Drilling Rigs Evolve Seeking Productivity Gains

Abstract

The vision of fully automated drilling rigs driven by big data gathered in real time looks so far off but there are people working on a road map to help the oil and gas industry find its way there some day. Drilling rigs working onshore are evolving, driven by the need to manage the high cost of mass producing thousands of wells needed for unconventional development. The rate of penetration (ROP) is the most commonly used measure of efficiency, but the location and the quality of the hole can be significant variables. The number of wells drilled per year is up as the rig count goes down with many older rigs finally being retired. The rig market overall looks soft, but demand remains strong for late-model rigs wired to handle computer controls (AC drive). While they command higher day rates than older rigs, by drilling wells in fewer days they can help oil companies lower the cost per foot drilled. At a panel discussion at the recent IADC/SPE Drilling Conference and Exhibition in Fort Worth, Texas, Michael Power, manager of unconventional resources for global drilling and completions at Chevron, said the company is seeking to reduce the average cost of drilling onshore wells in unconventional formations by 15% or more a year. The goal has been regularly reached with a combination of incremental improvements. In addition to the rate of penetration, gains can be made in other ways, such as reducing nonproductive time, or the time and trucks needed to haul a rig to a new site. “A level of automation speeds drilling and movement of rigs,” Power said. One indication of the pace of change is the growing market share of Helmerich & Payne (H&P), whose rigs now represent 15% of the onshore market in the United States—about twice its share in 2001—and the company is adding at least two rigs a month to its fleet. Its rise dates back to its decision to be the first in the industry to design and build a new generation of drilling rig called FlexRigs. A critical difference is those rigs were wired to accommodate systems from the company automating certain functions, increasing a driller’s productivity. It has built five generations of the rigs and is working on the next. Significant drilling time reductions have been a trend in unconventional exploration. H&P has drilled 10,000 ft of hole in 10.5 days from the start of work on a horizontal well to when the rig is released, said Jeff Flaherty, senior vice president of land rig operations at the company. But gains in the rate of penetration are getting harder to find. “We are moving to the short end of the bell curve on the time to drill,” he said Ever faster drilling takes its toll. “Unconventional drilling is hard on equipment and hard on people,” said Flaherty, who said the cost is going down per foot drilled, but the wear and tear is squeezing the company’s profit margins.