Drilling advances

	Vol. 225 No. 7
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

New carbon drill pipe. The US Department of Energy (DOE) recently announced development of a new “composite” drill pipe that is lighter, stronger and more flexible than steel, and which could “significantly alter the ability to drain substantially more oil/gas from rock from horizontal wells, than from traditional, vertical wells.”

Developed under a four-year, $3.6 million cooperative agreement managed by DOE's National Energy Technology Lab, the new drill pipe – made from carbon fiber resins – could be the next major technical achievement emerging from the government-industry natural gas research program. Lighter, stronger, and more flexible than steel, the pipe could significantly benefit US energy production.

The composite pipe will be used by Integrated Directional Resources, Lafayette, Louisiana – the first commercial order. Since the new pipe is more flexible than steel, it can better withstand stress/ fatigue associated with drilling short-radius horizontal holes. It is more expensive than traditional steel pipe, but can cycle or rotate through a short-radius bend for extended periods without suffering fatigue damage. Plus, it can be reused in multiple wells, leading to a significant decrease in drilling costs.

The new drill pipe has been successfully field-tested at two Oklahoma sites. At one previously producing site, the well was drilled another 1,000 ft, where it struck an oil-bearing zone. Another test allowed the composite to punch a 60-ft radius, 1,000-ft lateral through hard sandstone from a shallow well in a successful search for gas.

Using older wells as entry points reduces the environmental footprint of drilling and production operations. The 2-1/2 -in. drill pipe may lead to the design of larger pipes for deepwater applications. Researchers may also be able to embed an electrical wire in the resin to provide a high-speed data link to and from the bit.

Major offshore drilling spending. Over the next five years, it is expected that 15,000 offshore wells will be drilled worldwide, at a total cost of some $189 billion. Of these wells, nearly 4,500 will be exploratory, costing $75 billion; and around 10,500 will be development, costing $114 billion. It is estimated that drilling and completion expenditure in 2003 was $36 billion. Spending levels are expected to grow somewhat over the next two years and then decline slightly, stabilizing at about $37 billion per year. These are among the findings of the second edition of the 215-page, “ The World Offshore Drilling Report,” published in mid-June by Douglas-Westwood.

The largest change forecast is continuing growth in deepwater drilling – over 500-m (1,640-ft) water depth – which contrasts with a long-term decline in shallow-water activity. In the last decade, reductions in available shallow water drilling opportunities have been counter-balanced by increasing deepwater activity. On average, around 3,000 to 3,200 offshore wells are drilled each year, of which 12% are now in deep water.

These are expected to increase to about 17% of all wells drilled in 2008, with $56 billion (30% of the total) forecast to be spent globally on drilling and completing deepwater wells over the next five years. This is an increase from $37 billion in the previous five-year period.

Africa and Latin America saw deepwater drilling expenditure exceed shallow water drilling expenditure for the first time in 2003, and the gap will increase in both regions through the forecast period. With the exception of the Middle East where there is no deepwater activity, all other regions should see some shift from shallow to deep water.

North America, at $57 billion, will again have the highest share of the total spend, increasing by $3.4 billion (6% growth), compared to the previous five-year period, even though the total wells drilled will decline slightly. Latin America and Africa should see an increase in expenditure of $6.1 billion and $8 billion, respectively, a growth of about 43%. Although Asia's forecast five-year spend is about the same as the previous period, the outlook for Western Europe is a decline of 12%, despite cost escalation.

The deep and ultra-deepwater rig market is expected to remain at high utilization rates throughout the period, especially for drillships and fifth-generation semis rated for 1,500-m water. Water depth capabilities will continue to grow beyond the present drilling record. The shallow-water semi market will be generally weaker, but declines in the GOM and the North Sea will be counter-balanced by a pick-up in West Africa, India and China, at least over the first two years of the five-year period.

Demand for high spec jackups is likely to remain strong as new gas projects are identified, particularly for Gulf of Mexico deep reservoir gas drilling. Consequently, most new expenditure on rigs is expected to be directed at upgrades of both jackups and floating rigs to allow faster drilling and deeper water and/or deeper reservoirs. For information, check the web: www.dw-1.com.

Deepwater discoveries in US GOM. The Minerals Management Service recently announced eight deepwater discoveries in US deep water so far in 2004 – a trend the agency expects to continue. The list of discoveries includes a BP discovery on its Puma project in Green Canyon 823 in 4,130-ft water; Unocal's Tobago, Alaminos Canyon 859, (9,627 ft of water); Dominion's San Jacinto, Desoto Canyon 618, (7,850 ft of water) and Thunder Hawk, Mississippi Canyon 734, (5,724 ft); Kerr McGee's Dawson Deep, Garden Banks 625, (2,900 ft), Ticonderoga, Green Canyon 768, (5,250 ft) and Gold Finger, Mississippi Canyon 771, (5,433); and Anadarko's Atlas NW, Lloyd Ridge 005, (8,810 ft).

MMS hailed the results as very encouraging, saying, “We are off to a great start in 2004. The deepwater GOM continues to rapidly unfold as the major domestic energy source. While several new deepwater projects came on production in the Gulf in 2003, these eight new discoveries indicate the province is still developing at a brisk pace.”

Several more deepwater projects began production this year, ExxonMobil started up Llano field, in the Garden Banks area in 2,600 ft of water; and Dominion started production from Devils Tower, Mississippi Canyon, in 5,610-ft water. MMS says the steady drilling program and the growing deepwater infrastructure all indicate that the deepwater GOM will continue to be an integral part of US energy supply and remain one of the world's premier oil/gas basins.