ENI E&P Deep Water Drilling

NOT AN OFFICIAL UNCTAD RECORD ENI E&P Deep Water Drilling 8th Africa Oil & Gas Trade and Finance Conference Marrakech 26-30 April 2004

Base Assumptions HIGH CAPEX CAN MAKE DEEP WATER PROJECTS ‘UNPROFITABLE AND SCRAPPED’

IS THE WAY THE OPERATORS HAVE TO REDUCE COST REDUCE THE NUMBER OF DAYS TO DRILL THE WELL

Optimisation A new approach is required to drill a deep water well DRILLING EDGE

DRILLING THE EDGE APPROACH • Gather and review best practises • Benchmark performances • Find and plan to get the limit • Monitor and iterate process • Realise a “learning organization” • Avoid the “blame” culture

THE CHALLENGE At the end of Ninety's, deepwater developments were considered the investment for the future. Eni E&P Division, as well as other major oil companies, acquired deepwater blocks mainly in West Africa, Gulf of Mexico, Mediterranean and Brazil. To explore the deepwater prospects, in 1997 Eni E&P Division requested Saipem to build a ultradeep water “state of the art” rig capable to drill in 3000 meters of water. The drillship Saipem 10000 was built at Samsung shipyard (Korea) in 1998-1999 and was delivered to Saipem in the spring of year 2000.

THE SOLUTION:SAIPEM 10000

ACTIVITIES The Saipem 10000 came under long term contract with Eni E&P Division in May 2000 immediately after the rig was commissioned in Korea. Contract duration is 6 years (until May 2006) with the option to extend the contract for one additional year. The drillship was brought from Korea to southern Adriatic Sea in Italy where the first well (Sparviero) was drilled in July 2000. At the conclusion of operations in Italy, the Saipem 10000 was taken to West Africa.

WELLS TO DATE North Atlantic Caspian Sea Gulf of Mexico Mediterranean Austral-Asia Brazil West Africa Eni E&P Division Operated Deepwater Blocks • 21 wells (1 Italy, 17 West Africa, 3 Brazil) • Water depths ranging from 600 to 2791 meters

SAIPEM 10000 - DUAL ACTIVITY RIG • The rig is equipped with a single derrick with two rotary tables, two drawworks, two motion compensators and two top drives. • Inside the derrick, a dual automated pipe handling system allows movement of pipe from/to the set back area with either rig. • During the riserless phases of the well, the two rigs will alternate on the hole reducing the influence of water depth on trip times

SAIPEM 10000 - DUAL ACTIVITY RIG A B • Rig A: • Running BOP • Rig B: • Run 36” C.P. Jet String

RIG’S MAIN FEATURES • Dynamically positioned drillship DP3 • Zero enviromental impact operations • Maximum water depth: 3000 m (all riser on board) • Full “Dual Activity” rig • Storage capacity: 140,000 bbls of produced oil • Well test facilities permanently installed

DUAL ACTIVITY EFFICIENCY Time savings compared with a single activity rig (water depths in excess of 1500 m) Riserless and abandonment operations 40% to 50% Total well construction time (drilling) 15% to 20% Total well construction time (drilling + completion) 30% to 40%

ENI EXPERIENCE Conventional Jetting 30” CP Jetting 30” CP & Drill Ahead 17” 1/2 Eni E&P Combination Running System • Drill 36” hole • Run and cement • 30” CP • Drill 26” hole • Run and cement • 20” casing • Jet 30” CP • Drill 17” 1/2 hole • Run and cement • 20”-13” 3/8 casing • Jet 30” CP and • drill 17” 1/2 • Run and cement • 20”-13” 3/8 casing • Drill 36”-17” 1/2 hole • Run and cement 30” • and 20”-13” 3/8 csg • 1 jetting phase • 1 drilling phase • 1 cementing job • 4 trips • 2 drilling phase • 2 cementing job • 8 trips • 1 jetting phase • 1 drilling phase • 1 cementing job • 6 trips • 1 drilling phase • 1 cementing job • 4 trips

Eni Combination Running System Primary cementing job flow path Remedial cementing job flow path CART 18” 3/4 Housing 18” 3/4 Housing 30” GRA 36” Hole Conductor pipe 30” Casing 20” Casing 13” 3/8 Inner string DP 5” 17” 1/2Hole

Time savings 150,0 Conventional Conventional Jetting C.P. Jetting C.P. & Drill-Ahead 100,0 ENI D.C.R. ENI D.C.R. ENI D.C.R. 50,0 Udoro - 1 164/28-1 Haret-1 Taalab -1 Filomena - 1 Lulu Leao 0,0 Wells Operating time during riserless phase (drilling pilot hole and running BOP not included)

ENI Combination Running System Original program ENI EXPERIENCE • Prepare 30” and • 20”-13” 3/8 csg • Drill pilot hole • Drill tapered hole • 36”- 17” 1/2 • Run and cement 30” • and 20”-13” 3/8 csg • Run riser and BOP • Drill 12” 1/4 phase • Drill 1st pilot hole • Jet 30” CP • Drill 2nd pilot hole • Open hole to 17” 1/2 • Run and cement • 20”-13” 3/8 csg • Run riser and BOP • Drill 12” 1/4 phase

ENI EXPERIENCE Sai10 k Sai10 k Sai10 k Sai10 k - Run BOP - Drill tapered hole - Run transponders - Prepare CP and csg - Run BOP - Run and cmt CP and csg - Run BOP - Drill pilot hole

ENI EXPERIENCE Sai10 k Sai10 k Sai10 k Sai10 k - Drill 12” 1/4 - Anc. Op. - Logging - Anc. Op. - Plugging - Anc. Op. -POOH BOP - Plugging

COMPLETION SEQUENCE Sai10 k Sai10 k Sai10 k Sai10 k - Unlat. BOP - Run XT - Latch BOP - Anc. Op. - Run compl. - Anc. Op. - POOH BOP - Run XT Cap

TROUBLE FREE TIME COMPARISON Sea level Single activity Dual Activity WD 1700 m C.P. @ 1800 m VD 20 - 13"3/8 CSG @ 2300 m VD 12 1/4" Open Hole @ 3000 m VD • 28 days for dry hole • 20 days for dry hole • 22 days for completion • 15 days for completion Drilling and Completion: 30% faster

CONCLUSIONS Feasibility for cost reduction in deepwater without affecting the safety aspect, has been proved; Sensible operational time reduction always affect positively the global impact on the Environment.

ENI E&P Deep Water Drilling