The Beginnings of Production Engineering

Contributed by Mark Mau and Henry Edmundson

As important as knowing about the rock they drilled through, oil companies also needed to ascertain whether their well would produce, and, if so, what it would produce and how much. In the early days, there was little need for such understanding. The oil simply spewed out of the hole, and collecting it without waste was the priority. The advent of rotary drilling and circulating mud changed this picture, and prospectors soon demanded a controlled way of testing production.

The First Well Tests

At first, there seemed to be an insuperable problem. During drilling, pressure in the borehole was maintained by a head of drilling fluid precisely to prevent premature production, so how to test a well’s potential to produce oil? Several solutions were found in the 1920s, all relying on an arrangement of packers and valves on the end of the drillpipe to create a temporary completion of the well. The first method was invented by Mordica Johnston and his brother Edgar from Weatherford, Texas. In 1926, after a number of improvisations, the Johnston brothers fitted a conical packer near the bottom of the drillpipe and mounted a spring-controlled retaining valve above it. The drillpipe was run into the hole with the valve closed, preventing any drilling fluid entering the pipe. Then the packer was set above the formation to be tested, and weight applied to the drillpipe. This sheared some retaining straps and opened the valve, allowing the well fluids below the packer to produce to the surface. When the tester came out of the hole, the valve closed under the action of the spring, and the fluid that had entered the pipe remained there. Mordica Johnston received a patent on his drillstem tester in January 1932.

About the same time, John Simmons of El Dorado, Arkansas, patented a different type of a drillstem tester and began experimenting with a prototype. Erle Halliburton, who was always on the lookout for new ideas, heard that it was on on display in the lobby of the Garrett Hotel in El Dorado and went to see it. He was impressed and sought out the inventor. Contrary to the Johnston well tester, in which the valve was opened by applying weight, Simmons’s tester opened the valve by rotating the drillpipe. Halliburton and Simmons sat down for a drink, and an hour later Simmons left with a check for US$ 15,000 as payment for transferring the rights of his invention. The Simmons patent, issued in October 1933, was assigned to Halliburton.

It didn’t take long before Erle Halliburton and the Johnston brothers were embroiled in a legal battle over their patents. Eventually, the US Patent Office felt compelled to arbitrate. Halliburton needed John Simmons to testify, but Simmons was nowhere to be found. Then, out of the blue, Erle Halliburton received a letter from Australia. Simmons had run out of money and wanted Halliburton to pay for his trip home. Erle paid up, Simmons returned and testified, and the Patent Office recognized the validity of the Simmons patent. Simmons later got hired by Halliburton.

Meanwhile, the Johnstons continued to test wells, so Halliburton promptly sued them for patent infringement. After lengthy court proceedings in both Texas and California, the judgment eventually escalated to the Supreme Court, and it finally decided against Halliburton. Infuriated by the decision, Erle Halliburton declared, “If the courts will not sustain my patents, I am not going to respect anybody else’s.”

Halliburton had already set a precedent in electrical well logging. In 1934, his company had started logging operations in the US, in some areas taking up to a quarter of Schlumberger’s business. Schlumberger filed suit against the Halliburton company and at a joint meeting in Houston in 1938 tried to reach a settlement. But Erle Halliburton, in a voice that thundered through the boardroom, said, “I’ll tell you how to settle this lawsuit. You Frenchmen go back where you belong, and let Americans run American business!” That particular meeting came to an abrupt end, but the lawsuit continued. When it finally ended in September 1942 at the US Court of Appeals for the Fifth Circuit in New Orleans, the judge Samuel Sibley ruled against Schlumberger, writing, “The question as to each patent is: Does it merit the monopolization of the present art of electric logging?” Sibley’s answer was an emphatic “No!” Halliburton was now recognized legally as a competitor in the rapidly expanding well logging business. Marcel Schlumberger was mortified, but Doll saw it as inevitable and for the good: there was nothing like competition to spur innovation.

Measuring Pressure and Temperature

As the gushers faded into the past, and well production typically became more modest, a key challenge was sustaining well production during the life of the well. For that, the production engineer, as this role was becoming known, needed measurements. A good starting point was downhole pressure and temperature, two parameters that affected the efficiency of a well’s production.

At first, downhole pressure was estimated by measuring fluid level in the well and calculating the resulting pressure head at the bottom of the well. An early attempt to determine fluid level was made by C.E. Beecher and Ivan Parkhurst, of the Cities Service Oil Company, in a Kansas well in 1925. They lowered a float device on an electrical wire into the well; when the top of the fluid was reached, the float rose and made contact with a terminal causing a doorbell to ring at the surface.

Temperature measurements started earlier, in 1869, when Lord Kelvin measured the temperature at a depth of 347 feet in a water well in Blythswood near Glasgow, Scotland. The first temperature measurement in an oil well was performed in November 1912 by John Johnston and Leason Heberling Adams, physical chemists working at the Geophysical Laboratory of the Carnegie Institution, Ohio. They used a maximum-reading mercury thermometer, which they lowered in the well to a depth of 3,000 feet, seeing for the first time a systematic increase of temperature with depth, later called the geothermal gradient. In 1916, they conducted a similar experiment in a well near Mannington, West Virginia, this time with a nickel-wire thermometer that had an accuracy of better than 0.01C. The geothermal gradient turned out to be about 5C per 1,000 feet.

Shortly thereafter, C.E. van Orstrand, a physical geologist working for the USGS, measured temperature in eight wells in West Virginia and in another well near Bessie, Oklahoma. Van Orstrand used the same equipment as Johnston and Adams, taking readings to 3,000 feet, but was interested in finding out what affected the geothermal gradient, for example the effect of fluid entry into the borehole, particularly gas. Another area of research was how subsurface structure, for example a salt dome, affected temperature. Orstrand’s first experiments in this direction were in Oklahoma in 1919, working with George Matson, chief geologist of the Gypsy Oil Company, based in Tulsa.

Oil companies were rather slow to pick up on pressure and temperature, with Gulf Oil being one of the first to make a bottomhole temperature survey in 1927, followed by Amerada Petroleum Corporation in 1928. However, these were still crude one-off affairs, but things were about to change. In 1929, Charles Millikan, Amerada’s chief petroleum engineer, developed a gauge that could be lowered into the well to directly measure and record downhole pressure. Pressure was measured by a plunger set against a spring. The spring then moved an arm that traced a curve on a rotating drum. This design and its derivatives served the industry for more than 50 years. From 1930 onward, many oil companies, such as Shell, Standard Oil of California, Humble Oil and Sinclair Oil and Gas Company, adopted Millikan’s gauge, particularly in the East Texas oil fields during the days of proration. Periodic pressure surveys made in key wells allowed engineers to draw up pressure-contour maps that were used to determine allowable production from each well. However, oil companies soon realized the wider benefits of pressure measurements, such as identifying reservoir fluids and determining open-flow well potential. In 1934, Amerada and Shell started packaging pressure gauges in their drillstem tests.

Throughout this period, temperature measurements improved significantly. Again, Amerada took the first step. In 1931, the company initiated the first subsurface measurement of both pressure and temperature, recording both on a rotating drum. Schlumberger was next. By 1932, Marcel Schlumberger and Henri-Georges Doll had developed a new logging tool that could record temperature continuously versus depth and in addition laid the foundations for interpreting geothermal gradients. There were a host of possible applications, for example identifying the top of cement behind casing, and detecting fluid entries and leaks. By the mid-1930s, both pressure and temperature measurements were becoming standard.

Early Oil Well Perforating

Although cementing effectively created a seal between the casing and formation, the practice created an obvious dilemma: How to reach the hydrocarbons on the outside of the pipe. Somehow a way had to be found to pierce holes in the casing to allow the hydrocarbon to flow.

The first method, patented by John Swan of Marietta, Ohio, in 1910, consisted of a cutting tool, called a “perforator,” that was lowered into the hole on a string of tubing. The tool had a star-shaped toothed wheel with cutting points—a sort of rolling knife known as a “ripper” or “splitter.” The weight of the tubing forced the knife out so that it cut a slit in the casing at any desired length. But the openings were irregular in size and their location in the well subject to error. Sometimes they were made at a casing joint, which weakened the whole casing string.

In 1926, Sidney Mims, an oilman from Los Angeles, came up with the idea of shooting through casing with steel bullets. Mims’s patent shows a steel cylinder with chambers, each one containing a powder charge and bullet, that could be lowered on a cable into the hole. His design made sense but never worked in practice. Meanwhile, outside the US, others had similar ideas. In Romania, Colonel Delamare Maze carried out experiments with a gun perforator for the Astra Română and Steaua Română companies in 1928. Although results were poor, Astra Română continued to experiment in the Moreni oil field near Ploesti. These early gun perforators were plagued with problems, of which premature ignition of the gun powder and the risk of splitting the casing were just the tip of the iceberg.

The breakthrough would come in California. Toward the end of the 1920s, two enterprising oilfield tool salesmen, Bill Lane and Walt Wells, were sufficiently impressed by Maze’s efforts and Mims’s patent to try their own luck. Lane and Wells traced Mims’s address to an Elks Club in Los Angeles, a fraternal order in those days restricted to men only, and met him there late one night. Mims agreed to sell his patent to Lane and Wells. The two salesmen then set to work.

Producing a reliable gun proved difficult. To operate in a high-pressure well environment, each gun had to be sealed to keep the powder charge dry. Also, a special powder mixture was needed to combat high well temperatures. The electric cable suspending the perforator into the well required special insulation to withstand the well conditions; otherwise, the electric firing impulse would not travel to the perforator. The bullets had to fire one-at-a-time, in sequence. If, by accident, they all fired at the same time, the casing would be damaged. Controlling the firing required a device situated in the gun and operated electrically from the surface. Finding a steel alloy that could withstand the pressures built up by the detonations was another challenge. Not least, the size and shape of the bullets had to be redesigned.

By 1932 Lane and Wells had a system ready to go and formed the Lane-Wells Company in Vernon, Los Angeles. They had been lucky winning Union Oil for their first trial; no other company would take the chance in a live well. In December of that year, they tested their new perforating gun in Union Oil’s 2,500-foot La Merced no. 14 well in the Montebello oil field near Los Angeles. The well had gone dry from the original openhole section and was ready for abandonment, so Union Oil decided it was worth trying the Lane-Wells perforator in a zone higher up in the cased section of the well where oil was expected. The ungainly-looking contraption dangling above the wellhead was described by contemporaries as a “string of coconuts.” Bill Lane lowered the device into the well, and eight days later, after 87 shots had been fired in 11 runs, the well started flowing again at the rate of 40 barrels a day. News of this test spread rapidly, and by 1934 operators along the US Gulf Coast were trying it out.

The practice of completing wells with gun perforations spread rapidly. For several years, Lane-Wells could not keep up with the demand for its services so established service companies started jumping in, including Schlumberger. This brought the well-logging company into a double dispute with Lane-Wells who were simultaneously trying to invade Schlumberger’s logging market. Since both well logging and perforating depended on accurate depth measurement, Lane-Wells argued that whoever perforated should also log. Otherwise the differing equipment and cable specifications of the various contractors would lead to perforating off depth. Lane-Wells was therefore determined to enter the logging business and to that end acquired a patent in 1937 that supposedly presented electrical logging in a subtly different way than the Schlumberger patents.

Marcel Schlumberger had a horror of litigation, but the de-facto head of Schlumberger US operations, Eugène Léonardon, insisted on taking Lane-Wells to court in Los Angeles, where Lane-Wells was based. As both parties hunkered down for a good fight, Marcel dispatched Henri-Georges Doll to California to keep an eye on things. But more than just patent infringement was going on. Schlumberger also had ambitions. The company was keen to invade the Lane-Wells perforating territory. Outside the US this was no problem, but inside the US the company was blocked by the Lane-Wells perforating patents. While Léonardon rolled up his sleeves in court to debate logging, Doll secretly negotiated with Lane-Wells for a cross-licensing deal that allowed both companies to both log and perforate. The protagonists celebrated at the Coconut Grove nightclub in Hollywood.

Inventing Oil-Lift Technologies

Oil producers dealt with a variety of problems, but perhaps the most serious was the decline in reservoir pressure after the initial strike. The first solution for maintaining production was a sucker-pump driven mechanically from the surface. Another idea was to inject gas into the well, lightening the oil so it could rise more easily.

The first attempt at lifting oil with a gas used air. This was in 1864, in five wells near Titusville, Pennsylvania, the same area where Colonel Drake first struck oil five years earlier. The lifting installations were called blowers, and the first air-lift patent was granted on November 22, 1864, to Thomas Gunning of New York. Air was compressed at the surface and pumped to the bottom of the well through a string of tubing. But the mixing of oil and air was hard to control. In 1892, US engineer Julius Pohlé of New Jersey patented a method of introducing the air in controlled stages. Pohlé’s innovation was soon adopted around the world. In 1899, British geologist and engineer Arthur Beeby-Thompson, working for the European Petroleum Company, introduced air lift to the Baku oil fields. The new technology made quite an impact. In 1902, a Baku oil company well at Bibi-Eybat that had previously produced 3 to 5 metric tons a day by bailing shot up to 327 metric tons a day once air lifting was installed.

About this time, air lifting was introduced along the US Gulf Coast. Then in 1911, Union Oil had the idea of using natural gas produced from their wells rather than air to lift production. The first Union Oil installation of natural gas lifting was in the Cat Canyon oil field in Santa Barbara County. Gas lifting had several advantages: first, gas being naturally at a high pressure was cheaper to compress for lifting than air was; second, it eliminated a safety concern in that air could absorb the lighter components of oil and become a safety hazard at surface; and third, it eliminated casing and tubing corrosion that oxygen would otherwise cause, particularly in the presence of salt water.

Over the next 15 years, acceptance of gas lift leveled off, but with increasing oil demand during World War I and the 1920s, the technique soon found favor again. Some crucial improvements helped. The first innovation was due to Andrew Lockett of New Orleans and Joseph McEvoy of Houston, the latter working for Walter Sharp, the business partner of Howard Hughes Sr. In 1907 and the following year, they were granted patents for a spring-loaded kick-off valve that remained closed until a certain differential pressure was achieved, at which point the valve opened and released the pumped gas. This guaranteed sufficient pressure to kick-start production. Gas lift soon spread beyond the US. In the newly established Soviet Union, gas lift was introduced in 1923 and by 1932 accounted for 92% of all Baku oil production. In the US, Shell started using gas lift in 1924 in Oklahoma, and in 1926 The Atlantic Refining Company was so committed to gas lift that it built a manufacturing plant developing and building gas-lift valves. Atlantic Refining subsequently proved one of the key players in improving gas-lift technology.

In 1932, Jordan & Taylor Inc. of Los Angeles had the idea of installing many gas-lift valves in the same tubing string at intervals of a few hundred feet. This made it easier to prime the well. The top valve opened first. Once the pressure in the oil column above the valve decreased sufficiently, the valve closed, triggering the next valve to open, and so on until the entire production string was producing. Around 1935, Jeddy Nixon of the Wilson Supply Company in Houston figured that these gas-lift valves could be actuated by wireline, rather than with a prefixed differential pressure. He did a test run with a Halliburton wireline unit and succeeded in actuating several valves in succession as his actuating tool was lowered into the tubing. The wireline-operated gas lift turned out to be a great success.

Electric Submersible Pumps

Gas lift, however, was not the universal solution for lifting oil. In many places, the traditional sucker-rod pump still reigned supreme, but as wells got deeper, sucker-rod pumps became unwieldy and even unworkable. An alternative that emerged during the 1920s was the electric submersible pump (ESP). This daring innovation dated back to Czarist Russia in Dnipropetrovsk, today part of Ukraine. In 1911, at the age of just eighteen, Armais Arutunoff founded the Russia Electrical Dynamo of Arutunoff Company. Two years before, Arutunoff had demonstrated a prodigious technical aptitude, using his mother’s scissors to cut laminations from sheet metal to make an electric motor. At his new company, Arutunoff’s management style was eccentric to say the least. He treated everyone in the company as family but was a stickler for punctuality and enforced it by furnishing his office with only three chairs, divided up for the entire day on a first-come first-served basis.

Arutunoff’s company produced electric pumps and sold them successfully for dewatering mines and pumping out ships. His pumps were the first that could be submerged in water. When the Russian Revolution caught up with Arutunoff, he decamped to Germany where in 1919 he established a company called Reda Motorenverwertungsgesellschaft m.b.h., REDA being an acronym for his previous company in Russia. But the German hyperinflation in 1923 forced him to move once more, this time to Los Angeles. Again he had to start over, and wanting to develop and improve his pump motor, he approached The Westinghouse Electric Corporation for funding but was turned down. They proclaimed that his submerged pump motor was “impossible under the laws of electronics.”

Two years later, Arutunoff met sucker-rod salesman Samuel van Wert, and together they adapted Arutunoff’s pump for the oil field. They approached an oil operator in Baldwin Hills, California, and procured a well to test a first prototype. After several tries and numerous modifications to the motor they made a successful test. But work on the prototype and field test had put both partners in debt. Needing funding and exposure to more oil producers, van Wert attended the 1926 American Petroleum Institute (API) meeting in California—the API had been founded in 1919 to promote and protect the US oil industry, both technically and commercially. As luck would have it, Clyde Alexander, who worked for Frank Phillips of Phillips Petroleum, was attending the meeting and happened to be looking for a high-volume lift method for the company’s wells in Kansas and Oklahoma. The two parties met, Alexander witnessed the field test, and on June 15, 1926, a contract was signed for the supply of an ESP system.

In March 1928, the first two ESP systems were ready, and one of them was tested in a Phillips well in the El Dorado oil field near Burns, Kansas. Arutunoff’s early devices consisted of a 3-phase, 2-pole induction motor with an outside diameter of either 5 3/8 or 7 1/4 inches. Maximum power was 105 horsepower, and the length of the motor was about 20 feet. Attached to the motor and directly above it was a seal unit to prevent the leakage of fluids into the motor housing. Above the seal was a multistage centrifugal pump that lifted the oil to the surface. The complete ESP unit motor, seal and pump was run into the well on the bottom of the tubing string, and electricity was supplied from the surface to the motor by a special three-conductor cable. To this day, these are the main components of the ubiquitous ESP.

The test unit in the Phillips well ran 24 hours a day for 16 days and was deemed a success. As part of the contract, Phillips Petroleum exercised an option in the contract and in 1928 created the Bart Manufacturing Company with 51% of the shares owned by Phillips and 49% by Arutunoff. Due to the debt incurred establishing the manufacturing plant, however, Phillips Petroleum divested itself of Bart soon after. Once again in need of money to keep the Bart Company going, Arutunoff contacted one of Frank Phillips’s good friends, Charley Brown, a Bart stockholder and executive of Marland Oil Company, and got a loan. On March 15, 1930, they dissolved Bart Manufacturing and created a new company, the REDA Pump Company.

It was a tough time to start a new company. First, there was competition from other downhole pumps, such as a piston-operated pump driven by hydraulic pressure from the surface; Arthur Gage of Alta Vista Hydraulic Company, Los Angeles, had built a prototype and field tested it for General Petroleum Corporation at Santa Fe Springs, California, in June 1924. Then there was the harsh economic climate of the Great Depression in the early 1930s. To survive, REDA had the idea of renting as well as selling their ESP units. In 1932, still on the brink of collapse, REDA was saved by Phillips Petroleum buying 50 ESP units for their Oklahoma City field where high-volume lift was required to make the field profitable.

Five years later, REDA had done better than survive. Their ESPs were credited with lifting 2% of US oil production, and Arutunoff was getting some press attention. In 1936, the Tulsa World newspaper described an ESP rather quaintly as “an electric motor with the proportions of a slim fencepost which stands on its head at the bottom of a well and kicks oil to the surface with its feet.”

Acidizing

Hermann Frasch was a German chemist who emigrated to the US with his parents at age 16 in 1868. He studied pharmaceutical chemistry at the Philadelphia College of Pharmacy and soon became known for his daring and original experiments. His interests turned gradually to chemical engineering which was then coming into prominence, and in 1874 he established his own research laboratory. He was especially good at making use of things normally viewed as waste byproducts, such as paraffin wax produced in oil refining, which he purified to manufacture candles. Frasch’s fame rests to a large degree on his process for extracting sulfur from mineral deposits.

Frasch’s expertise in petroleum chemistry eventually led to the first chemical stimulation of an oil well. By 1894, Frasch was chief chemist at the Solar Oil refinery in Lima, Ohio. In his spare moments, he pondered why there were such large variations in production from the Lima field wells, which produced from limestone rock. He was sure that these differences must result from variations in pore size in the rock and the connectivity between pores. He then began thinking about dissolving parts of the formation to enlarge the pores and develop better connected channels.

In neighboring Pennsylvania, one method to get more oil out of the rock was to drop a stick of nitroglycerine down the well and hope the explosion would loosen things up a little. Hermann Frasch sought a slightly more controlled technique and suggested to J.W. van Dyke, general manager of Solar Oil, to try acid. Van Dyke agreed and in 1895, Frasch treated an oil well with hydrochloric acid for the first time. But the difficulties of pumping the acid without corroding oil well hardware discouraged further progress. Solar Oil did not pursue further development, nor did other oil companies operating in the Lima oil field. Nevertheless, in March 1896, Frasch was granted a patent for the acid idea, entitled “Increasing the Flow of Oil-Wells.”

Acid was tried again in the late 1920s by various companies—Gulf Oil in Kentucky, The Gypsy Oil Company in Oklahoma and Ohio Oil Company—but with scant success. The breakthrough for acid came in 1930 when Pure Oil Company, based out of Pittsburgh, Pennsylvania, initiated a collaboration with Dow Chemical, the chemical engineering giant in Midland, Michigan. Dow Chemical had a huge surplus of hydrochloric acid and, unable to find new commercial outlets, started dumping it in abandoned oil wells. Dow Chemical engineers noticed that some of these wells were reviving, and Pure Oil soon heard about it. In February 1932, Pure Oil pumped some Dow Chemical acid down a Michigan well in two stages using 500 gallons of acid for each stage. Hydrochloric acid concentration was 15% by weight, and arsenic was added to prevent corrosion of the steel casing and tubing. The results were promisingthe well’s production went up from four to 16 barrels of oil per day.

By the middle of 1932, it seemed certain that the acid process had real commercial possibilities, and Dow Chemical formed a subsidiary to handle the new chemical service. By the end of 1933, wells were being acidized by a number of oil companies throughout the areas where limestone was the producing horizon. These included Gulf Oil in Oklahoma, Shell in Kansas and Stanolind Oil and Gas Company—the newly established E&P subsidiary of Standard Oil Company of Indiana—in Kansas, Oklahoma and Louisiana. In just five years, acidizing replaced nitroglycerine for jump-starting oil production.

Separating Oil, Gas and Water

The more oil the young industry produced, the more urgent became the need to process what was actually coming out of the wells: a mixture of oil, gas and water. Separating oil and gas was important because of the oil purchaser’s demand for pure oil and the usefulness of gas as fuel for the rig engine. In a first attempt at separation, at Oil Creek, Pennsylvania, in 1865, the produced fluids were passed directly from the well via a pipe into a tall, vertical barrel. Being lighter than oil or water, gas would rise to the surface and be led through a small pipe to the rig engine. This single-stage separator, or “gas trap” as it became known, barely changed for decades to come until US service companies such as The Ashton Valve Company, Oil Well Supply Company and The National Supply Company from various parts of the US gradually evolved the design.

By the 1920s, oil-gas separators had become standard, but as well depths increased so did pressures. In the 1930s, wellhead pressures were reported as high as 2000 pounds per square inch (psi). Separation was now often accomplished in several stages, each stage removing gas and decreasing the pressure. In 1934, the Kettleman Hills oil field in California, for example, featured a three-stage separator.

As the early fields started to deplete, water was increasingly produced along with the oil and gas, and this also had to be separated. The first technique, dating from the 1900s, simply used gravity, water being heavier than oil and also, obviously, gas. The produced fluids were led into the separator, and the water simply bled off at the bottom. However, the gravity technique only worked if the water was “free”—in other words, not emulsified with oil. In 1936, Jay Walker of Tulsa, Oklahoma, was granted a patent for separating water emulsified in oil.

Adding heat to the incoming oil-water stream was another method of separating the fluids. The addition of heat reduces the viscosity of the oil component, allowing the water to settle more rapidly. Another highly efficient method involved chemical demulsifiers. William Barnickel, a pharmaceutical chemist, invented this technique with a 1914 patent and three years later founded Petrolite in St Louis, Missouri, a company that would become a pioneer in oilfield treatment. Chemical demulsifiers became popular in the 1920s and 1930s and eventually were combined with gravity methods to separate all the fluid and gas components, or phases, of oil well production.

This entry is based on Groundbreakers: The story of oilfield technology and the people who made it happen, by Mark Mau and Henry Edmundson. You can find the book at http://www.fast-print.net/bookshop/1791/groundbreakers.