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Fulfilling the need for speed: Drill bit designs drilling further, faster

The third iteration of Baker Hughes’ Kymera PDC roller cone hybrid drill bit has been given a sharper and more dense cutting structure to boost ROP and durability in hard carbonates and interbedded rock.

Modern drill bits have improved exponentially over the past several years, but operators continue to raise the bar in terms of expectations for more efficiency and durability. From horizontal wells in North American shales to Middle Eastern wells with 3,000- to 6,500-ft sections and even some deepwater wells using rotary steerable systems, operators now oftentimes expect to drill entire hole sections without tripping out for a new bit. “More than 60% of the sections drilled around the world today are already done with one bit, which means that the primary way to reduce customers’ drilling costs in those sections is to significantly increase ROP,” said Allen White, Product Champion at Smith Bits, a Schlumberger company.

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Deepwater leveling out but likely to stay flat through 2018

Statoil has used the Transocean Discoverer Americas drillship in deepwater exploration projects in East and North Africa and the Gulf of Mexico. Next year, Statoil plans to undertake deepwater exploration in Brazil, Eastern Canada and the Barents Sea. Photo Courtesy of Paul Joynson, Hicks AP, Statoil.

When oil prices began falling in 2014, the industry’s collective hope was that they wouldn’t stay down for long. However, the industry is now closing out its second full year in a massive downturn, and there’s not much good news on the horizon for offshore drillers. Over the past two years, many of their older assets have been retired – 10 drillships, 52 semis and 27 jackups since July 2014, according to IHS. But that hasn’t been enough. The offshore rig market is still out of balance.

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‘Permian Panic’ draws operators, boosts US onshore rig count

Scandrill’s Scan Vision rig is working for Anadarko in the Permian Basin. The 1,500-hp AC rig was recently upgraded and includes a multidirectional walking system for pad drilling that has a total lift capacity of 2.4 million lb. Scandrill plans to eventually update its whole fleet with AC kits. All of the company’s remaining SCR rigs have been fitted with 7,500-psi, 1,600-hp mud pumps.

Low oil prices may be leaving the global drilling industry cold, but right now the Permian Basin is red hot. It’s so hot that people are calling it the “Permian Panic” – companies are rushing to snap up acreage because it is considered the lowest-cost US tight oil play with the best producing rock in North America. “The Permian is the key of all the tight oil plays,” said Skip York, VP Integrated Energy at Wood Mackenzie. The firm estimates that approximately a quarter of global oil and gas mergers and acquisitions (M&A) this year have taken place in the Permian.

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Remote directional drilling sets roadmap to industrialization

Using Schlumberger’s drilling advisor service, drillers on Precision rigs receive real-time steering recommendations when drilling directional wells. So far, Precision Drilling has drilled two wells with this service, each with only one directional driller on the rig. For Precision’s turnkey operations, all directional driller expertise will eventually transition off site, with the driller following the instructions generated by the software and supported by the directional drillers in the remote operations center.

In 2014, Precision Drilling, Schlumberger and Pason Systems launched an initiative with the aim of industrializing unconventional drilling in North America. Specifically, the companies set out to transform directional drilling by increasing repeatable high-quality results while simultaneously reducing the manpower and time required to drill a well. This collaboration is now coming to fruition, resulting in a remote directional drilling service that uses Precision’s drilling rigs and Schlumberger’s abbl drilling operations adviser service.

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Troubled Brazil works to open pre-salt, ease regulatory restrictions

The Brava Star, QGOG Constellation’s ultra-deepwater drillship, can drill in waters as deep as 12,000 ft. The rig was delivered from Samsung Heavy Industries in 2015.

As of July, Petrobras had 39 floating rigs on contract in Brazil. That compares with 60 at the beginning of 2015 and 42 at the end of that year, according to Rudimar Lorenzatto, E&P Executive Manager for the Brazilian national oil company. Despite this fall in activity, Petrobras remains heavily focused on the pre-salt. Of the 60 wells planned for 2016 and another 60 planned for 2017, 60% are expected to be in the pre-salt areas. “Pre-salt is the main focus in the future for Petrobras’ business plans,” Mr Lorenzatto said.

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Proppant demand: Operators save through locally sourced sands

This Liberty Oilfield Services frac fleet is operating in North Dakota’s Bakken. The company has been able to complete wells greater than 10,000-ft deep in this region using northern white sand and attributes this to significantly increasing the amount of sand pumped into wells.

North American operators are turning to locally sourced sands as a way to reduce proppant freight costs. “Companies are buying the cheaper sand either because they believe that there’s not enough impact on production to warrant additional costs of white sand, or because they simply have to lower up-front costs, sometimes even at the expense of sacrificing long-term production to complete wells,” Samir Nangia, Director of Consulting within the IHS Energy Insight group, said.

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North Sea industry learning to live in world of $60 oil

The Maersk Interceptor is under a five-year contract with Det Norske, working in the Norwegian North Sea. Contracts of this length have become rare as operators opt for short one- to two-well contracts.

Although the global oil downturn continues to cast a shadow over the North Sea E&P market, all segments of the industry are pitching in to reduce costs and help this mature basin remain viable well into the future. Similar to other parts of the world, the cost of development in the North Sea increased significantly during the last boom. As oil prices fell, however, companies have been forced to find new ways to bring costs in line with lower budgets. “The UK is particularly challenged as the cost of production in the North Sea has become unacceptably high,” said Hannon Westwood General Manager Brian Nottage. “In the UK, we have about 300 assets currently on stream, and about a third of those are struggling to make money at current prices.” The UK government is helping by lowering taxes for oil producers, although this is unlikely to bring about significant changes in the short term.

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Pushing the envelope in deepwater cementing

The Baker Hughes Integrity eXplorer cement evaluation system uses electromagnetic acoustic transducers to generate shear and lamb acoustic waves along the casing. This provides a measurement of the cement bond to the casing.

As operators continue exploring and developing deepwater resources, cementing challenges have increased exponentially due to the very narrow pore pressures and fracture gradients typically seen in deepwater wells. Not only do operators have to ensure they’re achieving the necessary zonal isolation and sufficient cement coverage, they’re also now dealing with increasingly thicker casing and the resulting tighter restrictions. Thicker casing has come about due to the industry’s desire to improve safety, said Iain Levie, Vice- President of Global Technical Services for Antelope Oil Tool. “Casing designs require more robust burst and collapse thresholds, so operators are moving toward thicker-walled casing.”

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GOM future unclear in face of Well Control Rule, falling rig count

The Maersk Valiant ultra-deepwater drillship is under contract with ConocoPhillips and Marathon Oil until July 2017. It is one of two Maersk ultra-deepwater rigs working in the US Gulf of Mexico. As Mexico gears up for its deepwater auction in December, contractors are looking to that part of the Gulf for additional work opportunities, as well. In particular, contractors like Maersk that have deepwater experience on the US side may be well-positioned because the US and Mexican sides of the Gulf are believed to be geologically similar.

Operators seeking to reduce their capital and operating expenditures in the face of sustained low oil prices are facing difficult choices. When it comes to either greenlighting or scrapping drilling projects – particularly those in the prolific but expensive Gulf of Mexico (GOM) Lower Tertiary – many are choosing deferment or cancellation. In its Q4 2015 earnings call, held on 29 January, Chevron announced that it was canceling the Buckskin-Moccasin deepwater project, citing difficult economic conditions. Anadarko is also delaying final investment decisions on its Yeti and Shenandoah prospects, located in Walker Ridge and Middle Miocene areas. The company had drilled appraisal wells for both projects in 2015.

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