Staying in balance is key to Anadarko model

Posted on 11 November 2009

Steve Bosworth, Anadarko

Steve Bosworth, Anadarko

Steve Bosworth, Anadarko vice president worldwide drilling, gave thanks to the drilling contractors that were willing to work with his company on contract renegotiations over the past year as commodity prices nosedived and access to capital went into deep freeze, during his keynote address at the 2009 IADC Annual General Meeting, 8-10 November in Miami, Fla.

“Thanks to a lot of you guys here in this room and your companies, we did something that I really didn’t think was possible… most of us are publicly held companies, and we have responsibilities to our shareholders. No matter how much we feel each other’s pain, nobody put a gun to our head to sign these contracts. So we absolutely, positively had to honor the contracts, no doubt about that,” he said. “What we did do was discover something innovative that would keep the contract whole and get us out of this bind we’re in.”

In most cases, this involved restructuring contracts to lower dayrates in exchange for a longer term.

Anadarko started 2009 with close to 60 operated rigs in the Lower 48 and 31 newbuilds working under term contracts. They’d also ordered more newbuilds to be delivered in 2009.

However, the market situation led the company to buy out 10 of those term contracts in the first quarter of 2009, which cost them $24 million. At that point, this was deemed to be the better option as drilling rigs are only 20% to 25% of an AFE well construction cost. Buying out the contracts would save them from having to spend the other 70% to 80% of drilling a well.

Several years ago Anadarko embarked on “an aggressive strategy” to put deepwater rigs under contract, which the company feels has really paid off. “We are absolutely, positively glad to have these rigs under contract right now,” said VP worldwide drilling Steve Bosworth.

Several years ago Anadarko embarked on “an aggressive strategy” to put deepwater rigs under contract, which the company feels has really paid off. “We are absolutely, positively glad to have these rigs under contract right now,” said VP worldwide drilling Steve Bosworth.

The company currently has 34 operated rigs in the US, with four of those in the Gulf of Mexico. The rest are land rigs split up between the Rockies and the Southern region. A total 73% of these 30 Lower 48 rigs are on long-term contracts – six each are set to expire in 2010 and 2011; 13 to expire in 2012 and two in 2013.

Mr Bosworth noted that the “fun” part of having all these rigs has been being able to significantly reduce Anadarko’s operational cycle times. “Being able to drill cheaper, deeper, safer, faster, better – that’s what makes the job fun, and that’s what I appreciate from all of you guys who provide the equipment.”

Thanks to technology advances on rigs and with directional drilling, plus better communication and better trained personnel, drilling efficiencies have been dramatically enhanced on many land drilling projects. As an example, he said, 8,000-ft directional wells in the Wattenberg near Denver, Colo., are being drilled in just over 50 hours. “That’s incredible – two days!”

Anadarko also continues to focus on deepwater, with 90% of exploration capital this year going to drilling. The company has already announced seven deepwater discoveries this year, with four in the Gulf of Mexico and three offshore West Africa.

“We also have six more high-impact exploration to drill this year… and we think we’ll have greater things to announce in the future,” he said.

Leave a Reply

*

FEATURED MICROSITES


Recent Drilling News

  • 17 December 2014

    Saudi Aramco: Four factors for a sustainable drilling business

    Despite the modest growth in demand and drop in oil prices today, the long-term outlook for industry is healthy. “Our industry will need to add around 40 million bbl per day for new capacity...

  • 16 December 2014

    Ensco development program produces driller in 3 years

    Ensco’s Accelerated Development Program (ADP) takes a “green” individual and, within a three-year period, trains them to become a driller. In response to personnel shortages in various areas, including drilling...

  • 16 December 2014

    Saudi Aramco: ‘Industry cannot afford to lose talent when the economy is down’

    Industry is facing a human resources challenge in two areas: the ageing workforce and the shortage of skills, Mohammed Al Sellemi...

  • 16 December 2014

    Nanotechnology has potential to improve tool performance in extreme environments

    In terms of temperature stability and corrosion, tools have limitations, especially in extremely challenging drilling environments. Jothibasu Ramasamy...

  • 16 December 2014

    Colville: WCI provides forum to evaluate practical, economical advances in well control practices

    Major players throughout industry are joining forces under the Well Control Institute (WCI). The mandate of WCI is “to provide the definitive forum...

  • Read more news