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Times are tough in unbalanced market, but industry should recognize, prepare for increasing volatility as the new norm

Trent Latshaw, President, Latshaw Drilling and Exploration Company

What do you consider to be the biggest challenges that drilling contractors face at the moment? The biggest challenge is simply rig rates. During downturns like this, just trying to stay alive and make it to the other side of this cycle is the No. 1 concern. Aging rig equipment may be an issue with some companies but not with us. About 99% of our rigs have been built new since 2006. Do you think the fundamentals of the industry are still good?

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Improved techniques, mixing units can minimize crew exposure to caustic soda on drilling rigs

Many companies in the drilling industry still use traditional techniques for mixing caustic soda. This includes using 55-gal barrels with connected paddles to facilitate the mixing operation. Some drilling companies, however, have upgraded their units by adding an electrical motor for agitation purposes, instead of using manual handles.

Hazardous substances cause 74,000 work-related deaths in EU countries each year. This indicates that more people die from dangerous substances than from workplace incidents. Caustic soda is one of the hazardous substances. A significant number of employees are away from work due to caustic soda skin burns, which can take weeks or months to heal.

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For shale business to survive, employees must think like owners, orient organizational culture to the bottom line

Alex-Archila-photo

What do you see as the most critical challenges facing the upstream side of the oil and gas industry right now? Clearly, the cost issue is front and center. Some people say that you should never waste a good crisis, but to me, it goes beyond that. The margins have shrunk extensively, and we don’t have an option but to respond. We have cut our capital program for US shale from more than $4.5 billion in FY 2013 to about $1.5 billion this year.

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Opportunities to lower costs will abound if service companies are engaged at design phase, allowed to leverage expertise

Guy-Arrington

We did not need the decline in oil prices to know that the E&P companies’ investments were growing faster than commodity prices. There was no way that rate of investment could continue, and something had to change. All the downturn did was provide the push for all of us to move more quickly to confront this issue, so that’s what we’re doing now. The biggest challenge today is addressing the cost concerns for operators and ourselves. The profitability of the industry as a whole, and the service companies in particular, depends on the way we work together, adopt new technologies, learn from other industries and align our technical and commercial interests.

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To achieve sustainable cost reductions, industry must break old paradigms, adopt more technology standardization

MikeBowie

Mike Bowie is North America Region Executive-Subsea Systems and Drilling at GE Oil & Gas. Mr Bowie also serves as the IADC Division Vice President of Drilling Services and is a member of the IADC Executive Committee. What do you consider to be some of the biggest challenges facing the upstream industry at this time? How can we begin to address these challenges? All companies are challenged with cost reductions due to the market. The real question is how to address fundamental opportunities to improve productivity and efficiency, not just cut costs through the brute force of asking for price di

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Drive for efficiency must continue but comes with costs, may require industry to rethink how it drills and does business

NielsEspeland

Industry needs to find balance point where all stakeholders can achieve safe, sustainable operations, retain critical focus on people By Linda Hsieh, Managing Editor Niels Espeland is President, International, at Grey Wolf Drilling International, the international arm of  Precision Drilling. Mr Espeland also serves as IADC Division VP International Onshore and is a member of the IADC Executive Committee. From your perspective at Grey Wolf, what are the most critical issues that the industry is facing right now? We have an oversupply of oil driven by efficiency gains, high oil prices for several years and increased unconventional production in North America. At the same time, we have seen stagnation in demand and growth. If you look at other commodities like ...

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Costs must be controlled, but savings achieved via cuts in HSE, training are just false economy

Williams_David-2013

David Williams is Chairman of the Board, President and CEO of Noble Corporation. Mr Williams is past Chairman of IADC and is a member of the IADC Executive Committee. From your perspective at Noble, what do you see as the most critical challenges facing the industry in this down market? The most critical challenge, and overarching goal for Noble, is to deliver safe operations and ensure environmental awareness in all that we do. Whether the market is up or down, we are committed to running our business in a safe and responsible manner. Cycles are just a part of this business. It’s the nature of the beast. Predicting when a change in the cycle will occur is next to impossible, but history tells us they will come. At Noble, we’re blessed with some very good contract coverage, and our focus remains on continuous improvement to safety and environmental compliance and on running our business efficiently.

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Research project aims to improve safety by learning from success

Figure 1: This simplified model for success, failure and variability illustrates how individuals handle deviations from normal variation in work performance.

Many theories, concepts and perspectives are available to the petroleum industry to help it understand failure. Similarly, there is a rich array of methods to analyze the causes of accidents and critical events. A great effort is put into such analyses and dissemination of results, by the industry and by national authorities. However, when it comes to successful operations, the industry lacks the language and theoretical “infrastructure” to conceptualize success. Further, there is a scarcity of methods for analyzing and learning from successful operations.

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2016 Chairman: IADC to sustain engagement with public, regulators

In recent years, Rowan has expanded into the ultra-deepwater sector with the construction of four state-of-the-art drillships, including the  Rowan Resolute.

When someone graduates with a DPhil (PhD) from the University of Oxford, a typical career choice might be to go into academia, or perhaps a research institute. But Tom Burke is not a typical guy making typical career choices. Instead of following such traditional paths, he decided to go offshore and work on drilling rigs. He didn’t have family in the business, and the year was 1994 – a difficult time in the drilling industry.

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Shale won’t replace deepwater, but offshore industry must reengineer value chain to reach economic parity with onshore

Chris Beckett, CEO, Pacific Drilling

We noticed signs of weakness and a relative lack of contract availability as early as Q2 or Q3 of 2014. The ultra deepwater-focused companies were already considering how deepwater economics were challenged at $75-$80 per barrel price. As a result, we had seen a lot of our clients take a pause in exploration activity, but obviously, it’s gotten worse since 2014.

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