Drilling Ahead: Strong oil prices, enabling technology drive expansion

Posted on 28 January 2011

By Mike Killalea, editor & publisher

Despite continuing uncertainty in the US Gulf of Mexico, the industry is smiling. Oil prices are rising, a driller’s delight.

Orders for new, high-spec offshore rigs have multiplied. Diamond Offshore Drilling, Noble Corporation and Pride International have each announced advanced rigs and negotiated options for additional units.

Perceptions of sustainable demand for premium equipment to drill the wells of tomorrow have pushed overbuilding concerns to the far back seat. This is true onshore as well as off.

“The long-term outlook for the deepwater drilling sector is expected to remain fundamentally strong,” said Pride president and CEO Louis Raspino. He cited steady geologic success, new emerging markets, shifts to field development, a preference for the most advanced rigs, new technologies that improve recovery rates, and the perception that world economic growth will support oil prices at a level sustaining deepwater development.

Pride in December ordered its fifth ultra-deepwater drillship since 2007. With delivery slated for mid-2013, the rig will boast advanced systems for hoisting, BOP handling and more.

Similarly, Diamond Offshore has contracted to build a $590 million ultra-deepwater drillship. Delivery is planned for the second quarter of 2013. The Diamond rig will feature a seven-ram blowout preventer, dual-activity capability, five mud pumps and a 1,250-ton hook-load capacity.

“The addition of a new drillship to our fleet is part of a continuing effort to enhance our ultra-deepwater capabilities at attractive capital costs,” remarked Diamond Offshore president and CEO Larry Dickerson.

Noble also put its money where its mouth is to leverage opportunities both in deep and shallow water. Noble has ordered both two ultra-deepwater drillships and two high-specification, harsh-environment jackups. Drillship deliveries are slated for the second half of 2013, while the jackups are expected at the end of 2012 and mid-2013.

(See D&C News and www.drillingcontractor.org for details on the rig orders.)

As Mr Raspino noted, new technologies, both downhole and topside, are enablers for deepwater. They have also driven the amazing resurgence in land operations, notably shale plays.

If you are not a stranger to this page, you are familiar with IADC’s championship of enabling technologies, including managed pressure drilling and advanced rig technologies.

Most recently, IADC formed a Dual Gradient Drilling Subcommittee. The new work group will serve as a nexus for developing DGD best practices and building awareness of the technology.

More on the DGD group is available on www.drillingcontractor.org.

Land drilling is enjoying a gleeful renaissance in oil and gas shales, enabled by horizontal drilling and fracturing technologies. New demands are revolutionizing land rigs into well factories. It’s like transforming post-hole diggers into fence-building machines.

Automation of both topside and downhole systems leading to human-free drilling is being vigorously pursued. Come to Amsterdam on 28 February for an afternoon of presentations exploring this topic, sponsored by the IADC Advanced Rig Technology Committee and the SPE Drilling Systems Automation Technical Section (www.spe.org/events/dc/2011/pages/general/panel.php).

In the brave new oilfield, technology is the differentiator, whether for tomorrow’s massive deepwater reservoirs, or the marginal fields of today and yesteryear.

Mike Killalea can be reached via email at mike.killalea@iadc.org.

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