IESL NEWS

Venture Production has awarded IESL sand face completion design for their new producer in the Chestnut field. Based on over 8 years of work in the field IESL has developed a unique expertise and understanding of the field to continue working with Venture engineers to deliver maximum cost effective productivity from the field.

Pluspetrol has awarded IESL the production optimization work for their Shiviyacu and Carmen fields in block 1AB. The work involves working with Pluspetrol engineers in developing field and network performance models and carrying out simulations to establish areas for potential optimization. This work follows the successful completion last year of the Capahuari field work.

Our Mrs. Sue Barker is leaving after almost 10 years with IESL, Sue made a significant contribution to the company, her loyalty and hard work sometimes through very difficult times made her a key team member. Her direct and disciplined approach to administration and finance functions will be a legacy that we will treasure. We wish her well for the future.

IESL completed work for Talisman Energy UK to determine the critical conditions for optimum perforating a highly deviated well. Using Geomechanical models developed for the Clyde field the work was completed defining the conditions under which Halliburton’s SurgePRO perforating system was to work as well as expected volumes of sand and inflow volumes required to clean up the tunnels effectively. The well was perforated successfully according to the program.

IESL has been involved in the Chestnut field since 1997 when it was a Premier Oil asset. Now as it approaches its start up date we continue to support the operator (Venture Production PLC) in the design and performance evaluation of the existing wells. Following this process IESL has just completed the first stage of the implementation of the Well Operating guidelines for the field. Operating personnel from the Duty Holder contractor participated in the first of training sessions in Rotterdam where the Sevan Hummingbird vessel is being commissioned prior to sailing to location in block 21 of the UKCS.

IESL has completed a Knowledge Transfer program for PetroRegional del Lago (A JV between PDVSA & Shell) on Sand Face completion design in Maracaibo, Venezuela. This work is the result of the continued efforts by our Latin-American team and an addition to the engineering work carried out in April.

IESL has completed work for CNRI on their Olowi field, the design and supervision of a laboratory testing program was carried out as part of the Sand Face Completion Design for the production wells in the field. With work awarded in Gabon and Nigeria in the last 12 months and additional work in Ivory Coast, the continuity of our efforts and the quality of our products continue to deliver value to our customers

IESL has achieved a milestone in Knowledge Transfer programs with the completion of its 12th course for Petroleos de Venezuela. Over 250 engineers, geologists and scientist have participated in the program which specialises in Perforating Design, Sand Management and Sand Face Completion design.

J. Castro and D. Amachree have joined the IESL team, Jose as a Production Engineer and David as a Petroleum Engineer. Both individuals have a varied experience in the industry and will contribute to add diversity to the team as well as to strengthen our technical capability to enhance our support for our customers worldwide.

IESL has been awarded sand face completion design work from Venture production for the development of their HP/HT Acorn field. IESL's geomechanical capability in fields with high depletion rates and large temperature changes is a key resource to be used for this work.

IESL has been awarded a 5 fields project by PDVSA to develop Sand Face Completion design solutions in particular their heavy crude fields in the Orinoco belt and the new gas fields offshore Eastern Venezuela. The work involves working with PDVSA engineers in all the stages of the projects until implementation of the final recommendations. IESL Venezuela has played a key role in securing the work after a hard and continuous effort supporting our clients throughout Latin America.

IESL has been awarded the design of stimulation and cleanout operations for Foxtrot well offshore Ivory Coast.

Working with Qserve of Aberdeen to ensure that the technical and logistics issues related to the operations are completed effectively, IESL has been building its customer base in West Africa with work recently completed in Nigeria, Gabon and Ivory Coast, further developments are being pursued in Angola.

IESL has launched its new system for well perforating design and evaluation “Geomechanical based Designed Flow and Perforating System - GeoPerforation"”. The system allows effective design and selection of perforating strategies and equipment using geomechanical and flow modelling to determine the actual characteristics of the optimum gun system, shot density, orientation, underbalance pressure and sizes. Performance evaluation of various gun systems can be carried out effectively by looking at their individual characteristics such as expected penetration as illustrated in the graph below.

IESI has completed a large rock strength test program using the Smith Hammer method. Determination of the temperature effects in water injectors is critical therefore, the program was designed to evaluate the impact of the thermal changes on rock properties. Cores from 10 wells were tested and characterised for strength, the input was used to determine the optimum water injection conditions for a water disposal program of over 750 thousand barrels per day.

IESL has been awarded the field optimisation work for two field in Northern Peru operated by Pluspetrol. The work was awarded based on successful completion of another project executed earlier this year for two other fields. The work includes working with Pluspetrol engineers to maximise well performance and identify areas for improvements in the existing infrastructure of the field through network analysis techniques.

IESL, a founding member of the Sand Management Network in Aberdeen participated in the recent meeting where presentations and discussions on the subject of “Reliable Sand Control “ were carried out by operators, services companies and academia. The event was well attended and IESL’s presentation on “ICDs in Sand Control Completions – What happens behind the pipe? can be downloaded from this site or from the SMN site at www.sandmanagement.com.

The US patent office has granted IESL the patent for the Gas Management and Separation System – GMASS invented by IESL. GMASS is used by our customers for wellbore cleanout, milling and drilling since 2002. It is available in five sizes (1 11/16”, 2 1/8”, 2 7/8”, 3 ½” and 4 ½”) and with a robust track record of more than 50 successful operations in the US, Australia, the Middle East and the North Sea.

Venture Production has awarded IESL the wellbore stability and detailed sand face completion design for the Pilot field. The work was awarded based on the successful completion of the BOD for the field. Pilot is a heavy crude prospect that will be developed and completed using sand control in a subsea environment

Repsol Peru has awarded IESI the wellbore stability work for two (2) exploration wells in Peruvian jungle. IESI’s large experience, knowledge of the drilling conditions and success obtained for Pluspetrol under the Custodian program was critical for winning the work against much larger competition.

Our US subsidiary IESI has moved address, check our website for an update and details of the new office.

A Salazar who worked for IESL since 2005 has departed to join Helix RDS in a production engineering capacity. Abraham was transferred from our Venezuelan operation to work in our Aberdeen offices in January 2006; we wish him and his wife well for the arrival of thier first child later in the year

Our sister company IESI has completed the 9th knowledge session for PDVSA in Venezuela. Part of the current program on perforation design, sand face completion design and sand management; this session was well attended with lively discussions and field cases reviewed. Over 200 participants have benefited from the program that is to last until 2008

As part of the Custodian system developed for Pluspetrol Peru, IESL has completed the wellbore stability design for well 1025H in the Corrientes field. The work was carried out jointly with Pluspetrol engineers using the Custodian, Pluspetrol was able to use the experience gathered from over 20 wells in the field currently stored in the system. This is the 6th well to be drilled using the benefits of the Custodian system in a year and resulted in improved drilling success and reduced cost.

IESL has secured work from PetroRegional del Lago, a joint venture between Shell and PDVSA which operates the Urdaneta field in Lake Maracaibo, Venezuela. Continuous efforts from IES Global team in Venezuela are realising a large opportunity based on a long and successful track record in the area. The work includes the evaluation of current well completion performance and its optimisation as part of the development plan for the field.

Based on a very long and successful track record in West Africa (Ivory Coast and Nigeria) IESL has secured work from CNRI to review and develop sand face completion options for their Olowi field offshore Gabon. A number of challenging conditions are expected, from waxy crude to long horizontal sections in unconsolidated reservoirs that make the design a critical component of a successful field development program.

The Robert Gordon University has awarded our subsidiary Innovative Knowledge Ltd. - InnK, the support and facilitation of their online program in the area of well completion design. Our involvement with the University dates from 1999 when we started supporting the post-graduate programs. In 2001 InnK developed the materials and facilitated delivery of the Drilling engineering, Well and Field management and Advanced Well Design online Master programs. We are very happy to continue supporting the University and contributing to enhance its well earned reputation for academic excellence.

Pluspetrol Peru, has awarded IESI a contract to develop the Sand Face Completion design for their new horizontal wells in the Corrientes field. Located in block 8 in Northern Peru and based on the success obtained with the horizontal wells in the Yanayacu field, Pluspetrol has again chosen IESI to work along their engineers to meet the challenges encountered in this area, stress anisotropy, highly viscous crude and high water production.

In 2003 IESL made a firm commitment to expand internationally particularly in Latin America. We made the investment and slowly started building a presence in the most important markets in the area. Based on our continued success in Peru and Venezuela this month we have opened our office in Valencia, Venezuela which will continue that drive; headed by P. Guerrero and F. Moreno. We will be providing our customers with a robust and efficient support in well engineering and knowledge transfer systems throughout Latin America.

We at IESL are always striving to deliver to our clients cost effective engineering solutions with added value. In order to continue improving our processes and services we need to know what our customers think. In Q4 of 2006 we again commissioned Brilliant Red of Belfast, Northern Ireland to run a survey among our customers for our worldwide operations. Customers in Peru, USA, Venezuela, UK and Norway were approached. The results say that we do very well particularly in delivering value for money and cost effective services and products. This exercise also allowed us at IESL to identify areas where we can continue to improve. (See attached results & statistics)

IESL has two new technical publications. SPE paper 108056 entitled "Effective use of Geomechanical Data for Resolving Wellbore Stability Problems in Blocks 1AB and 8, Northern Peru" describes the Custodian program, its methodology, process and results for over 300 wells operated by Pluspetrol in Northern Peru. Also SPE paper 106711 entitled "Integrating Drilling and Geomechanical Damage in Sandstone Reservoirs. Identification, Quantification and Removal" describes how drilling and geomechanical damage at the sand face can be identified, the mechanisms that cause it and how it can be removed to enhance productivity.  Full text papers can be downloaded from the publications page in our site.

IESL has completed the development of the Custodian Program for Pluspetrol Peru.  The project involved the development of a large geomechanical system that allows Pluspetrol's engineers to store and manage geomechanical information for all the wells in their Northern Peru operations. 208 wells in 8 fields were characterised resulting in a very detailed and accurate understanding of the geomechanical conditions in the area.  Over 3000 drilling events related to wellbore stability problems were identified for various well trajectories and geologies; the Custodian system allowed Pluspetrol's engineers to successfully design and drill three(3) new wells in 2006 with a dramatic reduction in engineering time and cost. Drilling activity for 2007 will benefit from the use of the system in well planning and drilling operations avoiding/minimising wellbore stability problems.

IESL has delivered the first knowledge transfer program on Sand Management and Disposal to Petroleos de Venezuela S.A.. The program is part of PDVSA's 2006 & 2008 employee development plan and includes two other programs in well perforating design and well completion. With 22 participants the session was carried out at PDVSA's facilities in Los Teques and counted with the presence of sand detection specialist ClampON who delivered a presentation in the areas of sand detection equipment and methodologies. The session was well received, three(3) similar programs are to be delivered in 2007. To date over 130 people has attended the programs.

In 2003 IESL made a firm commitment to expand internationally particularly in Latin America and we opened our Houston office.  We made the investment and slowly started building a presence in the most important markets in the area. Based on our continued success in Peru and Venezuela this month we have opened our office in Valencia, Venezuela which will continue that drive; headed by P. Guerrero and F. Moreno we will be providing our customers with a robust and efficient support in well engineering and knowledge transfer systems throughout Latin America.

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