Memorandum

To: Jeff Bruce

CC: Dave Pattrick, Ali Mudhofar
From: Jon Elliott
Date: 9/4/2002
Re:
Cost Savings Generated by the Wireline QC
Specialist

Jeff,
Conoco Indonesia appointed a wireline QC specialist in November 2000 to supervise the
acquisition of wireline logs on cn wells in the Natuna Sea. In making the appointment, it was
hoped to improve the quality of the service and in doing so give Conoco a better data set as well
as saving rig time through improving the efficiency of the service. Initially the position was offered
to James Hubbard who contracted to Conoco until December 2001. His replacement, Ewan
Makepeace has offered further new insights into log QC whilst maintaining the extremely high
standard of service. Both have been outstanding value and the concept of the position at Cll has
proved to be an unqualified success in this business unit.

The principal aim of this memo is to estimate the cost benefits that cn has enjoyed since the LQC
specialist appointment was made.
1. Logging Efficiency. This has been improved to the impressive rating of 97.4%. The
table below illustrates the progressive improvement in logging efficiency since 1999.


The cost of lost rig time in each scenario is illustrated by the following graph. Note the
dramatic improvement from 1999 to 2001-02. A mere $41,000 of lost rig time is attributed
to logging downtime in the last drilling programme with no MDT or MSCT tool failures
experienced.


The exact degree to which the LQC specialist has reduced the downtime is unclear.
Indeed there are other contributing factors why Conoco enjoyed such an excellent
standard of service in the last drilling campaign. These include the fact that the tools did
not come back to Jakarta for servicing (and were swapped out for other tools) as well as
the type of well that CII drilled in 2001-02. The fact that CII has a LQC specialist at the
well site who has more experience with the tools that we are using that the two
Schlurnberger engineers combined does seem to have made a very positive impact
though. For the purpose of this report, 50% of the improvement in efficiency has been
attributed to the LQC specialist.
2. MDT Savings. Since the appointment of the LQC specialist there has been a dramatic
improvement in service quality and efficiency of the MDT service. These time-savings are
detailed below.
a. An average of 7 minutes per level was spent waiting for the gauge to stabilise for
the hydrostatic QC check prior to each pre-test. The pressures recorded. are
meaningless and acquired as a quality control measure only. In 2000-0 1 it was
decided to abandon this stabilization process. A total of .6 minutes per level
multiplied by 588 pre-tests acquired since the appointment makes a time saving
of 58.8 hours in total.
b. A dramatic improvement in tool reliability has been experienced since the
appointment. In 2000-01 there were 8 tool failures in 12 wells. In 2001-02 there
were no failures in 6 wells. Much of this improved performance is attributed to the
fact that Schlumberger dedicated a tool set to Conoco for the programme and the
. tools were serviced on the rig or in Schlumberger's facility in Matak.
c. The average time per pretest was cut from 39 to 29 minutes. This time saving is
largely co.vered by the cutting of pre survey hydrostatics. Tight pre-tests have
also been aborted early further cutting the time taken for each MDT survey. The
estimate for time saving for the early abortion of tight pre-tests is 17.7 hours.
3. Super-Combo:
a. Refinement of the interval to be logged in high resolution (spectral gamma) mode
has saved an estimated 13 hours or rig time since the appointment.
b. The post survey calibrations are now conducted on the catwalk instead of in the
derrick. Logging operations have continued while calibrations are made. The
estimated time saving since the appointment is 4.3 hours.
4. MSCT:
a. Two tool failures occurred in the 2000-01. drilling programme prior to the
appointment of tlie LQC specialist. There have been none since.
b. The average time per core has been cut from 41 to 18 minutes per core.
c. The recovery rate has been excellent throughout the last two programmes. None
of these metrics have been cost evaluated.
5. Velocity:
a. A 5-shuttle borehole seismic tool was specified for the 2000-01 tender.
Schlumberger provided the ASI tool for this service and the results were
excellent. ASI has better high temperature reliability and has dramatically
increased the ~ime spent acquiring data. The number of minutes per level
acquired since 2000 is as follows.
2000-01: 7.4 minutes per level. CSAT, pre-QC.
2000-01: 6.4 minutes per level. CSAT post-QC.
2001-02: 4.6 minutes per level. CSAT post-QC.
b. The minumum number of shots per stack was reduced ftom 5 to 3 shots for
check shot survey thanks to the excellent borehole condition and excellent
repeatability of the shots. Assuming time-savings of one minute per level
attributable to the LQC specialist, the saving would be in the vicinity of 19 hours.
6. Miscellaneous
On the final well drilled in 2002, Malong-2, there was a wynch failure. Schlumberger were
able to complete the MDT survey on manual over-ride, however were unwilling to run
back into the hole to acquire MSCT or velocity surveys. Communi~ation with the project
geologist indicated that he was prepared to wait for 24 hours for a specialist mechanic to
get to the rig to effect repairs. Unsuccessful attempts to rectify the problem were made b
the Schlumberger mechanic, Schlumberger engineer and the Sedco diesel mechanic to
rectify the problem. A Schlumberger mechanic was mobilised at 02:00 hours however he
was unable to get the equipment he required to fix the problem and missed the early
morning flight.

Meanwhile, during operations to pull the MDT tool from the hole at the completion of the
MDT programme, Ewan Makepeace stripped the wynch, removed the burnt out card and
rewired the electrics. The logging programme was completed without further downtime.
The total potential time saving was in excess of 24 hours.

Summary
To summarise since the appointment of the LQC specialist, an estimated 137 hours of rig time
has been saved with no compromise to data quality .Indeed data quality has improved as all
evalua~on objectives have been met. Table 3 details logging metrics for the last three drilling
campaign






Table 3: Logging Metrics 1999-2002
Logging Metric 1999-2000 2000-2001 2001-2002
Logging Contractor Baker Atlas Schlumberger Schlumberger
Total Feet Drilled 62,201 111,855 50,883
Total Time Logging 796.0 886.0 272.4
Total Lost Time 120.0 63.0 6.8
Logging Efficiency 87.0% 93.4% 97.6%
Rig Spread ( per hour ) $6,000.00 $6,000.00 $6,000.00
Cost of Lost Time $720,000.00 $378,000.00 $40,800.00

MDT Pre-Tests N/A 656 289
MDT Samples N/A 64 33
Tool Failures 8 0
Hours Per Tool Failure 47.5 No failures
Minutes Per Pre-Test 35 29

Velocity Levels N/ A 982 543
Time per Level N/A 6.8 4.6

MSCT Cores 168 142 107
Tool Failures 2 0
Cores Per Tool Failure 71 No failures
Minutes Per Core 23.3 17.0
MSCT Core Recovery 83.0% 95.8% 95.3%














Conoco QC Specialist Cost Savings 2001-02
No. Metric Year Units Unit
Time/unit
(hours)
Hours
Saved
Rig Holding
Rate
Total Saved
1
MDTPre-survey
Hydrostatics
2000-
01
299.0 Pre-test 0.10 29.9 $6,000.00 $179,400.00
2
MDT Pre-survey
Hydrostatics
2001-
02
289.0 Pre-test 0.10 28.9 $6,000.00 $173,400.00
3
Terminating tight MDT
Pre-tests
2000-
01
67.0 Pre-test 0.10 6.7 $6,000.00 $40,200.00
4
Terminating tight MDT
Pre-tests
2001-
02
110.0 Pre-test 0.10 11.0 $6,000.00 $66,000.00
5
Defining Spectral GR
Interval
2000-
01
5.0 Well 1.00 5.0 $6,000.00 $30,000.00
6
Defining Spectral GR
Interval
2001-
02
8.0 Well 1.00 8.0 $6,000.00 $48,000.00
7
After Survey
Calibrations on Catwalk
2000-
01
5.0
Combo
Run
0.33 1.7 $6,000.00 $9,900.00
8
After Survey
Calibrations on Catwalk
2001-
02
8.0
Combo
Run
0.33 2.6 $6,000.00 $15,840.00
9
Upgrade of CSAT (5
Wells)
2000-
01
5.0 CSATRun 1.50 7.5 $6,000.00 $45,000.00
10
Velocity survey
streamlining
573.0 Level 0.02 9.6 $6,000.00 $57,300.00
11
Velocity survey
streamlining
543.0 Level 0.02 9.1 $6,000.00 $54,300.00
12 Reduction in downtime
2000-
01
Total 16.3*0.5 $6,000.00 $48,871.10
13 Reduction in downtime
2001-
02
Total 17.8*0.5 $6,000.00 $53,278.94
Total Savings: $821,490.04

Table 4: Estimates for Time Savings Attributable to the CII LQC Specialist










Logging Metrics
1999-2000 2000-2001 2001-2002
Logging Contractor Baker Atlas Schlumberger Schlumberger
Total Feet Drilled 62,201 111 ,855 50,883
Total Time Logging 796.0 886.0 272.4
Total Lost Time 120.0 63.0 6.8
Logging Efficiency 87.0% 93.4% 97.6%
Rig Spread (per hour) $6,000.00 $6,000.00 $6,000.00
Cost of Lost Time $720,000.00 $378,000.00 $40,800.00
MOT Pre- Tests N/A 656 289
MOT Samples N/A 64 33
Tool Failures 8 0
Hours Per Tool Failure 47.5 No failures
Minutes Per Pre- Test 35 29
Velocity Levels N/A 982 543
Time Per Level N/A 6.8 4.6
MSCT Cores 168 142 107
Tool Failures 2 0
Cores Per Tool Failure 71 No failures
Minutes Per Core 23.3 17.0
MSCT Core Recovery 83.0% 95.8% 95.3%