By Mike Killalea, editor & publisher

This is the downturn everyone expected. They just didn’t expect it so soon. Anyone with a sense of history of the oil and gas business is wise to the reality that a ceaseless upward cycle just is not in the cards. The cards always come tumbling down.

We are experiencing the most sudden deterioration in commodity prices since 1982-83, just as a few months ago we witnessed unprecedented increases. But that earlier debacle shocked us. That’s because the then-mantra was of an endlessly expanding energy business – kind of like the Big Bang. I was a freshly minted, wet-between-the-ears petroleum engineer. The smart guys’ discourses on the industry’s positive outlook made sense. I bought it. Then the bottom fell out.

But the dynamics of the energy industry in the context of the overall economy have changed. In the late 1970s and 1980s, such prosperity as we D&C people enjoyed was much a function of politically driven supply constraints – embargoes and the like – and an imperfect understanding of the true supply picture – à la, “The world is running out of natural gas!”

In truth, energy prosperity was countercyclical to the robustness of the overall economy back then. DC’s website shows a graph with a remarkably close correlation of US unemployment vs annual inflation-adjusted oil price. As oil increases, so, after a beat, does unemployment. The reverse was also true.

This demonstrates what we already know: that much of the prosperity the world’s economic engine enjoyed was driven by cheap oil.

Our recent upturn, though, was driven, at least initially, by a real economic thirst for energy. Sure, political instability played a role. And speculation drove prices through the roof. But that was later.

So much for history. What do we do now?

PUT PEOPLE FIRST

The incessant drumbeat of layoffs has already begun sounding. Understandable, perhaps, but maybe not so wise in the long term. My information is that recruiting, hiring and training costs triple the expense of retention.

Not everyone has opted for knee-jerk personnel reductions. The IADC Career Connection program is returning to Fort Hood, Texas, for a Returning Military Campaign (RMC) job fair. A dozen IADC member companies intend to recruit at the largest transition base in the United States. It’s estimated that 2,000 soldiers will attend.

Also, a recent survey of DC readers on www.DrillingContractor.org reveals that 46% will either increase recruiting/training (14%) or continue at the same pace as earlier (32%).

Because the expectations for our industry are based on true economic demand in this new world, and it seems inevitable that real economic demand will awaken from hibernation, isn’t it reasonable to expect a return of robustness to our business? Please put people first. Let’s be ready for the upturn we expect.

For an expanded version of this column, go to www.DrillingContractor.org. You can reach Mike Killalea at mike.killalea@iadc.org.

The average age of the worldwide well servicing rig fleet is over 25 years old, and many of these rigs are much older. The idea of using 25- to 30-year-old equipment seems ludicrous in most industries, yet there are still more rigs working today over 25 years of age than there are under age 10.

From 1982 until 2003, almost no new drilling or well servicing rigs were built. From 2004 to 2008, quite a few newbuilds were added to both fleets, yet very few old rigs were retired. Now, rig orders for 2009 and beyond are being canceled daily, leaving this vital industry in much the same shape as before.

Bottom line is, our well servicing fleet continues to get older every day, and we will continue to see more and more mast failures if we do not increase the depth and frequency of our API RP-4G inspections.

In 2001, API RP-4G was revised in response to the problem of aging and deteriorating derricks in the US well servicing fleet. It was determined that inspection and repair of aging derricks was the No.1 technical issue affecting our rigs all over the country. A committee was formed consisting of several US well servicing contractors and manufacturers who worked to improve the language involved with API RP-4G. Here are the highlights:

Category I

Visual observation of the mast/derrick and substructure by rig personnel during operations for indications of inadequate performance.

Category II

Scope: Category I inspection plus a more thorough inspection of, but not limited to, load-bearing areas and sheaves for cracks, damage, corrosion, loose or missing components and premature wear. This more detailed inspection should be performed during rig-up operations.

Qualifications: Personnel undertaking Category II inspections will be individuals designated by the owner company who have adequate experience and knowledge in masts. These individuals will typically be experienced field superintendents, engineers, rig supervisors, rig operators or operations managers.

Category III

Scope: A thorough visual inspection of all load-bearing components and members should be conducted to determine the condition of the mast, derrick or substructure and documented. Inspections on well servicing, truck- or trailer-mounted masts should include observation of rig-up/rig-down operations.

Qualifications: The individual supervising the Category III inspection must possess adequate knowledge and experience. Typical qualified persons would be an engineer, an NDT technician, an ASNT Level II Technician, or a senior service operations person, designated by the owner company or others, provided they meet the criteria of experience, training and knowledge.

Documentation: The completed (and signed) checklist and any major repairs are to be documented in the permanent rig file.

Category IV

Scope: A Category III inspection plus the equipment to be disassembled and cleaned to the extent necessary to conduct NDT of all critical areas. An ultrasonic thickness test is recommended on all tubular style (or closed style) members to test for internal corrosion. Internal cameras, usually run on cable, may also be used to visually inspect for internal corrosion. All welds (100%) shall be visually examined. All welds in critical areas shall be inspected using the magnetic particle (MPI) or liquid penetrant (PT) method in accordance with Section 6 of AWS D1.1.

Qualifications: The Category IV inspection should be conducted by, or closely supervised by, a certified associate welding inspector (CAWI) or higher certification, professional engineer or an original equipment manufacturer (OEM) representative. In addition, Category IV inspectors should have previous experience and satisfy the requirements of Category III inspectors. NDT inspectors for a Category IV inspection would be required, as a minimum, to have certification as an ASNT Level II Technician.

Personnel performing visual inspection of welds shall be qualified and certified as an AWS-certified welding inspector, or an engineer or technician who, by training or experience, or both, in metals fabrication, inspection and testing, is qualified to perform inspection of the work.

Overall: Welders on derrick and mast repairs must be certified by an independent laboratory in accordance with AWS D1.1 and should have experience in mast maintenance. All welding completed should be in accordance with the requirements of AWS D1.1.

Documentation: In addition to the documentation requirements above, the 4G recommends that “the user/owner shall maintain an equipment file containing pertinent information regarding the mast and substructure. The file should include the following: Records of Category III and Category IV inspection shall be entered in the equipment file related to or indicating the load-carrying capacity of the mast and substructure. Entries describing repair, modification and testing activities shall be included in the owner equipment file.” Beyond this explanation, the specific information we recommend be maintained in the rig file is identified on a line-item basis.

Anchors: One of the most important pieces of the API 4G is the language surrounding the use of temporary anchors. It states that “screw-in anchors will be installed and verified utilizing a mechanical method (pull tested or shear torque method).” This means manual screw in anchors put down with a post hole digger, and four very tired rig hands will not do. In addition, it clearly identifies the responsibilities of the operator, contractor and the anchor-testing company in order to minimize the potential for accidents in this area.

“The rig contractor shall be responsible for:

•  Ensuring that anchor capacities are verified prior to attaching guywires to the anchors, that the verification is less than 24 months old and that anchor spacing and capacity is suitable for the mast guying pattern and anticipated loading.

•  Maintaining all guywires and end terminations in good working condition.

•  Inspecting anchors for damage or deterioration prior to rigging up.

•  Inspecting surface ground conditions that might indicate reduced anchor capacity.

•  Properly aligning the rig in relation to the wellhead and anchors.

•  Placing a visible marker on each guywire.

•  Replacing soil around anchor.

The wellsite owner/operator shall be responsible for:

•  Installing anchors at each well site.

•  Providing anchor capacity verification.

•  Replacing anchors that are damaged or excessively deteriorated or that fail anchor capacity verification.

•  A permanent file record for anchors that are installed or tested shall be maintained. The file should include dates of installation, each capacity verification, pull test charts and the name and telephone number of the party conducting the capacity verification.

•  Placing a visible marker on each anchor furnished, installed or specified by the well site owner/operator.”

Conclusion

A derrick failure can be a catastrophic event in terms of equipment damage, lost revenues and far more importantly, human life. Our industry needs to pay much closer attention to maintaining and inspecting our masts and load-bearing structures before it’s too late.

Joe Eustace is president of Pioneer Production Services and chairman of the IADC Well Servicing Committee.

Salvador – it’s Brazil’s oldest city (founded in 1549), one of its largest (3 million-plus people in the metropolitan area), and a vibrant place known as the country’s “Capital da Alegria,” or “Capital of Happiness.”

It’s also a city that Dr Otto Santos of Petrobras is passionate about: He was born and raised there, and, other than brief stints in the United States to complete post-graduate studies and training, “I’ve never left,” he said.

Dr Santos is also passionate about drilling – and teaching others about drilling. So when he graduated from Petrobras University himself in 1977, staying on at the Salvador campus as an instructor seemed like a perfect career choice. In the following three decades, as a Petrobras University professor, Dr Santos has not only trained fresh graduates into working petroleum engineers, he’s also kept existing engineers up-to-date with an extensive curriculum of continuing education courses.

The industry is facing a huge personnel challenge, he emphasized, and we must tackle that through vigorous training. “We have to recruit, train and retain a lot of people – a whole new generation. In my opinion, we are very good in terms of technology, and we have a lot of new equipment and new rigs. But we don’t have experienced people.”

Over the past seven years, Petrobras University has trained more than 1,000 new petroleum engineers, averaging about 150 a year, he said. “Right now we have 200 new engineers studying there. We take these college graduate engineers – such as civil engineers or mechanical engineers – and put them through a year of intensive training so they can become petroleum engineers.”

Those numbers apply to only petroleum engineers, by the way. If you count students from other engineering disciplines and from geology and geophysics, the current student population comes to about 1,500 people, he estimated. “We have a huge program here.”

Well control

Aside from teaching and training our current and future workforce, Dr Santos has also done extensive research throughout his career, directing at least six thesis and authoring more than 30 industry articles (and co-authoring 20-plus more).

One of his favorite topics: well control. He firmly believes that it plays a critical role in drilling and safety and is something that everyone must understand. Under his coordination, in July 1996 Petrobras became the first operator to achieve IADC’s WellCAP accreditation. “In my opinion, everybody in my company has to have a WellCAP certificate in order to go to the rig, especially the new people. It’s important to train the new generation in well control,” he emphasized.

The company’s focus on well control has certainly paid off: Since 1996, its cumulative blowout rate per 1,000 wells has dropped from nearly 3.25 to 0.5.

Petrobras growth

No matter how you look at it, Dr Santos has considerable tasks on his hands, considering Petrobras’ growth over the past decades and the growth it anticipates in the coming years. “When I joined Petrobras, its production was about 150,000 barrels a day. Now it’s more than 2 million barrels a day. Petrobras also has become a leader in terms of drilling and production in deepwater and ultra-deepwater,” he said.

Now, with the development of the substantial subsalt frontier, he continued, the company is facing new, maybe even tougher challenges. “We’ll be spending a lot of time and money to improve drilling through salt formations and the rate of penetration in the carbonate rocks underneath the salt.”

In terms of people and equipment as well, new challenges will drive further improvements for the company: “After subsalt, Petrobras will transform into a completely different company,” he said.

Personal challenges

Dr Santos is certainly doing his part to help the drilling industry face its upcoming challenges, whether in personnel training or technology research or well control safety. On a more personal side, he has a couple of challenges coming up as well. One, he said, is being selected as a 2009-2010 SPE Distinguished Lecturer. “My challenge is to go through this very important program. It’s an honor, and I will enjoy it.”

His second challenge is less immediate, nevertheless looming in the background: retirement, perhaps within the next couple of years, he says. “I have to see what I’m going to do after that.”

And in case you mistakenly think that Otto Santos might really leave behind the world of drilling for a life of leisure, he’s quick to clarify: “Of course I won’t stop what I do. I will keep on working.” He notes that he’s keeping his options open, even to proposals from abroad.

Looks like leaving Salvador may be an option, but leaving drilling is certainly not.

National Oilwell Varco’s Frank Springett, vice chairman of the Future Technology Subcommittee of the IADC Advanced Rig Technology Committee, has been selected as the inaugural winner of World Oil’s “Next Generation Award.” The award recognized Mr Springett for his innovative thinking and numerous contributions to developing new products for the industry. He was the lead designer of the Continuous Circulation System (CCS), the Shaffer Low Force Shear Ram concept, and numerous subsea BOP stack and control system designs. He already has been awarded ten patents, with ten more pending. Mr Springett began his career with NOV in 2001.

James Justiss receives API Gold Medal for service, leadership

James F Justiss Jr, president and chairman of Justiss Oil Co, received the API Gold Medal for Distinguished Achievement at an awards ceremony held 20 October 2008 in Scottsdale, Ariz. The award recognizes his lifelong commitment to the industry and his company, community and family.

In accepting the award, Mr Justiss praised his industry colleagues, “who have done so much to make this world a better place” by providing energy, often at cheap prices, to the general public, he said. Mr Justiss has been a member of the API Board of Directors for more than two decades.

Noble employee wins IMO award for bravery at sea

Rodolfo Fonseca da Silva Rigueira of the drillship Noble Roger Eason has received the 2008 IMO Award for Exceptional Bravery at Sea. He was nominated by the government of Brazil for prompt and effective action in saving six crew members from a dangerous fire on the ship. According to the IMO, the fire originated from an explosion, causing imminent risk of death to crew, including Mr da Silva Rigueira. Instead of evacuating, he repeatedly exposed himself to the fire and very high temperatures to save his six colleagues.

A total of 32 nominations were received at IMO and considered by an assessment panel for this award.

W. Matt Ralls named Rowan president, CEO

W. Matt Ralls has been named the president and CEO of Rowan Companies and member of its Board of Directors, succeeding D.F. McNease, who announced his retirement in late October 2008.

Mr Ralls most recently served as executive vice president and COO of GlobalSantaFe. He has also served as senior VP and CFO of GlobalSantaFe. He joined Global Marine in 1997. He holds a mechanical engineering degree and a Masters in Business Administration from UT Austin.

Rowan’s Board of Directors also named Jack Lentz as chairman of the Board. He has held a position on Rowan’s Board since 1990.

Canrig, Epoch Well Services merge

Canrig and Epoch Well Services have merged to create a drilling technology company known as Canrig Drilling Technology, headquartered in Houston, Texas.

New VP at Hawk Industries

Hawk Industries recently hired John Warren as its new vice president of sales and marketing. He previously spent 22 years with National Oilwell Varco, where he held management positions in engineering, project management, sales, service and product management.

Signa Engineering buys Fisk/MEI

Signa Engineering has acquired Fisk/MEI Inspection Services, an inspection and expediting services company for oilfield equipment and tubulars. With the addition of Fisk/MEI, Signa will expand its body of oilfield services and diversify its interests in the energy industry.

17 companies recognized for workplace safety

Seventeen companies have received Texas Mutual Insurance’s top honor for workplace safety: Bandera Drilling; Creek Swabbing & Roustabout Service; Five Star Consolidated Co; Hi-Plains Trading Co; K Marketing, which does business as Longhorn Propane; Ludlum Measurements; Pierce Construction; Reef Services; Refinery Terminal Fire; Rocker A Well Service; Sundown Operating; Steinberger Drilling Co; T&L Lease Service; T-Rey Properties; Tec Well Service; Viking Drilling; and Well-Pro Services. The companies have demonstrated their commitment to workplace safety by carrying out an exemplary safety program and controlling workers’ compensation losses.

Executive shuffling at Keppel

The following executive moves at Keppel Corp took effect 1 January 2009: Lim Chee Onn will relinquish his role as CEO and will continue to serve as non-executive chairman of Keppel Corp. Choo Chiau Beng will leave his post as CEO of Keppel Offshore and Marine (KOM) and will become CEO of Keppel Corp. Teo Soon Hoe will retain his responsibilities as senior executive director and group finance director. Tong Chong Heong, managing director and COO of KOM, will be appointed CEO of KOM.

NOV Elmar UK announces £10 million in contracts

NOV Elmar UK has announced contract wins of £10 million. They include the supply of eight 20-tonne TerraLift trucks to a leading oilfield services provider for operations in Algeria and Libya. The trucks have a built-in 10,000-psi pressure test facility and can reach a maximum height of 120 ft. Further work has been secured with Maersk to supply five NovaWinch units.

Industry pioneer James Armstrong passes away

James Eubank Armstrong, founder and president (1981-92) of IMI Engineering Co, passed away 24 October 2008. He was a pioneer in the advance of the rock-over trailer, modular crane, workover rigs moved to a platform via work boat as opposed to a barge, minimum-space platform rigs and others.

Cameron acquires Precision Downhole Pumps

Cameron has acquired Precision Downhole Pumps, a US-based manufacturer of artificial lift equipment. Precision will increase the size and geographic reach of Cameron’s existing artificial lift businesses with manufacturing in Iola, Kan., and a distribution channel throughout the US.

IDM Group to become Louisiana Electric Rig Service

IDM Group completed its acquisition of Louisiana Electric Rig Service, a Rosenberg, Texas-based provider of SCR drives, generator controls, top drive controls and custom-engineered products, along with field support services, and the simultaneous merger of IDM’s existing AC electrical systems and controls business into Louisiana Electric. The combined company will operate as Louisiana Electric Rig Service.

Derrick Equipment to supply to Halliburton’s Baroid

Halliburton has entered into an agreement with Derrick Equipment Co to expand Baroid Fluid Services’ offering of solids control equipment and services. Derrick Equipment will supply a full range of products, including shale shakers, centrifuges and screens, to Baroid.

Atlas Copco offers DrillAir compressors

Atlas Copco has introduced its DrillAir range of compressors to provide the highest air volume at the highest air pressure available while being the most energy-efficient with the lowest specific fuel consumption for the air delivered. The redesigned DrillAir screw element ensures a 4% reduction in energy consumption compared with before, a reduced risk of leakages, and 15% lower thrust load. The new gear box configuration reduces forces on the bearing to provide increased working range of the element and energy savings.

DrillAir is offered in skid-mount, support-mount, tandem or wagon-wheel versions. All models use the A-rated, Caterpillar C18 Acert T3 diesel engine with a rating of 575 hp. They are also equipped with a 258-gal fuel tank, with optional 410-gal tanks for the skid or support versions to ensure higher fuel autonomy. An optional on-board electric refueling pump speeds refueling and reduces operational downtime.

Kevlar Pulling Grips lightweight, strong

Kevlar Pulling Grips are the latest addition to Lewis Manufacturing Co’ wire-mesh pulling grips line. These grips are made of plastic-coated Kevlar fibers that are lightweight yet stronger than steel wires. Kevlar grips are traditionally used in overhead or underground operations when pulling or suspending electric or fiber-optic cable. These grips do not have metallic fraying as traditional grips do. The grips can also be used when a metallic grip is unsuitable, such as when pulling into an energized environment. These grips are available in sizes ranging from ¼ in. to 8 in. in ¼-in. and ½-in. increments.

Landmark SeisSpace R5000 processes seismic data

Landmark, a brand of Halliburton’s Drilling and Evaluation Division, has released the SeisSpace R5000 software. The release delivers the time and depth domain processing tools required to process and quality-check large volumes of seismic data and provide superior seismic images to interpretation teams. The release also provides an open processing platform to support proprietary technology and specialty processing services.

Reflex Marine introduces Toro personnel transfer capsule

Reflex Marine has launched the Toro personnel transfer capsule, which can carry up to four passengers, protecting them from side impact and heavy landings and is buoyant and self-righting. Its ergonomic seat design allows it to be used without seatbelts (subject to company policy and local legislative requirements). It also fits into a standard shipping container. According to the company, the Toro will be certified with CE marking and ABS Type Approval.

Environmentally responsible grease from Castrol Offshore

Castrol Offshore, part of the BP Group, has responded to new environmental requirements by launching BioTac OG, an environmentally responsible grease developed specifically to lubricate the rack and pinion jacking mechanism of mobile rigs. Greases currently used for jacking gears are generally intended for other uses. It is being made available in different sizes and quantities to meet operator demand.

IPD launches new gasket sets for Capterpillar engines

IPD, a manufacturer of diesel and natural gas engine parts for Caterpillar applications, is presenting a new line of the IPD 1-2-3 Gasket Sets, designed exclusively for Caterpillar C18 engines. The system of gasket groups makes the engine rebuild job easier, faster and more accurate for the technician.

By John Auth, Diamond Offshore

In 2001, HSE personnel from BP, Chevron, ExxonMobil and Shell gathered to develop minimum safety awareness training requirements for all employees working offshore. This includes operator, contractor and third-party personnel. The result was the formation of the Contractor Operator Steering Team (COST). The initial effort resulted in a requirement for a training program that, while effective, did not recognize training efforts already in place in the industry, such as IADC’s RigPass. IADC sought and gained a position on COST to better clarify the extent to which RigPass meets or exceeds the minimum requirements to the rest of the team.

The COST group eventually became SafeGulf and is now an integral part of the core HSE values of these four major operators, as well as a number of independents. There have been a number of obstacles to overcome, not the least of which were Katrina and Rita appearing in the middle of the kick-off date for SafeGulf implementation. Along the way, the operators and the seven other industry members of the SafeGulf Advisory Group have developed a healthy respect for each others’ HSE efforts.

The SafeGulf curriculum is only one avenue to satisfy the requirement for “training before access” provision of these operators. RigPass is one of three other industry training regimes that will satisfy this provision.
RigPass was introduced in 1994 so that the industry would have a standard “awareness” level of safety training and an employee could present any new employers with a card that certified that he had completed this training. As employees moved between companies prior to RigPass, many times they would have to attend “basic” safety training prior to reporting for work. RigPass provided a means for both the employee and employer to save time and resources in the initial orientation process. It also certified a minimum level of safety awareness that could be depended upon from company to company.

RigPass provides the outline structure for a course. It stipulates each area of instruction but then asks the teaching organization to provide its methods for fulfilling all of these areas. The application for certification as a RigPass provider can be found on the IADC website at www.iadc.org. Each section of the application asks how you will deliver the information required and how you will verify that the student has received and understands the information.

The program was initially designed for member companies to use as a template to provide their own RigPass training. While a substantial number of drilling contractors still provide their own course, a number of commercial schools have applied for certification as RigPass providers and have been approved. That list can also be found online.

For organizations that want their RigPass cards to be SafeGulf-compliant, there are additional requirements. The employee’s picture and basic information must be submitted through an “accrediting organization” to the SafeGulf database. Since IADC is such an organization, the data submitted along with the correct barcode format on the card will be submitted automatically to the SafeGulf database. IADC’s accreditation and certification department will be glad to help you through this process.

When an employee arrives at the entry portal (heliport, dock, etc) where SafeGulf is required for access, his RigPass card will be scanned through the same equipment that is used for SafeGulf cards. At that point there will be a three image comparison – the face on the screen, the face on your ID (license, etc) and the face between your shoulders. If they all match, you are good to go. You have been identified and certified to have received the proper basic safety training to proceed offshore.

If you have an IADC RigPass card that has been submitted as SafeGulf-compliant through IADC, this card should be sufficient for access to offshore at all portals maintained by operators who are in the program. SafeGulf-compliant RigPass cards have a barcode that has been submitted to the SafeGulf Identity Database through IADC. As with any program, you may run into the odd dispatcher or security personnel at a portal that hasn’t gotten the “word” and may not accept your card. Please notify IADC immediately if you encounter this problem.

John Auth has been the IADC liaison on the SafeGulf Advisory Group since the association’s participation in that group. He is Diamond Offshore’s manager – HSE industry relations.

Enventure Global Technology has completed its 1,000th SET expandable job, installing a 47-ft 7 5/8 x 9 5/8-in. 36.0 lb/ft expandable cased-hole liner to cover damaged casing near the surface of the well. This enabled the customer to continue their drilling program. To date, Enventure has installed expandable systems in more than 30 countries for 146 operators. SET systems can be installed in casing sizes ranging from 3 ½ in. to 16 in., in lengths of less than 30 ft to over 6,700 ft, and in well depths exceeding 28,000 ft.

Delmar HCLS helps install heavy tree systems

Delmar Systems has used the Heave Compensated Landing System (HCLS) to successfully install three of the “heaviest tree systems in the world.” These 240,000-lb systems were installed at BP’s Viosca Knoll 915 (King South) and Mississippi Canyon 129 (Dorado) locations in October 2008 in water depths of 5,600 ft at King South and 3,500 ft at Dorado using the Edison Chouest AHV. The HCLS has been used for more than 150 subsea tree installations, as well as equipment recovery campaigns for equipment refurbishment and reuse. It has also been used in the Gulf of Mexico, Angola and Brazil.

New completion technology results in totally interventionless well in Woodford Shale

Marathon Oil announced it has participated in a successful step-out discovery well on the Brickyard prospect, in the northeast area of the Anadarko Basin, targeting the Woodford Shale resource play in Canadian County, Okla.

The Cana No. 1-15H discovery well was drilled to a true vertical depth of 13,177 ft and horizontally for 4,090 ft, for a total measured well depth of 17,267 ft. The well flowed at an initial rate of 5.2 million cu ft/day of gas.
“Marathon is encouraged by the results of the Brickyard prospect as we continue to develop the emerging Woodford Shale resource play,” said Annell R Bay, senior vice president, worldwide exploration. “We are using 3-D seismic technology to better define our targets and applying advanced drilling technology to reduce drilling days and well costs, thereby improving overall well economics.”

Marathon holds approximately 30,000 net acres in the expanding Woodford Shale resource play, with approximately 10,000 of those net acres in the immediate Brickyard prospect area. The company is drilling two additional wells and participating in two non-operated wells in the Brickyard prospect. Marathon also plans to participate in 15-25 gross wells in this area through 2010. This limited program is designed to enhance the company’s technical understanding of the play and reflects its focus on capital discipline. Marathon expects that with the successful development of this program, the play could yield an additional 200-300 gross locations.

The Cana well is believed to be the world’s first totally interventionless well completion using the EXcape Completion Process technology, developed jointly by Marathon, BJ Services, GEODynamics and the Expro Group. Using this technology, Marathon was able to remotely perforate, fracture stimulate and complete each individual interval zone for production, including the setting and removal of isolation devices – saving time and expense. Based on the success of the Cana well completion, Marathon plans to expand the use of this technology to future activities in Oklahoma’s Woodford Shale and Alaska’s Cook Inlet operations.

“Compared to conventional completions using pump-down techniques in horizontal wells, the EXcape technology reduced manhours on this well completion by more than 35% and reduced completion costs by 10%,” Ms Bay said.

INTEQ offers new high-speed telemetry service

Baker Hughes INTEQ has introduced its new aXcelerate High-Speed Telemetry service, offering high-speed mud-pulse and wired-pipe data transmission for logging while drilling (LWD) and measurement while drilling (MWD) applications.

“We believe that our aXcelerate service will be a game-changer in the way operators drill their wells,” said INTEQ president Paul Butero. “As part of our Answers While Drilling suite of advanced drilling and formation evaluation technologies and services, the aXcelerate service enables real-time transmission of high-speed, high-resolution data from all of INTEQ’s downhole services.”

The aXcelerate service provides the fastest mud-pulse telemetry available today, with data rates of 20 bits/sec having already been consistently achieved. This data rate is more than 500% faster than the industry standard 3 bits/sec.

The aXcelerate service also enables wired-pipe telemetry connectivity in conjunction with the IntelliServ Network. INTEQ has worked closely with the IntelliServ Network and provided downhole services in the majority of all wired-pipe work that has been done to date.

The aXcelerate service is already being used by major operators in areas including the North Sea, Gulf of Mexico, offshore Brazil, and the Middle East.

KCA DEUTAG’s crews on rig T201 working in Brunei have received recognition from Shell as Land Rig of the Year in its worldwide fleet for 2008.

“We have shown that an inherently risky operation can be conducted in a safe manner while still pushing ourselves for consistent top-quartile performance – the best of both worlds,” said Francisco Chacin, T201 rig superintendent for Brunei Shell Petroleum. “Congratulations to all hands on the rig, without exception. This is really something to be proud of.”

Separately, KCA DEUTAG has been awarded a US$50 million land drilling contract from Russian oil and gas operator Arctic Gas Co. The contract, which is for an initial three years with extensions, saw KCA DEUTAG’s rig T505 commence operations in the fourth quarter 2008 in the Severo-Samburgskoye field, in Novy Urengoy, Western Siberia.

Holger Temmen, chief executive of KCA DEUTAG, said, “Russia is a key strategic growth area for our business, and this contract further strengthens our position in that market, where our HR-5000 series of rigs have continued to make in-roads since their introduction in 2006.”

This contract follows another awarded previously, by Burgaz, Gazprom’s drilling subsidiary, for KCA DEUTAG’s rig T500 for a drilling campaign in the Novyi Urengoi field in the Yamburg region of west Siberia.

Anadarko: Well flows nearly 17,000 bbl of crude in drillstem test in deepwater field offshore Ghana.

Anadarko has announced a successful drillstem test (DST) at the Hyedua-2 appraisal well in the deepwater Jubilee field offshore Ghana. The well, located in approximately 4,090 ft of water on the Deepwater Tano License, flowed at a stable rate of 16,750 bbl of 37° API gravity crude oil and approximately 21 million cu ft/day of associated natural gas from a single zone. The flow rate, which was limited by equipment and facilities, indicates future deliverability of more than 20,000 bbl/day.

“Flowing nearly 17,000 barrels of high-quality crude oil per day from a test well is an outstanding success indicative of the world-class potential of this basin,” Anadarko chairman and CEO Jim Hackett said. “The high flow rates and relatively low pressure drawdown of this well demonstrate excellent productivity, and the data confirms we are connected to a large reservoir.”

Hyedua-2 follows the successful Mahogany-3 well on the West Cape Three Points Block. That well encountered high-quality oil pay, confirming the Jubilee field’s potential and expanding the extent of the field by more than three miles to the southeast of the original Mahogany-1 discovery well. It also opened new potential on the block as it encountered oil pay in the secondary exploration objective. This deeper section targeted a previously untested and separate fan at a lower stratigraphic interval.

Once Mahogany-3 operations are complete, the partnership expects to begin drilling the Tweneboa-1 prospect, located on the Deepwater Tano License. The partnership also expects to continue its offshore Ghana E&P program, which includes two additional high-impact exploration wells in the Cretaceous trend at the Teak and Onyina prospects.

ENI gets 6 exploration licenses in Gabon

Eni has acquired six new exploration licenses in Gabon, with an overall surface area of over 8,000 sq km. Two licences, D3 and D4, are in the prolific north Gabonese basin, and the other four (E2, F3, F4 and F7) are in the onshore basin. All licenses have a first explorative phase of four years, renewable for two periods of four and three years respectively. The agreement with the Gabonese government represents an application of the “ENI cooperation model” in the West Africa region, integrating sustainable activity in the territory with hydrocarbon exploration and production.

Crosco rig achieves 1,000 days without LTI

Crosco Integrated Drilling & Well Services has received an outstanding safety performance award from Woodside Energy North Africa. It recognized Crosco Drilling Rig 603 for achieving 1,000 days of operations without a lost-time incident. The milestone was achieved on 30 September 2008 during an ongoing drilling services project in Libya. “Our objective at Crosco is to always operate without incidents,” said Bojan Milkovic, Crosco president and CEO. “We are particularly pleased with the Woodside award since it shows that we are achieving our desired HSE&Q results.”

DONG Energy to explore in Barents Sea

The Norwegian Oil & Energy Ministry has awarded DONG Energy a licence to search for oil and gas in an approximately 600-sq-km block in the Barents Sea, off the coast of Hammerfest in northern Norway. This means that DONG Energy now has six Norwegian licences.

Under the terms of the latest licence, PL518, a 3D-seismic survey will be performed and at least one appraisal well drilled within four years. If the results are positive, a development plan will be made.

Anders Mørland, the director responsible for DONG Energy’s Norwegian E&P activities said: “We are proud of this latest licence. The Barents Sea is known as a region that is not for novices but for companies with proven experience and expertise within exploration activities. Geographically, the concession is favourably located – only 30 km from the Goliath find that ENI and Statoil plans to produce from, and a little northwest of the area is the large Snøhvit gas field, from which the gas is piped to land via a pipeline that runs close to our concession.”

DONG Energy has already started planning for the exploration and hopes to complete seismic investigations as early as summer 2009.

Tullow Oil announces significant discovery in Giraffe-1 exploration well in Uganda

Tullow Oil announced that the Giraffe-1 exploration well, located in the Butiaba region of Uganda Block 1, has encountered over 38 m of net oil pay within an 89-m gross oil-bearing interval. These results demonstrate Giraffe to be a down-dip extension of the Buffalo discovery, making this the largest discovery in the Lake Albert Rift Basin to date.

The well was drilled 5 km from Buffalo-1 to a total depth of 705 m and has been successfully logged and sampled. The data indicate a net reservoir thickness of 38 m, the largest encountered in the area to date, and excellent reservoir quality in all pay zones with movable oil being recovered to surface.

Interpretation of the well and seismic data indicates that the reservoir sands intersected in the Giraffe-1 well are in communication with those in the Buffalo discovery. An oil-water contact was penetrated and is interpreted as being common to the entire Buffalo-Giraffe structure, with the potential for a single continuous oil column of some 140 m.

Giraffe-1 is the sixth successful test of the Victoria Nile delta play fairway within the Lake Albert Rift Basin and was drilled some 6.5 km south of the crest of the Buffalo-Giraffe structure. This latest result further extends the play fairway and de-risks several adjacent prospects, in Blocks 1 and 2, which are scheduled for drilling in 2009.

The well will now be suspended as a future producer and, on completion of operations, the rig will move to the Tullow-operated Block 2. Drilling operations will recommence in early February with the drilling of the Mputa-5 appraisal well to calibrate recently enhanced seismic data. Thereafter the rig will return to the Block 2 Butiaba campaign.

StatoilHydro starts production from subsea field

The Yttergryta subsea field has started gas production for the Åsgard field in the Norwegian Sea, eight months after the plan for development and operation was approved. The field has been developed from find to production in about 18 months, and the first part of the subsea production facility was already in place before exploration drilling was started. The company “will start production as soon as possible to help maintain the production flow from the Åsgard field,” according to StatoilHydro.

Virtue I jackup completed for India’s Jindal Drilling

Keppel FELS has completed the jackup Virtue I ahead of schedule for Virtue Drilling, an associate company of India’s Jindal Drilling & Industries. This was accomplished with a record of about 2.1 million manhours worked without incidents.

Virtue I is the second jackup Keppel FELS has completed for Jindal. It has been contracted by ONGC of India for work in the Indian Ocean for five years. The first rig, Discovery I, was delivered in September 2008, 49 days ahead of schedule and without incidents.

Virtue I is capable of operating in water depths of 350 ft and drilling down to 30,000 ft. Keppel’s fully automated high-capacity rack and pinion elevating system and self-positioning fixation system have been incorporated into the design. Over the last five years, Indian drilling contractors have ordered nine KFELS B Class jackup rigs.

Deepwater semi Maersk Developer completed

The Maersk Developer was delivered to Maersk Drilling on 2 January. It is the first in a series of three highly advanced deepwater development semisubmersibles the company has under construction in Singapore. Its initial programme is for Statoil Gulf of Mexico for drilling in the US Gulf of Mexico, with further assignment rights to Woodside Energy. The contract has a duration of four years.

The IADC Career Connection (ICC) program will return to Fort Hood on 4 February with a new Returning Military Campaign (RMC) job fair. Twelve IADC member companies are signed up for the event, which again is held in cooperation with ACAP (Army Career Alumni Program). More than 2,000 soldiers are expected to attend, as are more than 170 companies from outside the drilling industry.

IADC launched RMC in late 2007 exclusively for drilling contractor companies. Job fairs were held at Fort Hood in Texas and Fort Carson in Colorado, both proving successful in recruiting military personnel for drilling industry jobs around the world. Due to significant interest from non-drilling contractor members, IADC president Dr Lee Hunt opened the RMC program to all member companies in late 2008.

The 12 companies participating in the 4 February event are: ENSCO International, Chesapeake Energy, DCL Mooring and Rigging, Grey Wolf Drilling, Impact Selector, Muehlhan Offshore, MD Cowan, Patterson UTI, Secure Drilling, TH Hill Associates, Transocean and Viking Drilling.
IADC is working with ACAP to plan possible job fairs at Fort Bragg and Marine Corps Base – Camp Lejeune, both in North Carolina, in 2009. Details are available at http://careers.iadc.org.

IADC UBO guidelines accepted as API RP92U

Guidelines on underbalanced operations developed by the IADC Underbalanced Operations & Managed Pressure Drilling Committee have been formally adopted as API Recommended Practice 92U (“Underbalanced Operations, First Edition”).

The effort was led by John Ramalho, Shell, who chairs the UBO & MPD Committee’s Standards & Nomenclature Subcommittee. Gavin Humphreys, Stena Drilling, chairs the full IADC UBO & MPD Committee.

“API RP 92U is the culminating piece of the committee’s work that started with the GAP analysis of standards that could have a positive impact on the safety of UBD operations worldwide,” Mr Ramalho explained. The work on RP 92U began in early 2005.

At the time, a manufacturing standard for rotating control devices and non-return valves was needed, and guidelines were required to standardize practices and equipment deployed in UBD operations globally, he added. The committee recognised that before deploying equipment in an appropriate application, there must be assurance that such equipment can be safely deployed.

“We also recognised that standards issued by a recognised body was critical,” Mr Ramalho said. “Hence, we were quite pleased when the API agreed to recognise our UBO Standards Subcommittee as an API Task Group and to adopt and publish our work.” In 2004 and 2005, the committee’s work on manufacturing standards were adopted and published as API Spec 16RCD and API Spec 7NRV.

“RP 92U will provide both experienced and non-experienced operators and service companies a consistent approach to planning and executing underbalanced drilling operations, irrespective of geographical location, environment or operational complexity,” Mr Ramalho said. This will ensure personnel safety, public safety, integrity of the underbalanced drilling equipment, and preservation of the environment for land and offshore underbalanced drilling operations.

IADC Denver Chapter is now Rocky Mountain Chapter

In an effort to increase participation from individuals and companies operating in the Rockies Region, the IADC Denver Chapter has officially changed its name to the IADC Rocky Mountain Chapter.

“The name change better reflects current chapter members and clearly welcomes participation from individuals operating in the Rockies,” said Jason McFarland, IADC vice president – membership and publications.

Manufacturers’ input sought for training catalog

IADC, under the auspices of its Advanced Rig Technology Guidelines Subcommittee, is developing a comprehensive catalog of training available through manufacturers of automated or mechanized rig equipment.

“Training availability is a key concern of many end users of automated and mechanized rig equipment, and our committee committed to answer this need by developing a comprehensive list of training courses available through equipment manufacturers,” explained Mike Killalea, IADC group vice president/publisher. “Our goal is to produce a balanced, unbiased catalog that operators and contractors can use as a handy reference to training availability.

“Consequently, we strongly encourage all equipment manufacturers to help us obtain accurate information.”

The catalog will contain course offerings, he added. It will include details such as course schedules.

Bill Schaer of National Oilwell Varco will collect the information for this project, under the leadership of subcommittee vice chairman Logan Puckett, Pride International.

IADC recently participated in a workshop in Annapolis, Md., to set the framework for recommendations to the Obama Administration on ocean resource policies. The event was opened by former US Department of Energy Secretary Admiral James Watkins. He chaired the US Commission on Ocean Policy, which was designated to deliver a report on the state of US marine health and resources and to recommend policies to improve the regulatory framework for managing those resources. The offshore E&P industry was represented on that panel by Paul Kelly of Rowan Companies and Larry Dickerson of Diamond Offshore. With the Obama Administration moving in, conference co-sponsor Joint Ocean Commission Initiative (JOCI) is now seeking to promote legislative and executive branch fulfillment of their common recommendations, as indicated by the workshop’s title, “Setting Ocean Priorities for the New Administration and Congress.”

IADC senior vice president – government affairs Brian Petty argued against recommending restoration of OCS moratoria, which expired or was lifted by executive order in 2008. Despite an overwhelming presence of environmental groups at the workshop, it concluded with no mention of the moratoria issue in its final summary. Next steps will involve development of recommendations to be presented at a press conference in Washington in March.

Progress in EU Working Time Directive

The European Parliament in December voted in plenary on the second reading of the proposed new EU Working Time Directive. Much media attention has focused on the intra-community wrangle over the UK “opt out,” but at this stage of a very long process, the offshore E&P industry is generally prevailing in its arguments. Most importantly, Parliament agreed to afford Member States flexibility in establishing reference periods, even up to 12 months. This is critical to managing offshore rotas. Next steps involve taking the proposed Directive to a “conciliatory committee” to attempt to resolve differences between the Parliament and the European Council’s draft, which is more favorable to the offshore industry.

Employment authorization process

Alan Spackman, IADC vice president, offshore technical & regulatory affairs, is a member of a subcommittee of the National Offshore Safety Advisory Committee (NOSAC) that will examine the process by which the US Coast Guard authorizes foreigners to work on the US OCS. At the 13 November 2008 NOSAC meeting, the Coast Guard asked the committee to provide advice to streamline its policies and procedures for determining when, in accordance with existing law and regulations, foreign workers may be authorized employment on the OCS. Current practices are generally viewed as too cumbersome by all involved. The subcommittee will be headed by Bill Hedrick of Rowan Companies and will include representatives of OCS leaseholders, shipyards, vessel operators and others with interest in the determination process, and is expected to begin its work in January.