Weatherford is marking 10 years of expanded sand screens manufacture with a significant further expansion of dedicated manufacturing facilities in Europe.
Until now, Aberdeen has been at the heart of the company’s EST activity. The facility located close by the city’s airport features 9,730sq m of workshop and 10,000sq m of yard.
However, Weatherford has just expanded manufacturing capacity by 34% as a result of investing in a 7,000sq m workshop, plus 4,000sq m yard, in Cyprus. The investment is designed to enable the group to more rapidly grow its business in the Middle East especially.
“We’ve done exceptionally well,” said Mark Nicol, global business development manager for sand control and lower completions at Weatherford.
“We met and exceeded figures and projections of 2002, getting to $100-110million a year revenues by 2007.
“We have worked to make ESS a system and so incorporated solid expandables into the mix to give us zonal isolation. We’ve achieved that, and this has helped enable us to get to these numbers.
“Today, Aberdeen is pretty much at capacity, so Cyprus will enable a significant further lift. Aberdeen alone accounts for around 100 jobs and Cyprus will build that further.”
Main markets served by Aberdeen have turned out to be West Africa, Middle East, North Sea and Asia-Pacific.
“Aberdeen has always served the world, but what we perceive as high-volume markets going forward – Middle East and Azerbaijan – will be served by Cyprus. It can also do Asia-Pacific,” said Nicol.
Aberdeen is global HQ for the ESS business, with engineering, engineering support and product line management focused there. Supporting worldwide is a network of technical centres.
Might there ever be a third manufacturing facility, such as the Americas?
“It is a what if, but should market growth dictate, then another manufacturing facility, even two, is not beyond the realm of possibility,” Nicol said.
Since ESS hit the marketplace a decade ago, Weatherford has carried out some 650 installations – consistently with runs of up to 1,524m (5,000ft). The longest run is just over 2,133m (7,000ft). More than 125km (78 miles) of this technology has been installed, logging more than 3,000 well years equivalent of cumulative production.
This company is reckoned to have cornered the market in ESS, accounting for a 95% share.
However, the last time Energy checked out the expandables market a few years ago, the forecast was that the ESS market would likely reach $700million a year. According to Nicol, that outlook has not changed significantly.
Currently, rather more than 70% of sales are into new field developments.
Importantly, and this could herald an even larger market, Weatherford, over the past two to four years, has been embedding its expandables technology within its wider sand control portfolio and now offers a sizeable standard screen range.
It should be remembered that expandable tubulars are disruptive technologies as they are fundamentally different to and are, where appropriate, displacing prior well-liner and screen systems.
Uptake should accelerate as operators realise the value of the technology and the savings that can be made by applying the technology.
An excellent example is use in deepwater multiple-zone reservoirs where it is necessary to have both water production and water injection into various sections, with the ability to isolate non-producing sections.
Intriguingly, a future market for ESS could be in gas storage. But that’s another chapter perhaps.
It is all a long way from the germ of the expandables idea when Shell, in the late-1980s, started to investigate the radical concept of using expandable tubulars to overcome the telescopic nature of well designs that has been a limitation since wells were first drilled in the mid-19th century.
In the early-1990s, Shell trawled the marketplace to find a company capable of developing and delivering what was needed.
In the event, the small technology-driven Aberdeen outfit, Petroline (acquired by Weatherford in 1999), was selected as the incubator, with emphasis on expandable slotted tubulars (EST), as ESS was then called.
The first prototype was manufactured in 1996 at Petroline’s Montrose facility for Shell and was followed by early applications in 1998/early-1999.
As Petroline lacked the resources needed to take that next step into precision mass manufacturing, what was needed was a major player.
That is where acquisition and technology-hungry Weatherford stepped in with an offer for the firm.
The rest is history and Shell remains the number-one client.