Carlos Pérez-Téllez, Reginaldo Rodríguez, Ignacio Ramírez, PEMEX, Drilling Business Unit,

1. Paper No.23180-PPApplying a Real-Time Engineering Methodology to Drill Ahead of Potential Undesirable Events Carlos Pérez-Téllez, Reginaldo Rodríguez, Ignacio Ramírez, PEMEX, Drilling Business Unit, Rafael A. Bermúdez-Martínez, Carlos A. Palavicini-Cham, Petrolink Services Inc.

2. INTRODUCTION Displacement (m) 0 2,000 4,000 6,000 8,000 10,000 12,000 0 The majority of reservoirs in Mexico are located in Carbonate and Dolomite rocks from the Cretaceous and Jurassic formations. Complex wells need to be drilled between 4000 m and 7500 m. High Inclination and Horizontal Wells are the most common designs. In HP-HT Salt and Shale Domes, geological failures are the principal challenges. These challenges have given rise to the need for using Real-Time Operation Centers. 2,000 Most common depth for drilling complex wells is between 4000 and 7500 m. 4,000 TVD (m) 6,000 8,000 Fields Puerto Ceiba Costero Tizón 10,000 Sen program (m) Sen-2DL program 12,000

3. MEXICO DRILLING TECHNICAL CHALLENGES North Region Marine Region South Region

4. WHY DO WE NEED REAL-TIME OPERATION CENTERS? • Well complexity and the amount of drilling data has increased substantially in the last decade. • There is a shortage of Drilling Specialists available to manage and analyze the real-time drilling performance process. • Taking the data to the Drilling Specialists at RTOC is more cost effective than utilizing one specialist per well. • Drilling Costs have increased dramatically in the last few years.

5. METHODOLOGY APPLIED AT REAL-TIME OPERATION AND ENGINEERING CENTERS Conceptualization Definition Monitoring Evaluation Visualization 3 4 Monitoring & Analysis (S) Decision Making (E) 3 4 2 2 Integration (D) PLANNING CONSTRUCTION This entire methodology helps to prevent undesirable events in real time Information Aggregation (VC) 1 1 5 Positive Impact on Drilling Process 5

6. MEXICO SOUTH REGION - TECHNOLOGY TIMELINE MWD, LWD, PWD, RSS, Low Balance, Top Drive, Foams, Advanced Software, Horizontal Drilling Multilateral and Extended Reach ShallowWaters DeepWaters HPHT RT-Engineering process start at the RTOC Horizontal Design Concentric Pipe, MPD Advanced bit technology VCDSE Methodology Real-Time Engineering RTOC Slim Optimal Design Advanced software Transition Casing Horizontal drilling WITSML Continuos Seismic Data Multilateral drilling MPD Complexity curve Intelligentcompletions MLD MWD CTD Coiledtubing Conventionalcoiledtubing TLC Technologies ApplicationValue in PEMEX RSS 2007 2008 2009 2010 2011 2012 ERD PDC bits UBD Expandablecasing HPHT Rigautomation Geosteering DWD Top Drive Slim Design RWD Advanced cementing designs Mobile Settlement Casing Smart tubing, Geosteering in horizontal wells Diesel-basedmuds Conductor Jetting International Drilling Contractors RTOC Reusable Design 1980’s 1990’s 2000’s 2010’s VCDSE Studies Rigid Foam • Frequent use • LessFrequently use • Recent Technologies

7. WHY DID THE RTOC EVOLVE INTO AN ENGINEERING RTOC? Incorporate Drilling Specialists as part of the RTOC workflow. Identify operative issues to drill ahead of unexpected events at current operations. Focus on safety, drilling optimization and time reduction.

8. REAL TIME DATA MANAGEMENT PROCESS Rig Office Contractor 1 Surface Parameters Server Specialized Software Aggregation Server WITSML Store Contractor 2 LWD PWD MWD Corporate Databases Specialists Server Contractors Rig Engineer Contractor 3 Mudlogging Programs Proposals Recommendations Alerts Server

9. DATA MANAGEMENT AND ASSURANCE Information Work Flow DATA QC • The quality of the information generated in real-time is indispensable to support the decision-making process. • The information received in Real-time represents the real condition of the well. • Engineering and technical applications can be integrated into the process in real-time.

10. REAL-TIME BEST PRACTICES AND ENGINEERING METHODS Rig site Drilling Specialist at the RTOC – Technical Analysis Data collected in real-time at the rig site Monitoring drilling parameters in real-time SAFE Pore pressure & fracture gradient Logging correlation analysis Offset wells analysis Density correlation Casing design evaluation Monitoring real-time drilling conditions Reduce risk Conditions on the Well Optimize the drilling performance

11. REAL-TIME ENGINEERING METHODOLOGY RECOMMENDATIONS Provide suggestions about hydraulic, torque & drag and directional in order to improve the drilling performance of the well ALERTS Prevent operational problems from unexpected trend changes from surface or downhole parameters ALERTS 1 RECOMENDATIONS 2 Drilling Performance PROGRAMS Adjust well program regarding Pp & FG and any other condition necessary to improve the drilling performance. PROPOSALS Proposing significant changes on the well design, such as: sidetrack, fishing options, unexpected high formation pressure analysis, total lost circulation, and casing point correlation. PROGRAMS 4 PROPOSALS 3

12. REAL-TIME ENGINEERING METHODOLOGY DELIVERIES APPLIED TO DRILLING OPERATIONS Design sidetracks options Rig activity tracking & NPT Cross plot technical analysis BHA performance Engineering workflow Optimize casing design Drilling Performance Logging and correlations Normalization of densities Directional tools performance Hydraulics / torque & drag Drilling Performance inside the RTOC represents the best way we have found to impact positively the drilling operation in Mexico especially in the complex wells. Post-mortem report Trajectory analysis Geopressure analysis (Pp & Fg) Monitoring cementing operations

13. REAL-TIME ENGINEERING METHODOLOGY ALERTS • Partial lost Circulation • Total lost Circulation • Tripping Time Monitoring • Managed Pressure Drilling (MPD) • Stuck Pipe prevention • Resistances (Tripping In) • Frictions (Tripping out) • Connections time monitoring • Non Productive Time (NPT)

14. REAL-TIME ENGINEERING METHODOLOGY RECOMMENDATIONS • ECD vs Operative Windows • Annular Velocity • Cementing Monitoring • Torque & Drag

15. REAL-TIME ENGINEERING METHODOLOGY PROPOSALS Header Inc. • Optimize Casing Point • Cross Plots Technical Analysis • BHA and Trajectory Analysis • Design & Sidetrack Evaluation Density Property Section Lithology Column Surface Parameters Inc. Real Cuchara a +/- 3950m Cuchara a +/- 3950m Drilling Tools Section Directional 3D View BHA Depth Density Track Inclination

16. REAL-TIME ENGINEERING METHODOLOGY PROGRAMS Technical Options Technical Analysis • Technical Options for sidetrack • Technical Analysis (Pore Pressure – Fracture Gradient) • DirectionalPrograms • Drilling Performance Evaluation. Drilling Plan - Correlations

17. 12 Alerts 09 Proposals 02 Programs 01 Recommendations REAL IMPACT ON THE DRILLING PROCESS Well Schematic Geological Column Depth vs Days Real Plan Average Deliverables per well: 25

18. NUMBERS OF WELLS MONITORED BY THE RTOC IN MEXICO SOUTH REGION - 2011 Average: 50 well monitoring & Analizing per month

19. RTOC MEXICO SOUTH REGION - RESULTS Increased Technical Operational Efficiency By 19%, from 61% to 80%.

20. CONCLUSIONS • This Methodology, VCDSE, increased drilling efficiency from 61% to 80% in the PEMEX South Region in 2011. • The RTOC provides engineering solutions to increase the control over the drilling process. • The Drilling Performance Solution has also reduced drilling risk, applying offset well events analysis, logging trends analysis, and cross plot technical analysis in real time. • The Real-time engineering methodology empowers the client to prevent and control future drilling events.

21. Vision: the art of seeing invisible things….

22. Thank you