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PART VIII. – PRODUCTION.|
180. Identification of Wells and Production Facilities.
The licensee shall mark each well and production facility with a notice in large, legible letters, of a type and size acceptable to a Petroleum Inspector, stating the name of the field and the well or production facility number.
181. Protection of Completed Wells.
All completed wells shall be reasonably protected and a notice, in accordance with Section 26, warning persons of the danger that exists, shall be prominently displayed.
182. Construction Approval.
The licensee shall not commence the construction of a facility without the written approval of the Director.
183. Application for Approval.
(1) An application for approval of the location, construction and operation of a production facility shall include the following information:–
(a) the name, location and coordinates of the facility;
(b) a listing of the well names and pools planned to be producing to the facility complete with a listing of petroleum in place, ultimate recovery and remaining reserves for each pool;
(c) estimated minimum, maximum and average oil, gas and water rates for each well and justification for these rates in respect to the maximum ultimate recovery to be achieved at these rates in comparison to maximum recovery of alternate rates;
(d) a plan showing the intended location of all gathering lines forming part of the production facility, together with pipe sizes;
(e) a statement of the main specifications to which the facilities have been designed and are planned to be constructed and operated, and a statement of the proposed operating pressures;
(f) the specifications of the separation equipment including pressure rating, minimum and maximum flow capacities and operating pressures and temperatures;
(g) a discussion of–
(i) the well testing frequency and duration intended; and
(ii) the measurement capabilities of the facility; and
(iii) any off-lease disposal;
(h) a list of the common flow lines intended and the method of testing the wells on each common line;
(i) a schematic flow diagram showing–
(i) the location of all major equipment including separation, dehydration, treating and storage facilities if any; and
(ii) the location and type of measurement equipment with each measurement point properly identified; and
(iii) emergency relief valves, lines, tanks or emergency shut down system; and
(iv) location and size of pits, dikes, flare lines and flare stacks; and
(v) location and capacity of pumps or compressors delivering oil, gas or water to a pipe line or injection;
(j) a sample set of field production reports for the facility with each entry explained using the identified measurement points from the schematic flow diagram;
(k) a plan showing the land surface contours, type of vegetation, bodies of water and surface improvements within 200m of the facility and the size and location of the facility site;
(l) operational and equipment details of any trucking facilities;
(m) where production from more than one pool is received at the facility, a statement of the method intended for allocating production between pools.
(2) An application for approval to modify a production facility shall be accompanied by the applicable information required by Subsection (1) where the modification affects the general measurement and flow capability aspects of the production facility.
(3) Where maintenance or preventative maintenance is carried out that does not affect the existing flow capability, an informational notice that does not require approval, is requested to be submitted to the Director.
(4) An approval for the location and construction or modification of a production facility shall be subject to any conditions set out in the approval.
184. Gauging and Metering Facilities.
(1) Tanks or meters shall be provided to measure continuously the quantities of oil, condensate, water, and gas from each producing field.
(2) Unless otherwise approved by the Director, the oil, gas and water production rate of every uniquely completed zone on extended production, in every well, shall be determined by test at intervals not exceeding one month during such production.
(3) A test referred to in Subsection (2) shall be–
(a) of sufficient duration so that–
(i) the volume of gas and liquid produced can be metered within the manufacturer’s specified accuracy tolerance for the measurement devices in use; and
(ii) the rate of production determined for the test period is representative of the producing characteristics of the well; and
(b) normally once per month except in the case where the oil rate, GOR or WOR vary significantly from that of the previous test, in which case two or more tests per month shall be performed at reasonably consistent time intervals and the results of said tests shall be submitted to the Director as soon as practical.
(4) In the case of a swing well, the same test requirements apply although the variation parameters may differ.
(5) Unless otherwise approved by the Director, the production rate of every gas well on extended production shall be measured separately and continuously from each flowing string in each well.
(6) All meters and devices used to measure production of oil, water and gas shall be proved and certified as to accuracy in a manner and frequency acceptable to the Director.
185. Measurement of Production for Royalty Purposes.
(1) The Director may, for the purposes of measuring production for royalty, seal with a metallic seal, a valve or meter selected by him and installed at a well or on a pipeline, tank or other receptacle used for the storage or transportation of oil, gas or other fluid produced or withdrawn from the well.
(2) The site person-in-charge shall be notified orally in advance by a Petroleum Inspector of his intention to affix a seal under Subsection (1) stating his reasons therefor and such oral notification shall be confirmed in writing.
(3) Except in case of emergency, a seal affixed under Subsection (1) shall not be tampered with or removed without written permission from the Director.
186. Production Lines and Equipment.
Production lines and equipment shall be in accordance with relevant Australian or API Standards, or to specifications acceptable to the Director.
187. Monitors, Control Mechanisms and Safety Devices.
(1) A monitor and control mechanism, whose specifications are acceptable to the Director, shall be used to–
(a) control the rate of recovery of petroleum or water from a well; and
(b) control the pressure in pressure vessels and associated piping so that the safe working pressure of the vessels and piping is not exceeded; and
(c) prevent the escape of petroleum; and
(d) shut down an artificial lift device and close in a well in the event of–
(i) a break in a pressure vessel or associated piping receiving or conveying petroleum or water flowing to or from the well; or
(ii) a failure of any control mechanism associated with the well which might result in an unsafe condition being caused by the escape of petroleum or water; or
(iii) a fire or explosion in the vicinity of the well; and
(e) activate fire control mechanisms in the event of the outbreak of fire or an explosion.
(2) A well that is capable of producing petroleum by natural flow or by gas lift shall be equipped with a surface controlled subsurface safety device whose specification is acceptable to the Director.
(3) A surface controlled subsurface safety device shall be–
(a) designed so that it closes off automatically the flow of petroleum or water from the well where the wellhead or production equipment is damaged in such a way that would allow the escape of petroleum or water from the well; and
(b) operated at regular intervals not exceeding six months and tested at intervals according to manufacturer’s recommendations; and
(c) where a test indicates that it may not operate correctly, repaired or replaced forthwith.
(4) An existing wireline retrievable, non-surface controlled subsurface safety device that was installed and in service prior to the coming into operation of this Regulation shall be–
(a) pulled, serviced and tested during all planned wireline operations on the well; and
(b) replaced with a surface controlled subsurface safety device during the first rig assisted workover operation on the well after the coming into operation of this Regulation.
(5) A surface controlled subsurface safety valve or injection valve that is capable of preventing back flow from a well shall be installed in all injection and/or disposal wells, operated at regular intervals not exceeding six months and tested at intervals according to manufacturer’s recommendations, unless the Person in Charge can prove that the well is incapable of flowing.
188. Initial Production Tests.
(1) Each newly completed, recompleted or stimulated flowing oil well shall, prior to being put on production, or within 14 days thereof, be subjected to a production test, which shall include where practical, bottom hole pressure measurements, for not less than four consecutive hours and the Person-in-Charge shall, as soon as practicable after the completion of the test, send to the Director a report showing–
(a) completion interval and details of perforations; and
(b) oil, water and gas production with gas/oil ratio; and
(c) the choke size; and
(d) the API gravity of the oil; and
(e) casing and tubing pressures; and
(f) separator temperature and pressure; and
(g) duration of test; and
(h) interpretation of the test.
(2) Each newly completed, recompleted or stimulated non-naturally flowing oil well, being artificially lifted shall, prior to being put on production, or within 14 days thereof, be subjected to a production test that shall include bottom hole pressure measurement if practical for not less than eight consecutive hours, and the Person-in-Charge shall, as soon as is practicable after the completion of the test, send to the Director a report showing–
(a) completion interval and details of perforations; and
(b) oil, water and gas production with gas/oil ratio; and
(c) the API gravity of the oil; and
(d) casing pressures and fluid levels where applicable; and
(e) method of artificial lift, depth of device, and operational parameters; and
(f) duration of test; and
(g) interpretation of the test.
(3) Each newly completed, recompleted or stimulated gas well shall, before being placed on production or within three months of its completion, recompletion or stimulation, be subjected to a flow potential test using a multi-point back pressure method, isochronal method, or any other method approved by the Director, and the Person-in-Charge shall, as soon as is practicable after the completion of the test, send a report to the Director showing–
(a) completion interval and details of perforation; and
(b) the choke size or sizes; and
(c) gas, oil and water production rate or rates; and
(d) gas/oil ratio; and
(e) the API gravity of the oil or condensate; and
(f) casing and tubing pressures; and
(g) separator temperature and pressure; and
(h) duration of test; and
(i) any further relevant details; and
(j) interpretation of the test.
(4) Each newly completed, recompleted or stimulated water or gas injection well, prior to being put on line, or within seven days thereof, shall be subjected to an injectivity test for not less than four consecutive hours and the Person-in-Charge shall, as soon as practicable after the completion of the test, send to the Director a report inclusive of–
(a) completion interval and details of the perforations; and
(b) water and/or gas injection rate; and
(c) casing and tubing pressures; and
(d) pump or compressor outlet pressure; and
(e) interpretation of the test.
(5) On each well where equipment installation permits, closed in and flowing bottom hole pressures shall be measured during the tests specified in Subsections (1), (2), (3) and (4), unless otherwise approved by the Director.
(6) The Person-in-Charge shall notify the Director as early as is practicable, but in any case prior to the commencement of the test, of his intention to conduct a production or injectivity test, as required by this Regulation.
189. Multiple Completion Well.
(1) A well shall not be allowed to produce oil, gas or water from different pools at the same time from the same string unless the production from each individual pool can be independently tested and measured or approval in writing has been obtained from the Director.
(2) The Person-in-Charge shall, when required by the Director, conduct interference tests between the various zones of a multiple completion well to ensure that isolation of the various zones is being maintained to his satisfaction.
(3) Within one month of the completion of each test required by this section a report of the test containing all relevant data and an analysis and interpretation of the test proving or confirming segregation shall be forwarded to the Director.
(4) Where at any time a test required by this section or the production characteristics of the well indicate that segregation between the zones is ineffective–
(a) a diligent attempt to establish segregation shall be made; and
(b) where required by the Director, one of the zones shall be sealed off or abandoned.
(5) Where proof of segregation of zones is not submitted to the Director as required by this section, the well shall be shut in or produced in such manner as instructed by the Director.
(6) At least three days notice shall be given to a Petroleum Inspector of the intention to carry out a test required by this section.
190. Disposal of Produced Liquids.
(1) All formation water and other waste liquids produced from a well or refuse from tanks shall be disposed of by a method that is environmentally acceptable and does not constitute a health or safety hazard.
(2) The concentration of petroleum in any formation water discharged into the sea shall not exceed the limits set by the current Papua New Guinea environmental legislation.
(3) Produced formation water shall not be discharged into the sea unless–
(a) there is approved equipment which monitors, records and ensures that the concentration of petroleum in the discharged formation water specified in Subsection (2) is not exceeded; and
(b) an approved test is conducted at intervals not less frequently than weekly to check the performance of the equipment referred to in Paragraph (a), and the test results are recorded; and
(c) the records referred to in Paragraphs (a) and (b) are available to a Petroleum Inspector for a period of at least six months from the date on which the record is made.
191. Production Rate Restriction.
(1) The Director may restrict the amount of oil or gas or both that may be produced from a pool by limiting, where such limitation appears to him necessary, the total daily amount of oil and/or gas that may be produced from a pool, having regard to the efficient use of gas for the production of oil, the demand for oil or gas from the pool and/or the ultimate recovery of the oil or gas.
(2) Where the Director is satisfied that the licensee is not complying with any conditions imposed by him, or any requirement of this Part with respect to any pool, he may vary the rate at which petroleum is being recovered from that pool.
192. Enhanced Recovery.
(1) In order to enhance reserves recovery, and after due consideration of the economic feasibility thereof, the Director may, by written direction to the licensee–
(a) require enhanced recovery operations in any pool or portion thereof, and for or incidental to such purpose, require the introduction or injection of a fluid into any pool or portion thereof; and
(b) require that any produced gas be gathered and processed where necessary, and the gas or products therefrom marketed or injected into an underground reservoir for storage or for any other purpose.
(2) No scheme for–
(a) enhanced recovery, including gas cycling in any field or pool; or
(b) the disposal of any fluid or other substance to an underground formation through a well,
shall be proceeded with unless the Director has approved the scheme upon such terms and conditions as he may prescribe.
193. Use of Consumption of Gas by the Licensee.
The licensee shall not use, flare or consume gas produced from a well, for a purpose other than–
(a) for pressuring, cycling or reservoir pressure maintenance; or
(b) for light or as process fuel,
until he has filed, with the Director, particulars concerning such use, flaring or consumption, in such detail as the Director may require and the Director may, by written direction, require the licensee to use, flare or consume the gas in a particular manner within set rates.
194. Use of Direct Well Pressure.
Direct well pressure shall not be used other than for the operation of gas operated valves or regulators, chemical injection pumps, pressure testing of wireline blowout preventers and lubricators, to aid in unloading fluid to restore production from an adjacent well, equalizing the pressure differential across a subsurface safety device or such other purposes as may be approved in writing by the Director.
195. Tanks and Storage.
(1) Oil shall not be stored in unprotected earthen sumps except as an emergency measure.
(2) All permanent tanks for petroleum liquids, or batteries of tanks, shall be designed and constructed in accordance with the applicable API Standard for design and construction, and PNGS 1503, the Flammable and Combustible Liquids Code for installation, or such other Standards or Codes or Specifications as the Director may from time to time approve in writing.
(3) An oil storage tank shall not be placed within 50m of any well or building, unless otherwise approved by the Director.
(4) An oil storage tank of a capacity greater than 1,000 barrels shall be surrounded by a bund wall capable of holding 150% of the capacity of the tank.
196. Tank Battery Control Valves.
All field tank battery installations shall be so arranged and provided with control valves as to permit the ready shut off of oil or gas in the event of fire.
197. Entering Tanks or Other Production Vessels.
(1) A tank or other closed vessel shall not be entered by any person until the tank or vessel has been declared free of hazardous substances by an authorized person and the vessel shall have sufficient oxygen present to sustain human life.
(2) All lines leading to a tank or vessel referred to in Subsection (1) shall be depressured and either disconnected or isolated prior to the entry of any person.
(3) Where in an emergency it is necessary for a tank or vessel which previously contained flammable or toxic substances to be entered by a person, such person shall–
(a) wear breathing apparatus; and
(b) shall be supplied with a life-line held by some responsible person outside each tank or vessel, who shall have a breathing apparatus at hand to effect rescue if required; and
(c) shall not enter the vessel without being attached to a rescue line that is being held by another responsible person.
198. Monthly Production Report.
(1) The licensee, in respect of any well that during a given month, produced or was capable of producing crude oil or gas, or into which crude oil, gas, natural gas liquids, water, air or other substance was injected or disposed of during the preceding month, shall not later than the last day of the following month, submit to the Director, in form and content acceptable to him, a full report for the preceding month of the following applicable items–
(a) the amounts of crude oil, condensate, gas water or other substance produced from the well; and
(b) the amounts of crude oil, gas, natural gas liquids, water, air or other substance injected or disposed of into the well; and
(c) the average separator or treater pressure and temperature if a separator or treater was in use; and
(d) the wellhead pressure and temperature; and
(e) the choke size; and
(f) the number of hours during which the well produced, was injected into, or was used for disposal purposes; and
(g) where the well is producing from more than one reservoir, the data required in Paragraphs (a) to (f) in respect of each reservoir; and
(h) particulars of the disposition and deliveries of the crude oil, condensate, gas, water or other substance produced from the well; and
(i) cumulative production of oil, condensate, gas and water produced from the well; and
(2) Where a well is shut in, the licensee shall, unless otherwise approved by the Director, each month submit a return so stating until production is resumed or the well is abandoned.
199. Routine Production Operations.
(1) The Director shall be notified of all routine down hole well operations in a supplement to the monthly production report.
(2) A supplement under Subsection (1) shall indicate only the well number, type of operation or treatment and the date it was carried out.
200. Annual Production Report.
An annual report on total production from a field, in an acceptable form, shall be submitted by the licensee to the Director.
201. Reservoir Data.
(1) Unless otherwise approved by the Director, routine reservoir measurements, conforming to normally accepted practices of producing a field in a sound and efficient manner, shall be taken, and the results shall, within one month thereafter, be reported to the Director.
(2) Routine reservoir measurements under Subsection (1) shall include–
(a) for gas wells in a producing field–
(i) water production from each zone through a separator half yearly; and
(ii) salinity of water produced from each zone half yearly; and
(iii) a yearly flowing or static bottom hole pressure survey that includes static pressure gradient surveys; and
(iv) gas and condensate analyses every two years; and
(b) for oil wells in a producing field–
(i) a flowing or static bottom hole pressure survey with static pressure gradient survey yearly; and
(ii) salinity of water produced from each zone yearly; and
(iii) an oil analysis every two years.
(3) Unless otherwise approved by the Director, an annual reserves report, in a form acceptable to the Director, shall be prepared for a Petroleum Development Licence by the licensee.
(4) The Director may require that other reservoir measurements, necessary to ensure the establishment of efficient reservoir control, shall be carried out and reported to him.
(5) All available reservoir data, the results of associated studies and petroleum reserve estimates of a pool or a field, shall be submitted without delay to the Director.
202. Report on an Enhanced Recovery Project.
(1) Where approval has been given for an enhanced recovery project, reports in accordance with Subsections (2) and (3) and any variation to those requirements that may be specified by the Director from time to time, shall be submitted to the Director.
(2) During the first two years, or such other period as the Director may specify, from the date of commencement of the enhanced recovery project, a report detailing the progress and performance, at regular intervals as approved by the Director, shall be submitted to the Director within two months of the expiration of the approved interval.
(3) A report required by this section shall set out the following information for the approved interval covered by the report:–
(a) the daily average rate during each month of oil production of each producing well, and of the whole scheme;
(b) the average gas/oil and water/oil ratios during each month of each production well, and of the whole scheme;
(c) the monthly cumulative gas, oil and water production for each producing well, and of the whole scheme;
(d) for each type of fluid being injected, the average rate of injection per operating day during each month to each injection well, and to the whole scheme;
(e) for each type of fluid being injected, the average wellhead injection pressure during each month for each injection well, and for the whole scheme;
(f) for each type of fluid being injected, the monthly cumulative volume of fluid injected to each injection well and to the whole scheme;
(g) the area-weighted formation pressure for the whole scheme;
(h) for each type of fluid being injected, the average injectivity index during each month for each injection well, and for the whole scheme, which index shall be determined as the daily average injection rate divided by the difference between the sand face pressure and the average formation pressure;
(i) the date and type of any well treatment or workover which shall be indicated, in the case of injection wells, on the report of the injectivity index and, in case of producing well, on the report of the daily average oil production rate;
(j) calculations on a monthly and cumulative basis of the balance between fluids injected to and fluids withdrawn from the part of the pool subject to the scheme;
(k) calculations on a monthly and cumulative basis of the balance between fluids injected to and fluids withdrawn from each injection pattern area or sector specified in the approval;
(l) such other interpretive information as the licensee considers necessary to evaluate adequately the progress and performance of the scheme.
(4) Subsequent to the first two years of the scheme or period as specified by the Director, the report required by this section may be submitted annually in a form acceptable to the Director.
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