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

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

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

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

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

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

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

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

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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