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Production and operations

In 2014 the project reduced its drilling costs; increased the production potential of its existing wells; completed two major projects to mitigate the risk of interruptions in the supply of fuel needed for operations; and committed to a multi-year program to drill new wells to fully exploit the crude contained within the Doba basin. All of these accomplishments have improved its economic outlook in the short- and long-term – particularly important in light of the challenges in current global market conditions.

In addition, crude from new shippers began flowing through the pipeline, adding significantly to the total volumes of oil transported through the Export Transportation System (ETS) and delivered to world markets. At the same time, a number of changes within affiliates TOTCO and COTCO have positioned the companies to manage the needs of an increasing number of customers as Chad’s crude market continues to develop.

New wells and drilling techniques unlock more of Chad’s crude

Following an extensive investigation into the assets in the Doba basin, market conditions and project economics, the Consortium decided late in 2014 to extend the project’s well drilling program through 2016. Dozens of new wells will be concentrated where known reserves exist, maximizing production in 2015 and beyond. While the project’s long- term confidence in the potential of Chad’s Doba reserves remains intact, new production will require highly disciplined cost management, which is especially important during times of market volatility.

Working closely with drilling contractors Schlumberger and Weatherford, the project has deployed multiple new techniques that are improving the program’s economics.

These techniques, which enable the well work team to drill faster and more efficiently while maintaining its strong safety record, include:

  • Cluster pad drilling, which involves drilling four or five wells to tap into different areas of subsurface geology from the same well pad, reducing the need for additional land use;
  • High tech drilling rigs that reduce the time it takes to move a rig;
  • Smaller well casings which allow faster drilling with less material; and
  • A maintenance reliability framework called Prevent, Detect, Respond, Recover (PDRR), which has significantly reduced down time in the field.

All of these activities contributed to stabilize production rates and offset natural decline. Also implemented in 2014 was an Enhanced Oil Recovery pilot program with the potential to increase recovery from existing wells. This program uses non-toxic soluble polymers to make the water injected into older oil wells or reservoirs thicker, increasing its effectiveness in forcing the heavier crude to the surface. This technique is particularly effective in enhancing the recovery of Doba field oil.

TOTCO: A growing organization

More than ten Chadians have been hired by TOTCO to help the company fulfill its critical role helping new shippers put their oil in the pipeline. Many of these employees are working out of the company’s new headquarters in N’Djamena. An enlarged office in Komé, at the beginning of the pipeline, is being planned as well.

Modifying the Pipeline to Accommodate New Sources of Crude

A team of dozens of employees and contractors recently completed a year-long effort modifying the project’s two pump stations in Cameroon to accommodate the new, lighter blend of oil to be shipped through the ETS by Chad’s new producers. This $35 million investment enhances the capabilities of the stations’ existing Crude Oil Topping Plants (COTP) and is a key step in enabling the system to accept crude from new shippers.

Photo — The COTP modification project is just one of a number of changes that COTCO and TOTCO are making to adapt their operations and business practices to service multiple shippers effectively. The equipment fabrication and installation were planned to minimize disruptions to normal operations.

The plants produce the fuel required to push Chad’s crude through the 1,070 kilometer export pipeline. This occurs by processing a small portion of the stream of oil into distillate, which can be burned by the plants’ generators and turbines. The modification work was conducted with a heightened focus on safety, as it was carried out within an active process area. The work was completed on schedule and within budget, and did not cause any lost time, injuries or interruption to operations. As a result, there were no impacts on upstream production operations.

Photo — "The completion of the COTP modification is one of many activities that allow us to provide the best standards of service to all of our customers." - Jean de Dieu Fosso, COTP Modification Project Manager, COTCO

Ensuring a Long-Term, Uninterrupted Fuel Supply for Operations

The recent completion of two major infrastructure investments – the LK Liquids and Crude Firing projects – guarantees a consistent fuel supply to power Oilfield Development Area (OFDA) operations in Chad for years to come.

The LK Liquids project (also referred to as gas debottlenecking) maximizes natural gas production, the least expensive and cleanest fuel available to run the over 100 megawatt plant at Komé 5 that powers hundreds of production wells in the OFDA. This project will allow the wells to produce gas for a longer period by lowering the wellhead pressure and separating out the liquid byproduct (condensate) from the gas, which is then transported to the power plant through pressurized lines.

However, despite the immediate boost to fuel supply created by the LK liquids project, the output of the gas producing wells – like all wells – declines over time, and eventually the wells will become depleted. As a long-term solution, the project has recently completed modification of its power generating turbines to run on crude in case of a reduction in the gas supply. The turbines can now be switched over in a phased process, to ensure uninterrupted production as the supply of natural gas gradually decreases. Currently, three turbines are running on natural gas and the fourth is running on a mixture of gas and crude, which has been treated to burn cleanly. This multi-fuel capability mitigates the risk of interruption to operations related to potential future fuel supply issues.

Operational and Structural Changes at COTCO and TOTCO

Production Chart

With Chad’s crude production expected to increase over the next few years, COTCO and TOTCO have created a new commercial department to service all of the production companies that will be shipping crude through the Export Transportation System (ETS). The commercial department manages all issues related to inserting oil into the pipeline, including the measurement and reporting of volumes shipped, invoicing, forecasting future shipments capacity, reservation communications to ensure customers remain fully informed on all relevant matters, and new business development.

  • Elizabeth Tchwenko, Nominations and Lifting Supervisor, Commercial Department, COTCO

    “With the addition of the new shippers, we expect to be very busy for the foreseeable future. The pipeline is strategically placed, and we can serve as an outlet to multiple landlocked countries with oil to produce. Our operational record makes clear to potential customers that the Export Transportation System represents a highly safe and reliable route to export their crude.”

These functions were previously handled by other departments, but with increasing production and additional shippers coming on line, a dedicated commercial department is needed to deal with the many complex factors that must be considered when transporting oil originating from multiple sources. In addition, the department tracks, projects and communicates production forecasts to ensure sufficient capacity is available to reliably transport its customers’ product from Chad to markets around the globe.

Shipments from marine terminals

2014 Production results

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    Million barrels produced from the Doba fields

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    New oil wells added

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    Production wells online at year-end

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    Water injection wells online at year-end

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    Well renovation and enhancement procedures conducted

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