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Exploration & Production: The Oil & Gas Review - 2003, Volume 2
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Introduction
Technology strategies remain at the forefront of discussions regarding potential catalysts to create differential performance and value. Aggressive technology approaches seem to bear the promise of breakthrough ‘step-changes’ in drilling performance. Conservative technology approaches seem reserved and unable to capture the value potential of emerging technologies. Which type of strategy is actually desired? What can we learn from stepping back and studying the topic objectively?
Historical Perspective
Historically, the drilling industry has evolved via evolutionary changes and improvements to today’s actively working and successful systems. Technology advances that focus on specific elements of the drilling system without generating substantial impact on other elements are clearly most successful in terms of development and implementation. Initiatives that have attempted wholesale changes to the fundamentals of conventional drilling systems have been far less successful although significant time may be required for these observations to become clear.
Examples of major drilling technology advances that resulted from optimisation or innovative changes to specific elements of the system include:
- steerable mud motors;
- polycrystalline diamond compact bits;
- synthetic oil-based mud;
- top-drive systems; and
- rotary steerable systems.
Examples of initiatives that have attempted more macroscale changes to conventional drilling systems and techniques include:
- slim-hole and continuous coring drilling;
- underbalanced drilling (UBD);
- dual-gradient drilling (DGD);
- coiled-tubing drilling (CTD);
- multi-lateral wells; and
- high-pressure drilling.
Some of these macroscale initiatives, such as UBD and CTD, now play important niche roles in the industry. Their applicability, however, is extremely narrow in relation to the industry at large. The forecasts that were once made for how these technologies would dominate the industry and render conventional drilling obsolete can be seen as inaccurate at this time. Several of these macroscale initiatives, such as slim-hole drilling and high-pressure drilling, had very limited lifespans and are absent from the current technical landscape. What can be learned from these lessons in technology development and subsequent demise is a key issue that should be objectively addressed if the current industry community is going to improve performance in optimising technology investments.
Various points emerge from reviewing such case histories. For example, forecasting value that can be derived from a proposed technology and estimating accurately the real risks of execution and implementation are extremely difficult. In this area, human factors inevitably play a major role. Proponents of a certain initiative have a tendency to go into a marketing mode for the technology. Future scenarios are forecast whereby very high values will be derived. Multitudes of current drilling problems will be resolved by the proposed initiative. Data is selected and highlighted that supports the marketing position. Data contrary to the position is ignored or discounted. As the data, analysis and forecast pertain to the future, who can step forward and assert that they have definitive information that conflicts with the scenario? Obviously, nobody with their feet on the ground can take such a stance, so the scenarios go largely unchallenged despite years or even decades of case histories that illustrate the contrary.
Another serious problem with forecasting is the inability of the industry to gauge its own capabilities. Current perceived limits with existing equipment, conventional procedures, etc., are not necessarily real limits. These are often just perceptions or limits only with regard to existing experience. Given the advances in theory and application of mechanical wellbore stability, mud chemistries, better understanding of torque/ drag behaviours, etc., those well geometries and more severe wells can now be drilled almost routinely.
Taken as an integrated discipline, an organisation comprising drilling engineers, equipment and service support personnel, field supervisory professionals, tool pushers, drillers, rig crews, mud engineers, mud loggers, etc., form a powerful organisation with hundreds of years of composite experience. It should come as little wonder that such groups can innovate and solve problems literally overnight. Such team efforts have been responsible for many advances and achievements that were previously thought to be impossible. Some examples are highlighted below:
- Unocal Corporation’s extended-reach drilling (ERD) California offshore work in the late 1980s included several wells, which simply should not have been possible.
- This work resulted in BP changing its approach to the Wytch Farm development and pursuing extreme ERD wells beginning in 1993. The Wytch Farm case history is an excellent example of how specialised, but nevertheless conventional, equipment and procedures can be optimised to achieve required operational objectives.
- Debates are currently on-going about how far into deep water wells can be effectively drilled. One major operator believes that, in water depths of up to 10,000 feet, conventional wells and techniques will be completely sufficient (i.e. no surface blowout preventers needed, no DGD, no expandable casing, etc. required).
Each of these cases requires a great deal of explanation in terms of the details of what was achieved and how specific problems were overcome. This ‘know-how’ is the essence of technology because it represents what was really done to overcome the challenges of these wells and get the job done.
Clarification of that definition of technology is critically important because so many people confuse ‘technology’ with science or research. Useful drilling technology is not about the limits of science from a research perspective. Useful drilling technology means an effective, reliable and easily accessed way of solving a real world problem in a cost-effective (hopefully, the most cost-effective) manner. Falling away from these boundaries in any way (i.e. solutions looking for problems, lack of reliability, systems without fast and responsive delivery, high-cost systems, etc.) will rapidly result in the technology stagnating and ultimately being withdrawn from the market as another case history of failure.
Additional useful perspective can be obtained by examining industries analogous to drilling. Many cases, authors or speakers like to compare drilling technology with the advancement of the personal computer (PC). This is entertaining, due to the dramatic differences, but a flawed analogy because of the fundamental difference between the evolution of the PC, which is subject to miniaturisation, and the drilling industry, which is not. Drilling will always involve the excavation of a large amount of earth in order to create a pathway for the hydrocarbon resources to be brought to surface for use. There is no way to achieve this reality with the miniaturisation of rigs, wells, etc.
A more parallel analogy can be drawn between the drilling and automobile industries. In this case, both industries and technologies have certain hard boundaries around physical requirements. Considering automotive technology, an interesting question is whether it should be characterised by evolutionary change or revolutionary ‘step-change’. For perspective, an example would be to compare a 1909 (first production year) model car with a 2003 model. Clearly, the 2003 model is far superior to this early ‘horseless carriage’ and the advantages with regard to power, performance, comfort, safety, reliability, efficiency, utility, etc., of the 2003 model could not be questioned. On the other hand, they both have four tyres, an internal-combustion power source, a steering wheel, an accelerator, brakes, lights, passenger seats, a storage area, etc. From this perspective, it could be argued that the fundamentals of the automobile have not changed and it has been a steady flow of incremental element-level improvements and innovations that make the 2003 automobile so much more advanced than the 1909 model. Such a ‘revolutionary’ change is actually the cumulative effect of years and years of incremental advances.
Looking back at the drilling industry, one must wonder how advanced our systems could be if we were as dedicated to the continuing advancement of our product as the automotive engineers are to theirs. The automotive culture of annually obsolescing their current product with a redesigned and advanced version alone is a behaviour that the drilling community needs to study respectfully.
Category:
Drilling & Well Services
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Dr Mike L Payne is a Senior
Advisor for BP America, Inc., in their
Exploration and Production Technology
Group. Previously an Advisor for ARCO
Gasoline, he has 23 years of drilling
experience including operations,
computing, technology and consulting.
Dr Payne has extensive industry
publications, is Chairman of the
American Petroleum Institute (API)
Pipe Committee (SC5), Convenor
of International Organization for
Standardization (ISO) SC5 Working
Group 2 and SC4 Working Group
1, and serves on the Board of the
Drilling Engineering Association (DEA).
He has been recognised both as a
Society of Petroleum Engineers (SPE)
distinguished lecturer and as the SPE
International Drilling Engineering
Award recipient for 2000. Dr Payne
holds BSc and PhD degrees in
Mechanical Engineering from Rice
University, an MSc degree in Petroleum
Engineering from the University of
Houston, executive education from
the University of Chicago Graduate
School of Business and is a
Registered Professional Engineer.
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