial costs and the new inhibitor demon-s t rated better dispersability in acid—a keycriterion for product performance. Corro-sion rates on samples of well tubing show e dprotection equal to the existing material,and the reformulated product posedreduced handling and mixing hazards.

Product reformulation, how e ve r, takes onits most important aspect when safety ore nvironmental considerations come intop l ay. The basic chemistry of many specialtyoilfield products makes them potentiallyharmful if discharged into the env i r o n m e n t .Reducing their impact may require elimina-tion of materials banned by regulatory man-date or incorporation of components thatoffer reduced levels of toxicity. In bothcases, the choice of replacements must bes u ch that acceptable product performanceis maintained. When environmentally sen-s i t ive materials form part of the reformula-tion equation, the evaluation and testingprocess becomes more complicated than inthe case of replacing materials for cost or

■Decision tree used in the product re f o r-mulation process. Reformulating a pro d u c tto reduce cost or improve perf o rmance is atime-consuming task. When enviro n m e n-tal concerns become part of the equation,the process takes on additional complexityand re q u i res a comprehensive, stageda p p roach that focuses on product perf o r-mance, toxicity and biodegradability.

Spring 1997 37

performance reasons. Interplay amongcomposition, performance, toxicity andultimate environmental impact must beconsidered, requiring a phased approach todesign, testing, cross-ch e cking and applica-t i o n9 (previous page).

In 1995, a replacement program for specificproducts used in the North Sea was initiatedat the Dowell product center in Tulsa. The ini-tial objective was to replace eight ch e m i c a l s ,selected based on criteria established byclients and usage volumes. The goals were toeliminate any nonylphenol surfactants—wh i ch had been banned in selected areas ofthe North Sea—decrease product toxicityand improve biodegra d a b i l i t y.

Four products in particular—a stimulationsurfactant, acid-corrosion inhibitor, acid-gelling agent and brine viscosifier—requirede x t e n s ive reformulation work. Each pre-sented the team of chemists working on thep r o g ram with different ch a l l e n g e s — d i c t a t e dby chemical composition, complexity andintended use. For the stimulation surfactant,a suitable reformulated product was deve l-

oped that exhibited lower toxicity without asignificant loss in product performance. Fo rthe acid-corrosion inhibitor, an alternativeproduct showed improved biodegra d a b i l i t yfor all but one component, and dra m a t i c a l l yreduced toxicity. Reformulation of the acid-gelling agent resulted in a product withe q u ivalent performance, and eliminated then o nylphenol surfactant previously included.Studies of the brine viscosifier showed thatn ovel chemistry would need to be deve l-oped before a long-term solution could bea ch i e ved ( a b ove ) .

While this highly successful program isonly one example of numerous studiesbeing conducted within the industry, it wa salso time-consuming and expensive —requiring 18 months and costing about$75,000 US per product. Extending suchstudies to reformulate an entire slate of hun-dreds of specialty chemical products is amajor undertaking. It is critical to balancethe objective of improved env i r o n m e n t a lcompatibility with the cost and tech n i c a lrequirements invo l ved so that maximumbenefit can be ach i e ved in the most expedi-tious and cost-effective manner.

Minimizing Waste Discharg eD a i l y, millions of barrels of drilling andtreating fluids are pumped into wells aroundthe world. The industry’s goal is to pump theminimum volumes necessary to ach i e vedesign objectives—in other words, use thehighest-performing, most time- and cost-e f f e c t ive fluids possible. In most cases, thismeans minimizing the amount of fluid lostto the formation. In wells that contact signif-icant intervals of highly permeable forma-tions, this is no small challenge. Equallyimportant—since the introduction of strictere nvironmental rulings—is the reduction orelimination of waste streams at the surfacethat require treatment or disposal, particu-larly since this treatment or disposal may bevery expensive (next page).

D ownhole, progress in fluid design andspecialty additive formulation has pushedo p e rating limits forward. To d ay, we seedrilling fluids with lower static anddynamic filtration rates that still giveacceptable penetration rates; fracturing flu-ids with greater fluid efficiency, that allowthe creation of deeper, wider fractures atthe same stimulation treatment volume; andloss-controlled matrix stimulation fluids thateliminate wormholing and rapid acidspending, react with more formation sur-face area and provide an etching patternthat leads to greater stimulation.1 0

At the surface, from the spudding of a wellthrough completion, first oil or gas delive r y,and ongoing production, the industry hasd ramatically reduced the volumes of fluidrequired for disposal on and around thewellsite. Partially closed or completely self-contained, non-effluent drilling mud treatingsystems have eliminated the need foronshore reserve pits and offshore disch a r g e sinto the marine environment. The adve n t

■Results of product re f o rmulation efforts for the North Sea. Three products were re f o rm u-lated to improve environmental acceptability. Each new material showed lower toxicityvalues—as measured by EC50 standards on Skeletonema costatum ( a l g a e ) — a n di m p roved surfactant biodegradability. [* EC50 is a European Community-approved pro-c e d u re for measuring the toxicity of various chemicals to marine life. The EC50 value isthe concentration at which 50% of the species exposed to the chemical survive.]

8. Gulbis J, King MT, Hawkins GW and Brannon HD:“Encapsulated Breaker for Aqueous Polymeric Fluids,”paper SPE 19433, presented at the 9th SPE Fo r m a t i o nDamage Symposium, Lafayette, Louisiana, USA,February 22-23, 1990.

9. O’Neill JE and Hill DG: “Reduction of Risk to theMarine Environment from Oilfield Chemicals—Bal-ancing Environmental and Te chnical Needs,” paperSPE 35946, presented at the Third International Con-ference on Health, Safety and Environment in Oil andGas Exploration and Production, New Orleans,Louisiana, USA, June 9-12, 1996.

38 Oilfield Review

and routine use of continuous-mix systems,replacing batch-mix systems, have signifi-cantly decreased or eliminated tank bottomsby allowing on-the-fly preparation andd e l ivery of fluids with adjustable

p r o p e r t i e s .1 1 Continuous-mix processes cangreatly improve technical and env i r o n m e n-tal performance and represent the applica-tion of hazard control through engineeringa dvances and risk management.

Stimulation vessels operating in the NorthSea were among the first to employ continu-ous-mix tech n o l o g y. A typical stimulationtreatment may require up to 200,000 gal[ 7 5 7 m3] of hy d r o chloric acid containing avariety of chemical additives. Previously,materials were batch mixed up to a day ina dvance. The potential waste to be disposedof from tank bottoms could be as high as 15to 20% of the total treatment volume, or upto 80,000 gal [302 m3]. To d ay, with continu-ous-mixing methods, a similar size treat-ment generates no wa s t e .1 2

Of the various practices that have aidedthis process, one that has had a majorimpact is reduction in the number of dispos-able chemical containers—through recy c l i n gand alternative tech n o l o g y. Until the early1990s, 55-gal steel and plastic drums werethe preferred method for delivering liquids tothe wellsite—comprising nearly 100% of thep a ckaging produced by many specialtychemical manufacturing plants. Drums werec o nvenient, widely accepted, readily ava i l-able and relatively cheap to tra n s p o r t .

The problem came with the end user inthe field. Inventories of used drums at well-sites and at service company field officesg r e w, creating a major disposal problem.Direct disposal costs, often in the range of$7 US per drum, and the potential for envi-ronmental liability were a growing con-cern. As business activity increased, so didthe number of drums requiring disposal,increasing costs and cutting into margins.Rules governing drum disposal in the USAva r y, depending on size and constructionmaterial. The combination of logistics anda c c o m p a nying documentation, compli-cated by numerous stocking points anddrum usage exceeding tens of thousandsannually, presented a sizable challenge forservice companies. The challenge extendedto Canada, where drum disposal costswere even higher and it was necessary incertain locations to stockpile containersuntil a credible disposal firm could beidentified. With time, the problem beganaffecting many oil-producing countriesaround the world.

To meet the challenge in the USA, somecompanies opted for interim solutions—implementation of 55-gal drum recy c l i n gp r o g rams or providing materials in smallervolume containers that were easier to dis-pose of or could be recycled. The formerentailed empty container transport back tothe origination point, washing, disposal ofwash materials and refilling. In many cases,

■Minimizing fluid lost to the formation and wellsite waste discharges. Fluid lost duringwell drilling and treatment can be reduced through application of innovative chemicaltechnology that simultaneously decreases formation damage. At the wellsite, use ofclosed-loop mud treatment equipment, continuous-mix systems and container (tote tankand drum) recycling programs can dramatically reduce cost and environmental impact.

Spring 1997 39

the costs incurred exceeded those for drumdisposal and, with time, seve ral companiesdropped or cut back on such programs. Inthe latter case, some companies are nowfocusing on recycling smaller, 5-gal [18.9-L]containers, and the containers are returned,shredded, remanufactured and then reused.

A successful long-term approach has beenthe use of returnable stainless steel andcomposite tote tanks, available in a va r i e t yof sizes with 100-, 150- and 330-gal [378-,567- and 1249-L] most common. ( a b ove ) .Built for dura b i l i t y, these containers have alife expectancy of five years or more. Wi t h i nm a ny companies, the tote-tank program wa sbegun on a trial basis as a supplement tocontinuing delivery of the bulk of their prod-ucts in drums. As the benefits of thisa p p r o a ch were demonstrated, the initiativegrew and currently many service companiesand specialty chemical manufacturingplants use tote tanks as the primary ve s s e l sfor liquid products. The Dowell Tulsa plant,for example, ships 98% of its liquid prod-ucts in tote tanks and the remaining 2% incomposite, instead of steel, 55-gal drums.

Tote tanks reduce ove rall material delive r ycosts to the wellsite. While requiring an ini-tial capital investment and ongoing freightand handling costs for transportation backto the chemical plant, these costs are morethan offset by savings in drum costs, dis-posal fees and reduction of env i r o n m e n t a lexposure. Long-term savings outweigh ini-tial investment and maintenance costs. A sthe number of tote tanks has increased,suppliers have learned how to optimized e l ivery and return logistics to lower tra n s-portation costs.

What the Future HoldsProducing oil and gas as cheaply and effi-ciently as possible requires cost-effectivespecialty chemical additives tailored to pro-vide optimal well drilling, completion andi n t e r vention services. The past decade hasseen a concerted effort by chemical manu-facturers and service companies to improvequality and reliability, and extend the opera-tional capabilities of these materials. Byusing the latest tools and techniques, muchhas been accomplished, with major benefitsboth in the plant and at the wellsite.

■Reusable chemical tote tank. This standard Nalco/Exxon 4- × 4- × 4-ft [1.2- × 1.2- × 1.2-m] reusable chemical tank holds 375 gal [1419 L].

For the future, there will be a continuingd r ive for efficiency and productivity in eve r yaspect of oilfield operations. This willinclude expansion of synergistic efforts inthe specialty chemical sector—just-in-timemanufacturing and inventory pra c t i c e s ,quality control and quality assurance pro-g rams that utilize the latest informationt e ch n o l o g y, product cost and performanceoptimization through reformulation, ande ven greater emphasis on env i r o n m e n t a lc o m p a t i b i l i t y. The cornerstone of today ’s oil-field business is delivering solutions, ra t h e rthan simply supplying products and ser-vices. This is the key to successfully leadingthe industry forward, and is especially truefor specialty oilfield chemicals.

— D E O / K P R

10. Fluid efficiency is defined as the volume of fluidremaining in the fracture divided by the volume offluid pumped into the fracture. Higher efficiencymeans less fluid lost to the formation.

11. Geehan T, Helland B, Thorbjornsen K, Maddin C,McIntire B, Shepherd B and Page W: “Reducing theO i l f i e l d ’s Environmental Fo o t p r i n t ,” Oilfield Review2, no. 4 (October 1990): 53-63.

12. O’Neill and Hill, reference 9.