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Operators double down on Permian, seek solutions to operational, downhole and reliability challenges

A panel of operators with assets in the Permian shared their perspectives and outlook on the challenges and opportunities at the IADC Shale Energy Workshop on 13 September in Midland, Texas. From left are Steve McCoy, Latshaw Drilling (moderator); Mike Hollis, Diamondback Energy; Joe Wright, Concho Resources; John Willis, Occidental Oil and Gas; and Joey Hall, Pioneer Natural Resources.

If the rising rig count has made US shale the brightest spot in the global exploration and production market, then the Permian Basin has been the supernova. Of the 916 rigs working in the US onshore market as of late September, 385 were in the Permian. No other US basin even comes close – the Cana-Woodford in Oklahoma sits in a distant second with only 62 rigs. In fact, the Permian has been a major driver of growth in US oil production since 2010, Joe Wright, Executive Vice President and COO for Concho Resources, said during a panel session at the IADC Shale Energy Workshop in Midland, Texas, on 13 September. He pointed out that US oil production grew by 4 million bbl/day from 2010 to 2017, and 40% of that growth came from the Permian. “You can see that it’s very much been a revolution,” he said...

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Virtual, augmented reality adoption on the horizon for drilling industry

Figure 1: The hype cycle, produced by information technology consultant Gartner, is a tool used to forecast the promise of a new technologies’ adoption within the context of the industry and individual adoption for risk. The time for VR and AR to reach the “plateau of productivity,” or mainstream adoption, is estimated at five to 10 years from 2016, with VR reaching that stage before AR.

The technologies of virtual and augmented reality (VR and AR) are increasingly in the news. At the same time, many are wondering how much of this is marketing and whether projects using these cutting-edge formats are providing early adopters a return on their investments. This article will provide an overview on the current status of VR/AR as applicable to the drilling industry...

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No quick recovery in the cards for 2018

US land is likely to remain one of very few bright spots among the world’s drilling markets in 2018. Photo Courtesy of Hess Corp.

Most forecasts call for oil prices to stay within the $45-$55 range next year as global oil production stays high despite OPEC’s agreed cuts By Linda Hsieh, Managing Editor Stability, not a quick recovery, may be where the drilling industry has to turn for comfort in 2018. Oil prices, which will likely average around $50 this year, are mostly forecast to stay within the $45 to $55 range next year. It isn’t until at least the second half of 2018 or perhaps 2019 that some upward price pressures may enter the market. Oil inventories, global energy consumption and OPEC’s decision on whether to extend its production cuts beyond March 2018 are all being closely watched. For the drilling sector specifically, ...

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Deepwater drilling segment reaches nadir in 2017, may see beginnings of a steady recovery in 2018

The Pacific Scirocco drillship recently completed a contract with Hyperdynamics Corp offshore Guinea. The contract was for one firm well, with three optional wells. Short-term contracts like this are still pervasive in the ultra-competitive deepwater market.

As the deepwater drilling industry looks toward 2018 and beyond, here’s the silver lining: The worst is likely over. Conditions are still difficult, with few work opportunities available for the large supply of deepwater rigs worldwide. However, companies can take some comfort in the fact that things appear to be on the mend, if slowly. “We believe 2017 does actually represent the nadir of activity in deepwater wells drilled,” said Ben Wilby, an analyst with Westwood Global Energy Group. “It increases next year and then increases steadily for the foreseeable future.” This means rig utilization will also see a slow and steady increase beginning in 2018, although a still-oversupplied rig market is expected to keep dayrates down for the foreseeable future...

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ART Committee considers data quality challenges, electronic DDR

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The IADC Advanced Rig Technology (ART) Committee is moving forward with new projects on several fronts, including an initiative to digitize daily drilling reports (DDRs). In this video with DC, Robin Macmillan, Chairman of the IADC ART Committee, talks about potential future work plans being discussed within the ART group, as well as findings from an audience poll taken at the 2017 IADC ART Conference, held 24-25 October in Amsterdam.

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Madsen: Industry must embrace innovation, digitization to drive sustainable change

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By Linda Hsieh, Managing Editor The drilling industry must transform itself in order to reach a sustainable and lower level of cost for oil production, and this transformation can’t be achieved by making small improvements. “We need to rethink our approach to innovation,” Jorn Madsen, CEO of Maersk Drilling, said at the 2017 IADC Advanced Rig Technology Conference on 24 October in Amsterdam. “We need to embrace digital solutions that can bring drilling productivity to the next level – and not only drilling productivity but also productivity in other parts of the value chain.” Further, to make the kind of significant improvements that are needed, companies must recognize that this is a commodity industry. “We, as an industry, need to ...

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Blockchain technology may contribute to evolution of drilling data sharing

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The current model of data sharing in the drilling industry is broken, Andrew Bruce, CEO of DataGumbo, said at the 2017 IADC Advanced Rig Technology Conference in Amsterdam on 25 October. In this video with DC, Mr Bruce discusses how data sharing might evolve in the coming years, as well as alternative models for data sharing that are being enabled by emerging technologies like Blockchain. Also, read Mr Bruce’s article about data ownership and sharing from the Sept/Oct 2017 issue of DC.

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Artificial intelligence-enabled flexibility at heart of cognitive drilling platform

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By Linda Hsieh, Managing Editor Schlumberger is in the final stages of commissioning its Rig of the Future, which should be commercial by early 2018, Arindam Bhattacharya, President of Schlumberger Land Rigs, said at the 2017 IADC Advanced Rig Technology Conference on 25 October in Amsterdam. The rig brings together not only automation but also mechanization, including a central hoisting and rotating system, as well as an integrated fluid system that will help to integrate workflows like cementing and managed pressure drilling. Elements of the downhole system, like stick-slip mitigation, can also be optimized through automation. The Rig of the Future project was driven by the lower oil price environment and the desire to thrive, not just survive, in this ...

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Procedural adherence teams help align employee, company values and reduce incidents

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The industry’s traditional approaches to investigating and preventing incidents – including audits and reports – don’t work, Jerold Timpson, President of Kaufman Global, said in a presentation at the 2017 IADC Human Factors Conference in Galveston, Texas. These methods rely on human memory, which is fallible, and often require people to incriminate themselves, which they’re unwilling to do, he explained in a video from the conference on 17 October. In the video, he also discusses the benefits of using procedural adherence teams to align values and reduce incidents...

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To address human factors, industry must improve implementation

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The oil and gas industry is now devoting significantly more time and energy to accounting for human factors when writing procedures and creating new training programs. However, human factors is not new to the industry. Groups like the International Association of Oil and Gas Producers (IOGP) have been looking into human factors for 20 years, Chris Hawkes, Safety Director for IOGP, said during a panel session at the 2017 IADC Human Factors Conference in Galveston, Texas. Events like Macondo have brought this discipline into even sharper focus, he added. In this video from the conference on 17 October, Mr Hawkes explains why their industry needs to better account for how human performance is impacted by the need for social survival. He also discusses how the industry, which is excellent at developing recommendations and guidance, can be better at their implementation....

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