Sara Shayegi, Hess Corp, is co-chairwoman of the MPD Subcommittee of the IADC UBO & MPD Committee.

There are two kinds of people in the world – those who want to know why and how something works, and those who don’t care “why” or “how” as long as it works. Sara Shayegi, EPT technical adviser for Hess Corp, falls squarely into the first category.

After getting a petroleum engineering degree from Louisiana State University (LSU) in 1988, Ms Shayegi decided that she hadn’t fulfilled her curiosity about the why’s and how’s of the petroleum world. She wanted to know, for example, exactly why things work the way they do in the reservoir and how pressure and temperature and fluids work on the most basic level. So she spent a few more years in school, first completing a study program at the Institut Francais de Petrole, then finishing a research fellowship on enhanced oil recovery at LSU.

Over the course of her doctorate, Ms Shayegi became interested in finding ways that could optimize hydrocarbon recovery from the first instance of reservoir contact. When she heard about a JIP that was under way at Cenpes, the Petrobras Research Center, on underbalanced drilling, this piqued her curiosity. “I was able to get the name of the person who was heading the JIP and asked if I could come and work for three months,” she said.

After three months, Petrobras hired her to continue working on the JIP at Cenpes. It was here that Ms Shayegi started researching multiphase flow, hydraulic models, and steady-state and transient modeling and gaining experience with managed pressure drilling (MPD) and underbalanced drilling (UBD).

The JIP eventually resulted in Petrobras being able to test testing a gasified fluid for a short interval from the P-17 semi platform, on well Albacora 64H offshore Brazil in December 2000. However, by that time, Ms Shayegi had already moved on to Impact Engineering Solutions, which later developed the Secure Drilling MPD system.

Due to her background in reservoir and underbalanced drilling, Ms Shayegi started working for Halliburton on their Real-Time Reservoir Evaluation system, which allows reservoir characterization of the formation while drilling. This work evolved to include development of analytical and numerical reservoir models, neural nets for prediction of missing data, lag time synchronization and field implementation. Not withstanding the benefits of UBD, there are implementation and cost challenges that must be overcome. Near-balanced drilling, or MPD, addresses some of the problems previously addressed by UBD, with less complexity and cost; Ms Shayegi worked with the development team to address this area prior to leaving Halliburton.

In September 2009, she was offered her current position as part of Hess’ E&P technology group, which was tasked with implementing new technologies in the company’s worldwide assets. A significant portion of this job is conducting engineering and feasibility studies for MPD/UBD.

With underbalanced drilling, Hess has begun using the technique as a way to characterize the horizontal section of the well. “In a conventional well test, there are a lot of assumptions you make when you do the analysis. (With UBD), you know where the production is coming from, so you can get the productive length that is a known, along with other formation properties,” she said.

Ms Shayegi believes that one sticky issue may have to be resolved before UBD will become widely accepted, and that is cost – not how much but where to fit it the overall budget. “I think the value is primarily for the assets and reservoir folks in terms of production uplifts and reservoir characterization. There has to be a sharing of the cost of implementation. Right now it’s on the drilling AFE. The real place it needs to reside is a combination of the drilling AFE and assets so that (UBD) makes sense economically.”

Whereas UBD is not a “slam-dunk” technology because of its complexity and cost, she said, MPD is definitely the wave of the future. “It’s not a big step from conventional drilling,” yet it can provide significant advantages as far as being able to react faster to potential drilling problems, she said.

Some issues still need to be addressed, however. One is equipment reliability. “RCDs (rotating control devices) are working fine on land, but for offshore I think there needs to be more work done on reliability, especially for floater operations,” she said. She sees innovation in this area as a component in a system for improved safety in deepwater drilling.

Training is another critical challenge. “When you do managed pressure drilling, the crews need to have a certain level of understanding of drilling concepts, and that’s going to take a bit of time. I also think that’s part of the role of IADC, in terms of defining what training is required, what simulations they need to do or what kind of WellCAP (certification) they need.”

For the longer-term future, Ms Shayegi believes that the drilling and reservoir segments must work together to increase recovery rates. “I’d like to see the implementation of a combination of enhanced oil recovery techniques with optimized drilling methods that would maximize the final recovery from wells. The ideal solution would allow this to be done with minimal environmental impact.”

PetroChina recently awarded Baker Hughes a contract to supply 77 multistage, open-hole fracture completion systems for horizontal wells in the tight-gas sands of the Changquing Field. The company was awarded a one-year contract based on the successful deployment of its Frac-Point technology in the Sulige gas field last year.

Characterized by low permeability, low pressure and low yields, reserve recovery from Changquing is technically complex – requiring innovations like multistage fracture completions to overcome geological challenges. Baker Hughes will implement the Frac-Point systems for three-quarters of the 102-well horizontal drilling program.

The Frac-Point system uses specially designed short-radius, open-hole packers and frac sleeves to isolate intervals of a horizontal section and pinpoint fracture treatment placement. The one-trip system allows the fracture treatments for each section to be pumped on the same day, which eliminates the expense of mobilizing and demobilizing pumping equipment.

Statoil launches technology plan to reduce carbon emissions from oil sands

Statoil has initiated a new technology plan to help reduce carbon emissions from oil sands. The goal is to reduce emissions by more than 40% by 2025.

The initial five-year phase will be the start-up and operation of a demonstration pilot facility. The plan will provide the basis for initial reductions of up to 25%, with further reductions of more than 40% by 2025.

The first phase of the oil sands project, the Leismer Demonstration Project, is on schedule and will start up later this year.

George Mitchell receives lifetime achievement award

Houston oilman George P Mitchell was awarded a lifetime achievement award from the Gas Technology Institute on 16 June at the “Global Unconventional Gas 2010: Unlocking Your Potential” conference in Amsterdam.

He received the honor for pioneering hydraulic fracturing and drilling technologies that created a shale gas revolution. “It is my hope that my efforts will aid the search for new and unconventional energy that can be used by my grandchildren and great-grandchildren,” Mr Mitchell said. He holds a petroleum engineering degree from Texas A&M University and is founder of the Mitchell Energy & Development Corp.

KCA DEUTAG names head of business development for RDS

KCA DEUTAG’s engineering division, RDS, has announced Rodrigo Rendon as head of business development – engineering & major projects. Mr Rendon has over 15 years of experience in the oil and gas industry. He started his career as a field engineer for Schlumberger and continued thereafter performing lead technical and operations postings.  At RDS, he will be responsible for identifying and pursuing projects with drilling engineering and operations content.

Cudd picks executive VP to run international operations

Cudd Energy Services has appointed executive vice president Robert Talk to lead its international operations. He will also continue to oversee Cudd’s well control, engineering, consulting, well control training and tubular inspections divisions.

STEP Offshore to offer drilling fluid management solutions

Derrick Equipment Company has given STEP Offshore sole rights to sell Derrick’s solids control equipment and products in Europe, including capital equipment, shale shakers, etc, which will enable STEP Offshore to offer drilling fluid management solutions.

Petrofac offers well control training in Azerbaijan

Petrofac Training Services has launched IADC-approved well control training in Azerbaijan; it is the only commercial well control training facility in that country.

This introduction of well control training in Baku ensures accessibility by local drilling and well control companies in Russia and the Commonwealth of Independent States (CIS).

The company’s approach enables delivery of training in English, Russian or Azerbaijani and can provide training at other locations depending on customers’ certification requirements.

For more information, visit www.petrofactraining.com.

Nautronix appoints Eads non-exec board member

Nautronix Group has appointed Rodney Eads as a non-executive board member. Mr Eads has 35 years of experience in the upstream energy business and is the first senior industry player to join the new Nautronix Board following the acquisition of Nautronix by SCF Partners on 8 April.

BJ Services gears up in Marcellus Shale fields

BJ Services is expanding its tubing and casing-running operations in the Marcellus Shale fields of Pennsylvania, West Virginia and New York.

Increased demand for casing and tubing running services in the region led to the opening of new bases to support tubular services operations, the company said.

The company launched its Marcellus Shale expansion program in West Virginia in August 2008.

PRODUCTS

Weatherford releases compact cross-dipole sonic tool

Weatherford International has launched its compact cross-dipole sonic (CXD) tool designed to deliver data that are used in seismic velocity models. It is the industry’s only 2.25-in. monopole/cross-dipole sonic tool that can be deployed with or without wireline to acquire compressional, shear-slowness and fast-shear azimuth. The profile and memory capability of the CXD provides the ability to acquire high-quality acoustic data in vertical to highly deviated wells with challenging hole conditions using the company’s Assure conveyance options. These conveyance options allow the CXD to be deployed via various methods including wireline, slickline, coiled tubing, thru-drill pipe, drop-off and well shuttle.

GE launches horizontal tree, integral control system

GE Oil & Gas launched the new Vetco-Gray DHXT deepwater horizontal tree and integral control system at the 2010 Offshore Technology Conference on 3-6 May in Houston, Texas.

The DHXT is designed to operate in water depths up to 10,000 ft and at pressures up to 15,000 psi. The streamlined design reduces the standard industry horizontal tree footprint by 12% and weight by 10%, delivering significant installation, maintenance and cost benefits for operators. The D-Series includes the VetcoGray ModPod, a subsea control module that is powered by SemStar5.

AmKin Technologies introduces directional coiled-tubing tool

AmKin Technologies has unveiled its Coiled Tubing Front Orienting Tool Assembly for directional drilling with coiled tubing. The tool features a near-bit fixed bend located below a positive displacement power section. The orientation of the bend is controlled from surface and can be adjusted while drilling ahead, which allows for continuous operations while drilling vertical, curved or tangent sections with coiled tubing.

Schlumberger providing VSAT SeaConnect service

Schlumberger has launched its SeaConnect VSAT service for the offshore industry. It is a high-performance, dedicated and secure VSAT offering based on a fixed-fee, unlimited data access. Schlumberger has trialed the SeaConnect service for the last six months on a number of vessels operating in Southeast Asia.

SureTec provides fast, accurate leak detection

Innovative Pressure Testing has introduced SureTec, which provides leak analysis for the low- and high-pressure portions of a pressure test using thermally compensated leak detection technology. With the high-pressure analysis, a leak can be identified within two minutes. The technology can reduce rig downtime and increase system verification accuracy, and the entire testing sequence can be automated.

Cudd Energy Services receives patent for Rack Jack system

Cudd Energy Services has been awarded a patent for its Rack Jack system, an alternative to traditional derrick-based workover/drilling systems, both onshore and on platform and jackup rigs. It provides a hydraulic workover unit the ability to vertically rack multiple stands  (dual joints) of pipe in an integrated setback area of the work basket. Yielding trip speeds up to 1,500 ft/hr, the racking capability reduces trip time and increases efficiency.

The unit’s small footprint takes up less deck space than a traditional workover rig. When coupled with the Cudd skidding system, it can yield faster and farther inter-platform well changes, reduced well loading, higher wind tolerances and reduced dependence on the platform crane.

The Rack Jack is part of Cudd’s continuing effort to expand its CES Hydraulic Workover service line.

Atlas Copco automatic pipe loader designed for RD20

Atlas Copco has created an automatic pipe loader (APL) system for its RD20 mobile rotary drilling rig. The system can be used with a standard RD20 pipe, as well as other types of oilfield or external upset pipe ranging from 3 ½-in. OD to 13 ³/8-in. OD. APL features its own hydraulic power unit that operates at a maximum capacity of 64 gal/min at 3,000 psi.

Thern makes compact stabbing board winch

Thern is offering a stabbing board winch with a small footprint that allows crews to mount the winch on a stabbing board, while the design provides for floor, ceiling or vertical mounting to minimize the amount of workspace occupied. Standard available winch options include various power and motor options, control packages, and pre-wound wire rope assemblies.

Hardbanding alloy reduces wear on casing, risers

Scoperta and Rankin Industries have developed a compact integrated microstructure (CIM-7) hardbanding alloy. It has a fine-grained microstructure composed of a tough, ductile matrix integrated with compact nano-scale particles that help to reduce wear in casing and marine risers and protect tool joints. It can prevent spalling, part wear and friction.

Brian “Bru” Brurud conducts the training mentoring stage of the Check 6 “Performance Excellence” Rig Training Program aboard Transocean’s Development Driller I rig.

Our industry has come a long way in developing safe and efficient training.  However, Brian “Bru” Brurud developed a new spin on the subject with his company Check 6. Using his 24 years of experience as a Naval aviator and commercial airline pilot, the company applies the best practices from those environments and applies them to the drilling industry.

Mr Brurud began his career as a geologist for Schlumberger in 1984, working with the first generation of LWD tools in the Gulf of Mexico and on the North Slope of Alaska. When the ’80s downturn started, he left the oil industry and was accepted into the Navy pilot training program. Mr Brurud eventually found himself instructing at the Naval Strike and Air Warfare Center, where he is credited with standardizing and streamlining training programs like TOPGUN and Airwing.

In 2005, Mr Brurud was approached by BHP Billiton drilling engineer Gordon Tschritter, who had read a white paper from the University of Aberdeen on the objectives of safety and efficiency in the oil industry. The paper essentially suggested that the industry take note of commercial aviation, aircraft carrier and space programs to obtain its objectives and use fighter pilots and astronauts as instructors.

After Mr Tschritter observed issues in consistency and efficiency on his rigs, he asked Mr Brurud to modify the TOPGUN and Airwing Training programs to create a rig training program with the same objectives of performance and safety. So he did. “The rig training program that evolved is one that improves leadership, standardization and discipline under an umbrella of simplicity,” Mr Brurud said.

How exactly is aviation training similar to training offshore drilling teams? According to Mr Brurud, both operate in high-risk environments that encompass a variety of people, objectives and equipment that make standardizing processes crucial.

PEOPLE

There is a diverse demographic on both aircraft carriers and drilling rigs. There is a diversity of culture, dialect, gender, ethnicity and educational circumstance. The only difference is in scale. An aircraft carrier has 5,000 people with an average age of 21 and a turnover rate of around 70% every 18-24 months.

In both environments, “all of the people have to operate in this very hazardous place without hurting people or breaking things because you have very limited resources to draw on,” Mr Brurud said.

Reducing the likelihood of losing drilling momentum on a rig that has a high dayrate means perfecting and standardizing plans, policies and procedures.

Mr Brurud gives a briefing on stress and fatigue during a training introduction for Nabors Drilling.

OBJECTIVE

In a high-risk operation, the best kind of operation is a predictable one, Mr Brurud said. Taking deliberate actions to ensure results is part of what the Check 6 program teaches. Rigs develop a debrief culture so that, after every activity, crews look at what the objective was and what worked and what didn’t. “The cultures that we change and behaviors that are affected by it results in more deliberate actions that are planned out and briefed accordingly during the execution phase.”

A problem he sees often when first visiting an offshore rig is the lack of standardized plans among crews. “My definition of a plan may be different than someone else’s definition of a plan, and if you want to operate in the realm of high reliability, where everything has a predictable outcome, then you can have no assumptions at all,” he said.

Check 6 uses the operator’s standards of safety when training employees on the rig. If those are not laid out, the company can help to standardize policies and procedures before proceeding with training.

EQUIPMENT

There are even similarities between aircraft carriers and offshore drilling equipment. “Aside from an aircraft carrier smelling just like an offshore drilling rig, the first time I landed on an aircraft carrier and set foot on the flight deck, I saw many familiar things,” Mr Brurud said.

In an aircraft carrier, the hydraulic arresting gear cables resemble the drill line on a rig. The resting gear motors, which absorb all the energy when an aircraft lands with a tail hook, is dissipated through a hydraulic accumulator that looks exactly like the motion compensators on offshore rigs.

Even the magnetometers and accelerometers in downhole directional tools are the same as the ones in missiles, he said.

TECHNOLOGY

There are differences between the two industries as well. “As military and commercial aviation has learned over 40 years ago, technology alone can only go so far in eliminating risk,” Mr Brurud said. “Then it comes down to the training of humans in knowledge, leadership skills, procedures and process in order to operate in a high-reliability fashion.”

Mr Brurud believes that advances in technology in military operations surpass what drilling rigs are currently using. The drilling industry is beginning to adopt technology like joysticks, touch screens and other complex computer interfaces to keep data and communication lines open, but it is still a few years behind the military in technology innovation, he said.

To help the industry along in this area, Mr Brurud’s company has developed a Rig Training and Learning Management System (RTMS). This system uses virtual simulation, 3-D technology, embedded in a learning management system for crane, driller, assistant driller and ballast control. This technology is being used to teach the next generation of fighter pilots. The simulator is about getting a chance to rehearse before being put into a high-risk position on the rig.

One of the main reasons for developing this program was that he observed the industry’s simulation software and training facilities, which fell short of because they are inconvenient for offshore employees to get to and have a really big environmental footprint to run, Mr Brurud said. His company’s portable laptop simulator can take on almost any rig task, from simulating interactions between the crane operator and driller as they run casing to emergency disconnects with a driller.

Mr Brurud and his team of fighter pilots, Navy SEALS and an astronaut do not profess to be experts in drilling. They have simply found ways to implement their experiences to provide rig crews with innovative ways to standardize practices and increase efficiency and safety.

“We are experts in planning, briefing those plans, looking at operations that are taking place and making sure that there are crosschecks and mutual support,” he said. “But mainly, we are experts in maintaining a debrief culture so that continuous improvement can take place.”

ExxonMobil has drilled a well offshore California that extends more than six miles horizontally and more than 7,000 ft below sea level. It was drilled from the Heritage platform using the company’s Fast Drill technology.

ExxonMobil completes world’s longest ERD well from fixed platform offshore California

ExxonMobil has completed the world’s longest extended-reach well drilled from an existing offshore fixed platform drilling rig, increasing the company’s ability to produce oil from existing facilities at the Santa Ynez unit, offshore southern California. The well, drilled from the Heritage platform using ExxonMobil’s Fast Drill technology, extends more than six miles horizontally and more than 7,000 ft below sea level.

Through the use of the extended-reach technology, the well will be able to produce an additional 5.8 million bbl of oil equivalent. “These new tools and lessons learned from our recent work off Russia’s Sakhalin Island have been key in helping us reach these resources safely and efficiently,” said Kok-Yew See, US production manager.

The Hondo, Harmony and Heritage platforms comprise the Santa Ynez Unit and produce oil and gas from the Hondo, Pescado and Sacate fields. Since 1981, the Santa Ynez Unit has produced more than 450 million bbl of oil.

ExxonMobil’s extended-reach drilling technology has allowed oil production in the western Sacate field from the existing offshore Heritage platform since 2007. The company is also applying its Fast Drill technology to achieve improvements in drilling rates of up to 80%.

Reaming system allows open-hole liner placement

Aberdeen-based Deep Casing Tools has successfully run its new well reaming system, Turborunner, in the central North Sea, UK, for PetroCanada. The operator selected the system for a horizontal application in the Saxon development well 21/23b-S2. A 3,000-ft pre-drilled liner was placed from a semisubmersible. The tool is designed to enable open-hole completion placement operations. It combines optimized washing with a rotational reaming capability without the need to rotate the completion string. It has a low operating pressure, allowing integration with most completion systems.

Large microseismic hydraulic fracturing monitoring surveys finished in Canada

Baker Hughes and VSFusion, a borehole seismic processing joint venture between Baker Hughes and CGGVeritas, recently completed one of the largest microseismic hydraulic fracture monitoring surveys ever undertaken. The survey for Apache Canada in the Horn River Basin of northwest Canada deployed Baker Hughes’ geophone strings simultaneously in two observation wells for over 30 days. Microseismic events were recorded for hydraulic stimulations in 13 wellbores adjacent to the observation wells. In all, over 75 separate hydraulic stimulations were recorded.

The project used a variety of deployment geometries in both the horizontal and near-vertical sections of the observation wells to optimize hydraulic fracture imaging in the reservoir. Operations were conducted 24 hrs/day, and VSFusion provided real-time display of recorded microseismic events, both on the well site and in Apache’s offices in Calgary and Houston. Monitoring and analysis of microseismic information during operations allows optimization of the hydraulic stimulation process by modifying the fracture stage design while pumping into the formation.

Apache used the data to experiment with how different perforation patterns impacted fracture propagation, then made real-time changes in the fracture program. At one point, data showed an absence of growing microseismic activity, alerting Apache to switch from pumping proppant to flushing the well with water to avoid a potentially costly sanding-off of the fractures.

Recording microseismic events to monitor rock fracturing in 3-D space and time during the stimulation process confirms the rock volume and formation geometry being stimulated. This can optimize future well placement and completion designs.

Halliburton’s GeoTap IDS fluid identification and sampling sensor was a winner of the 2010 OTC Spotlight on Technology award.

Sampling-while-drilling sensor tested offshore Norway for BG Norge

Halliburton recently completed field tests for the GeoTap IDS fluid identification and sampling sensor for BG Norge. The test was performed on the Bredford Dolphin drilling rig for the 34/5-1 S Blåbær exploration well offshore Norway. Application of the technology saved rig costs and reduced the requirement for post-well wireline sampling.

Using the new sensor, reservoir formation fluids can be sampled during short stops in the drilling process with a tool placed in the logging-while-drilling (LWD) assembly. This makes the technology ideal for high-cost drilling environments. The sensor also allows operators to acquire multiple fluid samples within just hours of drilling the formation instead of days, reducing the likelihood of borehole damage and producing a less contaminated sample.

By allowing several samples to be collected through a productive hydrocarbon zone during pauses in the drilling operation, the tool improves operators’ ability to quickly characterize fluid variability, often an indicator of reservoir compartmentalization. The tool also has the potential to optimize wellbore placement and achieve maximum production over the life of the reservoir.

Linear biopolymer used as alternative to xanthan gum viscosifiers in Alaskan well

M-I SWACO’s POWERVIS linear biopolymer, the new viscosifier used in FLOPRO reservoir drill-in fluid systems, enabled an operator in Alaska to drill a high-angle, extended-reach, slim-hole, coiled-tubing drilling (CTD) sidetrack while minimizing pressure loss and elevating low shear-rate viscosities. The biopolymer exhibited 10% to 22% lower operating system pressure loss and, compared with a xanthan gum biopolymer, it reduced ECD by 0.8 lb/gal EMW, said M-I SWACO project engineer Rick Morris.

Previous long-reach wells in the area experienced high ECD and system pressure losses of up to 4,000 psi. The FLOPRO SF reservoir drill-in fluid with a xanthan gum biopolymer had been used as the system viscosifier in previous sections, but, due to the nature of this section, the POWERVIS linear biopolymer was selected.

The initial comparative free-spin pressure loss was 650 psi lower than the xanthan gum system. When the agitator tool was added to drillstring in the remaining 500 ft (152 m) of the lateral section, the initial free-spin pump pressure was 2,800 psi, approximately 700 psi lower than that of the standard FLOPRO SF RDF system viscosified with xanthan gum.

When it is employed, the agitator tool alone will add 500 psi to the overall system pressure loss. POWERVIS is a rheology-modifying agent used to provide viscosity and solids suspension in FLOPRO SF and FLOPRO CT systems. It can be used as a viscosifier in a FLOPRO NT system using fresh water or low-salinity chloride brines.

HPHT suite helps re-entry on Davy Jones well

Baker Hughes has successfully deployed a suite of technologies for high-pressure, high-temperature (HPHT) environments at the McMoRan Exploration Davy Jones ultra-deep gas discovery in 20 ft of water on the shelf in the Gulf of Mexico.

The technology was used to re-enter an existing well, set a whipstock at approximately 17,300 ft and drill to over 29,000 ft MD in the extreme HPHT conditions of the Gulf of Mexico shelf Lower Tertiary formations. Challenges encountered during the operation ranged from executing a reliable sidetrack, improving well stability, designing a robust and reliable drilling system to withstand the extreme pressures and temperatures, and obtaining logging data in this difficult downhole environment.

The wireline logging operation was particularly critical in providing additional reservoir understanding. The Nautilus Ultra suite of logging tools, rated to 30,000 psi and 500°F, were used. This included acoustic pipe-conveyed logging tools for HPHT environments. Logging operations were conducted at 28,134 ft and included acoustic, gamma ray, density and neutron logs. During the drilling and formation evaluation operation, McMoRan experienced no nonproductive time due to whipstock, drill bit, drilling fluids or liner hanger operations conducted by Baker Hughes.

Separately, Baker Hughes has successfully field-tested the industry’s first large-diameter sidewall coring tool offshore Brazil. The MaxCOR rotary sidewall coring tool was developed in response to an operator’s request for 1.5-in. diameter core samples greater than 2 in. in length. During the first test, the client requested 90 cores throughout the reservoir. The tool recovered 94 cores in four runs. In another test, the tool was deployed to successfully complete a 54-core program in two runs.

MaxCOR can recover large-diameter core samples after a well is drilled to cover intervals either not cored with conventional coring operations or where conventional coring operations did not achieve 100% recovery.

Pride Venezuela to drill offshore Brazil

Pride International has been awarded a one-year contract by OGX Petroleo e Gas Participacoes SA for the mid-water semisubmersible Pride Venezuela. The contract, for drilling services offshore Brazil, is expected to commence in Q3 2010. The rig is a conventionally moored unit capable of operating in water depths up to 1,500 ft.

Rowan receives 1st of 4 EXL jackup on time

The Rowan EXL I has a 10-month contract with McMoRan to drill in the Gulf of Mexico.

Keppel AmFELS delivered the first of four EXL rigs to Rowan Drilling Company on 4 May, safely, on time and within budget.

The rig, christened Rowan EXL I at the yard, has a 10-month contract with McMoRan Exploration Company in the Gulf of Mexico.

Keppel AmFELS is constructing three similar newbuild jackups for Rowan. The construction of these rigs is progressing within schedule and budget.

Built as an enhancement of the LeTourneau Super 116E design, the EXL rigs use state-of-the-art technology to drill high-pressure, high-temperature and extended-reach wells. They are capable of operating in up to 350 ft of water and drilling to a depth of 35,000 ft.

Reliance reports 7th oil discovery on Cambay block

Reliance Industries has reported its seventh oil discovery in the CB-ONN-2003/1 (CB 10 A&B) block in the Cambay basin, about 130 km from Ahmedabad in Gujarat. Well CB10A-N1 was drilled to a total depth of 1,579 m in Part A of the block. The  hydrocarbon-bearing zone was identified from 1,388 m to 1,403 m in the Miocene Basal Sand of the Babaguru formation. The well flowed at a rate of 410 bbl/day of oil through a 6-mm bean, with a flowing tubing head pressure of 290 psia.

Reliance hopes that recent discoveries on this block will open more oil pool areas and lead to better hydrocarbon potential. The block was awarded to Reliance under the government’s NELP-V bidding round.

Xtreme Coil receives contracts for 8 rigs to drill in Rockies

Xtreme Coil Drilling will provide eight rigs for current and new projects in Colorado and Wyoming for two E&P companies. One contract encompasses 7,450 rig days and involves renewal terms for three rigs currently operating in the Denver-Julesburg Basin, plus four other rigs that should be deployed over the next six months to the Rocky Mountain region. The first of these four additional rigs should begin drilling by June 2010.

The eighth rig, an XTC 200DT located in Wyoming and contracted to another E&P company, commenced drilling in May under terms of a new multi-well project that includes both new and re-entry wells.

Xtreme Coil’s three rigs operating in the Rocky Mountain region drilled more than 1.8 million ft during 2009. The record well with these three rigs is 52.5 hrs from the spudding of an 8,500-ft well to the spudding of the next well.

Apache’s Samaa-1X in Egypt tests 44 million cu ft/day of gas

Apache’s second discovery of the year in Egypt’s Matruh Basin, the Samaa-1X, has tested 44 million cu ft/day of natural gas and 2,910 bbl of condensate/day from two zones. The nearby Opera-1X discovery, drilled earlier in 2010, test-flowed 890 bbl/day of oil from the Cretaceous-age Alam El Buieb (AEB-3D) formation.

Samaa-1X is located in the Matruh Concession, approximately 1.2 miles (2 km) northwest of the Matruh field and 3.7 miles (6 km) southeast of the 2008 Maggie-1X discovery. The latest discovery tested 21 million cu ft/day and 913 bbl/day of condensate from the Lower Safa and 23 million cu ft/day and 1,997 bbl/day of condensate from the Upper Safa.

The Matruh Concession, acquired through a farm-out from Shell in 2001, currently produces 130 million cu ft/day of gas and 18,000 bbl/day of oil from 16 wells. The concession has yielded 119 billion cu ft of gas and 11.2 million bbl of oil since Apache established production on the concession in 2003.

Apache is planning to drill 11 additional exploration wells and two appraisal wells in the Matruh Basin during 2010. Apache continues to evaluate 3-D seismic surveys, including a recently completed 155-sq-mile (400-sq km) survey, to identify additional exploration opportunities in the basin.

KCA DEUTAG’s T-45 to drill in Netherlands

TAQA Energy, the Dutch subsidiary of the Abu Dhabi National Energy Co, has awarded a contract to KCA DEUTAG for its heavy land drilling rig T-45 to drill in the Netherlands. Using the rig’s skidding capabilities, the wells are expected to be batch-drilled in clusters of two to three.

South China Sea well yields encouraging results for Husky

Husky Energy subsidiary Husky Oil China has completed drilling and testing of the first appraisal well at the Liuhua 29-1 discovery on Block 29/26 in the South China Sea with encouraging results. Seadrill’s West Hercules semi drilled the Liuhua 29-1-2 well to a TVD of 2,930 m below sea level. The well was drilled and tested in a water depth of 765 m on the Liuhua 29-1 field, which was discovered in January 2010 in the South China Sea.

According to Husky president/CEO John Lau, this first appraisal well tested natural gas at an equipment-restricted rate of 55 million cu ft/day, with indications that the well’s future deliverability could be 60 million to 70 million cu ft/day. The West Hercules drilling rig has commenced the drilling of another exploration well, Liwan 5-2-1, in Block 29/26 prior to returning to Liuhua 29-1 to drill a second appraisal well later in the year.

Keppel completes Maersk Deliverer early

Keppel FELS has delivered the Maersk Deliverer, Maersk Drilling’s third and final unit in this series of deepwater semis, 43 days ahead of schedule. The rigs in this series are capable of drilling 30,000-ft wells and operating at a water depth of 10,000 ft. “These rigs are probably the most outstanding and complex deepwater rigs ever built. A number of innovative features have been implemented in the design,” Maersk CEO Claus Hemmingsen said. The Maersk Deliverer is first scheduled to drill offshore Mauritania for Dana Petroleum under a 90-day contract.

Eni appraises Jangkrik gas discovery

Eni has appraised the Jangkrik gas discovery offshore Indonesia, in the Muara Bakau PSC, Kutei Basin, East Kalimantan. The Jangkrik-2 appraisal well is located approximately 70 km from the coast of Indonesia and has been drilled to 2,449 m in 425 m of water depth. The well encountered more than 80 m of net gas pay.

This result significantly increases the field estimate of recoverable resources with respect to the discovery well. During the Jangkrik 2 production test, the well produced high-quality gas at a tubing-constrained rate of 17.5 million standard cu ft/day.

Eni and its partner, GDF Suez, plan to proceed quickly with the assessment of the technical and commercial viability of a fast-track development of the gas of the Jangkrik field that will be routed to the Bontang LNG plant.

Just a few weeks ago, as I was watching TV and flipping the channel back and forth between CNN’s endless coverage of the BP oil spill and the MTV Movie Awards, I thought to myself: If the whole Macondo saga playing out in the Gulf were a Hollywood film, then the offshore drilling industry would be a shoo-in for this year’s Best Villain Award. (If you’re not familiar with the MTV Movie Awards, the show gives out “Popcorn” statues in irreverent categories such as Best Fight, Best Villain and Best Something-I-Can’t-Print-Here.)

Much of the mainstream media has certainly been happy to go along with the “Offshore Drilling Is Evil” playbook – no big surprise; they’ve been portraying Big Oil as villainous for years. But the frustrating thing about this sensationalized approach to news reporting is that it tends to overshadow key issues that deserve more public exposure and discussion.

To the overwhelming majority of the American public, “offshore drilling” is so far removed from their daily lives that they hardly make the mental connection between drilling and the gasoline they buy at the pump. Stop all deepwater drilling in the Gulf of Mexico? Sure, seems reasonable considering the proportions of the Macondo blowout and spill.

But is the general public getting the full picture and understanding the impact that a six-month blanket drilling moratorium would have on the US economy? I’m not so sure.

IMPACT ON PRODUCTION

Here are some facts from a report released by research and consulting firm Wood Mackenzie, which assumes that deepwater drilling in the Gulf of Mexico is banned for six months:

• 2010 GOM deepwater production will be 46,000 boe/day lower. Twenty of the 33 suspended deepwater wells were development wells.

• In 2011, approximately 193,000 boe/day of production from the deepwater GOM could be deferred. Of that total, 93,000 boe/day would be directly attributable to the six-month halt in drilling; the remaining 100,000 boe/day would be attributable to potential delays in new projects.

• By 2015, 340,000 boe/day, or 17%, of deepwater GOM production could be deferred, due to a combination of the moratorium, stricter drilling regulations and longer permitting time frames.

• A 20% increase in capital and operating costs for deepwater operators – higher insurance costs and higher costs to comply with safety regulations – would erode more than $11 billion in value from existing deepwater GOM projects and would reduce federal tax revenues from those fields by more than $5.4 billion. This level of cost increases could marginalize at least seven current discoveries, which would put an additional $7.6 billion in future government revenues at risk.

• It is unlikely that drilling will quickly return to normal even after the six months are up. Rigs could be moved out of the region due to lack of work, and bringing them back would take time. If new safety regulations require retrofitting or equipment replacement, that could also slow the restoration of drilling.

GULF COAST COMMUNITIES

Talking with an IADC colleague about a town hall meeting he attended in Louisiana recently, he described the overwhelming sense of concern that local residents expressed about the drilling moratorium. For Gulf Coast residents, offshore drilling is the real deal – they recognize its importance, and they know that a six-month drilling ban could end up taking away their jobs and livelihoods.

Offshore drilling is not a villain, and a blanket suspension of all deepwater drilling in the GOM is not a competent solution; it is a non-solution that will only beget more problems.

Linda Hsieh can be reached at linda.hsieh@iadc.org.

IADC has received reports of training providers selling counterfeit HSE Rig Pass Cards in Mexico. The IADC Accreditation and Certification Department (ACD) has begun an investigation. In the meantime, IADC members are strongly urged to verify the validity of any suspicious HSE Rig Pass cards. As there is no easy way of distinguishing between an official card and a false one, contacting IADC ACD staff is the surest means of verifying a card’s validity. For credential verification, please contact Lauren Rouhana or LaDonna Thierry at +1/713-292-1945 or send an e-mail to records@iadc.org.

Hubler, Koceic receive Exemplary Service Awards

IADC recently presented Exemplary Service Awards to two long-time and active members: Warren Hubler, Helmerich & Payne IDC, and Marin Koceic, ED-INA.

Mr Hubler, H&P vice president HSE, received his award at the IADC Drilling Onshore Conference & Exhibition on 20 May in Houston. Throughout the years, Mr Hubler has been active in multiple areas with IADC, including leading industry efforts against mismatched hammer unions, as well as efforts on fall protection and developing the IADC environmental reporting guidelines.

Mr Koceic, technical manager for ED-INA, was presented with his award during the IADC World Drilling 2010 Conference on 16 June in Budapest. Mr Koceic joined the IADC community in 1992 and has worked extensively to help promote the association’s activities in Eastern Europe. “Our first World Drilling conference in Croatia … came about almost solely due to the initial and joint efforts of Marin and his colleagues at Crosco,” IADC president Dr Lee Hunt said. Mr Koceic has also served on the IADC Executive Committee, board of directors, World Drilling program committees and the European Operations Forum.

IADC to brief Cuban authorities on offshore safety

The US Treasury Department Office of Foreign Assets Control (OFAC) has approved IADC’s application for a travel license to Cuba to discuss safety and mitigation of environmental hazards with Cuban authorities. The trip is tentatively scheduled for late August. IADC has been appealing to OFAC the urgency of beginning a dialogue with Cuba as the country begins to examine offshore drilling prospects. IADC explained that such drilling would take place adjacent to US waters. The IADC delegation will brief Cuban authorities on global drilling standards and best practices, environmental protection, safety procedures, hurricane preparation and personnel training.

OSHA announced in a notice of proposed rulemaking on 24 May that it plans to make sweeping changes in fall protection regulations by requiring improved worker protection from tripping, slipping and falling hazards on walking and working surfaces. The proposed revisions would require fall protection devices such as self-retracting lanyards and ladder safety and rope descent systems for general industry workers. OSHA inspectors would be able to fine employers who allow workers to climb permanent and portable ladders without proper fall protection.

Presently, the agency’s standards for fall protection on walking/working surfaces in general industry (1910) differ from comparable standards for construction work (1926) and maritime (1915). In most instances, employees use similar work practices to perform similar tasks, regardless of whether they are technically doing construction or general industry work.

The existing inconsistencies among the general industry, construction and marine standards create difficulties for employers attempting to develop appropriate work practices for their employees. This proposal attempts to close those gaps.

Comments on the proposed rulemaking will be accepted until 23 August. A public hearing on the revised changes will be held after the public comment period. To read the proposed rulemaking notice and get instructions for submitting comments, go to http://edocket.access.gpo.gov/2010/2010-10418.htm.

Marpol Annex v Garbage restrictions to take effect May 2011

The International Maritime Organization has announced that the Wider Caribbean Region Special Area under regulation 5 of MARPOL Annex V will take effect on 1 May 2011. Member Governments and industry groups are being requested to comply immediately on a voluntary basis with the Special Area requirements, which restrict the discharge of garbage in the Wider Caribbean Region. IADC encourages its members operating in the region, which includes the Gulf of Mexico and the Caribbean Sea, to honor this request. Companies should review internal instructions to assure compliance with both flag State and coastal State regulations.

Shell, DOI win alaskan leases dispute

In a notable victory, the US Ninth Circuit has ruled in favor of Shell Oil, the state of Alaska and the US Department of the Interior (DOI), rejecting challenges on the legality of the DOI’s approval of Shell’s Chukchi Sea and Beaufort Sea exploration plans. IADC joined an amicus brief supporting Shell and DOI against the claims, brought by Native Alaskan and whaling communities. Unfortunately, the Obama Administration has suspended drilling on these leases pending a review of offshore drilling safety.

Steve Gangelhoff

The unfolding drama in the Gulf of Mexico has been breathtaking. The sight of a tremendous vessel buckling and sinking, taking human life with it, is an indelible image. For those who are close to this tragedy, it is certainly viewed as their day of infamy. The succeeding relentless bad news surrounding the pollution and threat to marine life is overwhelming.

Everyone has in their lifetime one defining moment, perhaps more than one, and so does every major industry. Certainly one of those was Piper Alpha. For many, the tragedy of the Deepwater Horizon is another. For some of us who have spent decades-long careers working around drilling rigs, putting our life-efforts into supporting and leading offshore drilling worldwide, this event is shattering.

There are many questions to be answered, and undoubtedly the root cause process will get there in time. But with an event of this magnitude, what happens to one happens to all.

CHANGE

The events of the last few years – the rig construction boom, oil price ascent, world financial crisis, drilling rig layoffs – make us uneasy. There have been serious oil price spikes before, but the spike of 2008 was exceptional. Taken altogether, we are processing tremendous change in our industry in a compressed timeline that seems unparalleled.

If you were around our business in the late ’70s and early ’80s, you witnessed a period of tremendous growth in the number of incoming personnel. It was a period of minimal experience and high accident rates, with companies scrambling to develop worker training programs, intelligent hiring practices, job site practices and more. The contract drilling industry’s average number of fatalities over the eight-year period from 1978 to 1985 was 55 per year.

Compared with the eight-year period from 2002 to 2009, with an average number of 26 fatalities per year, it seems like we are doing a better job at accident prevention. Certainly the long-range decline in LTI rates over the last four decades indicates that we are. But the indications that a rise in fatalities is associated with a period of great change makes me uneasy.

I believe we are on the threshold of a years-long period that will throw HSE challenges at us that are as daunting as we’ve ever faced in our industry’s history, and perhaps more so.

I read a great article in the January/February 2010 issue of Drilling Contractor by James Thatcher of EnCana Oil & Gas, “Industry should embark on new safety evolution to encourage common values in the workplace.” The article asserts that safety discipline in the US has passed through three evolutions since the early 1940s. The first evolution centered on equipment, education and enforcement. The second evolution began in the ’60s and addressed ergonomics, empowerment and evaluation, which enhanced the functionality of equipment, made training more formal, and concentrated on industry failure rates like recordable incidents and fatalities.

The third evolution was introduced in the mid-’80s and is still largely in practice today. It resulted from the understanding that causal factors were not equipment-, condition- or system-oriented but were the result of behaviors – shortcuts, bad habits developed over time and poor communications.

FUNDAMENTALS

The fourth evolution that the article proposed focuses on something that we are already doing but that we need to organize, introduce, communicate and manage as an integral part of our safety model. It is culture-based safety, based on the simple premise that we do what we do in life based on our core value system – values like religion, family, honor, duty and country and self-respect.

The author goes on to prescribe a four-step process to implement the fourth evolution through a process that is largely about behavior. It’s about behavior that comes from every individual achieving the belief that “I own safety,” “I can do safety like I do my other core values” and “I will never compromise that value no matter what.”

To me, this fourth evolution is speaking to issues that are more fundamental than training, analysis, design and audit.

In 1982, as a young man fresh from working rotational schedules on rigs for several years, I gave a speech to the United Kingdom Offshore Operators Association. In that “speech,” I noted, “At our company, we have no safety manager – every rig manager, every operations manager holds the title, the responsibility, the consequences.” That ownership generated all sorts of unique ideas that mostly went to the core issue – people.

No question that much of the progress made over the decades in accident prevention comes from our pursuit of technical solutions to equipment and design shortcomings. Some contractors figured out long ago that one key to unlocking worker safety was simply to focus on elevating the quality of life offshore: cleanliness, housekeeping, noise abatement, professionally designed quarters and food menus, particulate control, etc.

It’s no surprise that the safest rig environments I’ve worked in tended to be in countries where the work force consisted of people from the same community or village, people who are friends and often relatives – where the concept of mentoring is not just about teaching, it’s about watching over the lives of loved ones. It’s not about manuals, signage, power points and video clips.

I remember clearly a day 33 years ago when I was in my first few weeks as a derrickman and was offshore northern Brazil. I was working the middle board while running 9 ^5/8-in. casing. Trying desperately to center the pipe, I cupped my hands over the lip of the box, with my fingers inside the pipe, when suddenly I heard someone screaming over the intercom to the driller, “Shut it down.”

The entire rig came to a standstill while the toolpusher exited the quarters and rushed to the rig floor, called me down and put his arm around my shoulder to tell me how I was risking losing all my fingers and how to do the job properly. I remember everything about that day as if it were yesterday. I don’t know if that toolpusher thought that, if he didn’t watch over me, I wouldn’t survive working on a rig, but for the next year he stood in my back pocket almost literally until safety became my core value.

Undoubtedly, some of you are thinking that there is a technical explanation for all tragic events. Perhaps there is a technical explanation and a technical solution for what happened in the Gulf. My experience is there is neither a unilateral cause nor a single solution, and human factors are always a critical component of both.

If you’ve ever lost a loved one to a tragedy at sea, as I have, you’ll feel deeply connected to the current experience of the families of the 11 men lost in April. If you have loved working in this great and vibrant offshore business as I have for decades, you will feel a desperate need to make this right. Our industry will stand back up, examine itself intensely, and respond thoughtfully and vigorously, and organizations like IADC will play a critical role in finding the right way forward.

Steve Gangelhoff, senior vice president – marketing for Northern Offshore, is vice president of IADC’s offshore division.

Dr Lee Hunt, president

On 22 June, the deepwater drilling moratorium in the Gulf of Mexico was set aside by a preliminary injunction issued by US District Judge Martin Feldman. Although the drilling industry welcomes this development, we’re well aware that the fight is far from over. US Secretary of the Interior Ken Salazar vowed to appeal the ruling and issue a new moratorium.

Make no mistake: The battle to put our rigs and our employees back to work in the Gulf is just getting started.

IADC has been working and continues to work at a feverish pace to help our members get back to what they do best – making hole and helping get the world’s much needed hydrocarbon resources out of the ground.

As early as April, IADC was participating in a joint industry task group to make recommendations to the Secretary on ways to ensure offshore safety. IADC also was working with the Shallow Water Coalition for Energy Security to press for the immediate resumption of drilling operations in shallow water depths, less than 500 ft.

President Obama announced on 27 May a six-month moratorium on deepwater drilling – including the suspension of 33 deepwater well operations already under way.

On 4 June, IADC sent a letter to Secretary Salazar urging the Department of Interior to resume issuing permits for new deepwater work. The letter warned that tens of thousands of jobs would be lost in the drilling industry and the Gulf Coast communities. Rather than shutting down an entire industry, IADC urged that the fitness of existing rigs be re-certified and allowed to resume drilling.

In recent weeks, IADC formed the Deepwater Coalition; members are Diamond Offshore, Ensco, Helmerich & Payne IDC, Maersk Drilling, Noble Corp, Pride International, Rowan Companies, Seadrill, Transocean, Edison Chouest and Hornbeck Offshore. The services of Washington, DC-based advocacy firm Van Scoyoc Associates have been secured to help the coalition navigate the industry’s battle ahead.

On the grassroots level, IADC has set up a website (www.IADC.org/offshore_GOM_Reform) providing pre-addressed model letters to US congressional representatives and senators. The website also offers regularly updated news and documents related to the drilling ban. Further, IADC representatives are attending town hall meetings as they’re being held in various cities to ensure that the views of the drilling industry are not overlooked during discussions at the local level.

In a post-Macondo world, it’s becoming apparent that the role of IADC and its HSE, training and competence assurance programs will become even more essential and valuable. WellCAP, which has issued more than 200,000 certificates since its launch in 1995, will continue to ensure high standards of well control training for our industry. HSE Rig Pass will do the same for health, safety and environment training.

Going forward, the IADC HSE Case Guidelines will serve an invaluable role as US regulators adopt Safety Case requirements for drilling in the Gulf of Mexico. IADC believes that the Safety Case, compared with more prescriptive regulations, can be an effective regulatory tool for the industry in the US, as it has been elsewhere in the world.

In the challenging weeks and months ahead, IADC will work closely with our members and government regulators to bring an explicit end to the drilling moratorium.

It’s time to get back to work.