Evaluating Closed Loop Systems

Abstract

Introduction The purpose of this paper is to describe a method to determine whether it is cost effective in any given situation to drill pitless by using a closed loop system for water based muds. For a meaningful determination to be made, various types of closed loop systems must be compared with one another in a manner which accurately accounts for each cost component of the entire closed loop system. After a proper comparison of closed loop systems is made and one system is selected for economic comparison to conventional drilling with pits, the relative costs of pit versus pitless drilling must be compared. In applying this approach in evaluating the relative costs of conventional and pitless drilling, the operator should only consider the tangible benefits of pitless drilling which can be measured in terms of cost savings. The intangible benefits should be recognized and appreciated but should not be given economic weight in the decision process. While closed loop systems have been used in the oil and gas industry for several decades, their use has been limited to situations where reserve pits were prohibited by law or were physically impractical. Few operators considered pitless drilling absent unusual circumstances because the cost of constructing and reclaiming reserve pits was nominal and closed loop systems suffered from a reputation of questionable dependability, inadequate capacity to keep up with high rates of penetration and extraordinarily high chemical cost. Currently pit construction and reclamation costs can comprise a significant part of the drilling budget due to increasingly stringent governmental regulations and enforcement policies as well as surface owner concerns. At the same time, modern closed loop systems are becoming more dependable and efficient. Drilling pitless is becoming an economically attractive alternative in many drilling programs. The Elusive Definition Not all closed loop systems are created equal. The operator is usually provided with closed loop system cost estimates which do not take into account all of the costs of using a closed loop system. Typically, only the equipment rental rate is quoted by the service company. This is a bit like someone purchasing a new car, with the dealer providing financing and taking the old car as a trade-in. The customer may be quoted a low price on the new car but if the financing costs are high and the trade-in value of the used car low, the deal may not be as good as it first appeared. In order to develop a method of comparing various closed loop systems, let us define a closed loop system simply as a mechanical and chemical system which will allow the operator to drill without a reserve pit. The system, as thus defined, includes some solids control equipment which may already be on the rig such as the shaker, desander, desilter and the proper centrifuge. The closed loop system will also include a polymer flocculation unit which will not be part of the conventional rig's solids control system. The polymer flocculation unit makes up polymer by either diluting liquid polymer or placing dry polymers into an aqueous solution. It then adjusts the pH of the effluent as required, doses the effluent with polymer and other chemicals as needed, mixes the effluent with the chemical additives and transports the mixture to the centrifuge for separation of solids, including small suspended solids. Polymer flocculation units, sometimes referred to as "floc boxes", can range from a simple pump and pipe which pumps liquid polymer into the feed line of the centrifuge, to more complex units which use less expensive dry polymer from which liquid polymer is made up on site. P. 611