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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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Onshore drillers pull all available cost levers to economize wells

Precision Rig 580, drilling in the Niobrara Chalk, is a 1,500-hp rig with a maximum drilling depth of 20,010 ft.

Even at the end of 2015, there had been some small hope that there would be a slight recovery in oil prices by mid-2016, lifting onshore drilling activities somewhat higher later in the year. However, when oil prices sank below $30/bbl in January, such optimism faded. Instead, the fall further motivated cost-reduction efforts across the industry. Operators were pressured to continue cutting back on their rig count and to seek additional ways to enhance efficiency throughout the well construction process. Drilling contractors appear to be ridding themselves of older rigs and directing resources toward maintaining their newer, high-spec assets.

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Competition for rig work ratchets up in Asia Pacific

The Opus Tiger 1 has completed sea trials and is currently located in Shanghai. The rig can operate in water depths ranging from 300 to 5,000 ft and can drill to a maximum depth of 32,800 ft. The rig is part of Opus’ strategy to focus on the midwater drilling market.

As oil prices fell to less than $30/bbl earlier this year, the associated reduction in rig demand severely stressed drilling contractors worldwide. The Asia Pacific was no exception. “It has been relatively quiet,” said Yun Yun Teo, IHS Petrodata’s Principal Analyst for Rigs, Asia Pacific. “I don’t think we are going to see that 2016 will be much of an improvement over 2015. In fact, it will probably be worse.” For example, although operators in the Asia Pacific normally send out multiple new rig tenders during the winter budget season, this time around drilling contractors saw “only a handful,” Ms Teo said.

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Beyond ROP: Industry taking systems view to drilling optimization

Interpretation of downhole data is a key focus at Weatherford, which recently established a global Drilling Engineering and Optimization group to ensure consistency and best drilling practices in addressing downhole issues, such as torque-and-drag and stuck pipe. Improvements in sensors to capture high-frequency downhole data have enabled the industry to move from recording one data point every five seconds to 1,000 samples per second.

Optimized drilling once meant drilling farther and faster to achieve high rates of penetration (ROP) using efficient, cutting-edge technologies and approaches like pad drilling. Today, with oil prices remaining low, that need for speed has given way to a more balanced approach, with operators taking a step back and a wider view of downhole drilling optimization.

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Global oil slump puts Africa’s drilling potential on hold

The Ensco DS-8 is contracted to Total until November 2020 for operations in Angola. Total expects to decrease its rig count in Africa from 12 in 2015 to fewer than 10 in 2016.

Although significant potential remains for increased drilling activity in Africa, the global oil price slump has left this market stagnant for now. Exploration activity throughout the continent was largely on hiatus in 2015, and if oil prices remain low through 2016, this trend is almost certain to continue. The drop in exploration activity is a result of reactionary budget cuts, as operator profit margins have become increasingly strained due to the still-falling oil prices. Such was the case for Total, an operator that spends a third of its total investments on the African continent. “The impact of the low-priced oil environment currently is that we have started the project of strong cuts and reduction of costs,” Benoît Ludot, Vice President Drilling & Completion for Total Exploration-Production, said.

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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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