Drilling advances

	Vol. 226 No. 12
LES SKINNER, PE CONTRIBUTING EDITOR

A season for everything. A great man once wrote that for everything there is a season. I concur. This is the season for celebration, for good food, for good companionship and for reflecting on one of the best years we’ve had in the recent past as drillers. It’s also a time for a few other things.

Personnel. It’s certainly a time of shortages on the rigs. Everything from drill bits to cement, steel to steel-toed boots, float equipment to wellheads. Mostly, there’s a shortage of people. The people shortage is critical and, as in every other boom, there is the inevitable piracy problem between companies, and drillers are the willing recipients of the all the goodies associated with changing crews. Signing bonuses, raises, new windbreakers – every incentive that money can buy. It doesn’t seem that we’re getting any new bodies in the business, however. We just see the same old ones wearing different coveralls as we go from rig to rig.

It’s not really surprising. Loyalty was once an important aspect of work in the oilpatch. You rode for the brand – period. Then, when times got hard, the operators and service companies decided they could survive by downsizing (that means firing people). Lots of people I know left the oil industry years ago. They aren’t ever coming back. So where do we look for new hands?

Well, here’s an idea: veterans! Most countries have young, capable people serving in their military somewhere. Hopefully, 2006 will see a return of these folks from service, wherever that might be in the world. Each one will be looking for a job – unless they left one to which they can return. These young people are trainable, hard-working, compliant and persistent. Seems like the right combination of qualities a driller would need to staff his team. Oh yes, that’s another quality. They are definitely team players – they have to be to survive. So, hire a vet and put him/her to work.

How about retention programs? Maybe it’s time to think about keeping the most valuable asset any company has on its balance sheet – its people. Most oil companies and all drilling contractors have made some juicy, record profits recently as a consequence of a worldwide increase in oil prices. It seems pretty easy to figure out a way to keep the hands. Lest there be any confusion, let me be blunt. Hey guys, how about some nice fat bonuses for the drillers? It’s amazing how that can work in an operator’s or a drilling outfit’s favor especially during the holiday season. Better parting with a portion of the profit to keep your staff than to have some rag-tag government official or dictator decide that these record profits deserve yet another windfall profits tax. So, use part of the profits to keep the people (this would qualify as a legitimate business expense which lowers the amount of profit that must be reported, thus diminishing the size of the taxable target – hint, hint).

Scams. It’s also a time for fraud. We are already seeing some of the same drilling-related scams we saw during the last boom recycled for this one. These include the old classics: over-charging for some service or time spent on the project, delivering sub-standard materials and equipment, putting a new coat of paint on an old piece of junk. We’ve seen them all before.

Last week I saw everyone’s old favorite again. A guy from California calls you, asks you where you want him to deliver the 55 gal drum of degreaser you ordered, and he will be happy to send the invoice along your free gift for the office – a brand new coffee pot. OK, right.

At our place, we’re already seeing invoices for services and products never delivered to our jobsites. When we challenge them, we’re simply told that it was a mistake. They put the wrong name on the invoice. It’s actually someone else’s invoice, so just send it back please. This brings to mind experiences from 1981 when companies without an office (just a post office box), a staff, or a product sent out one bogus invoice after another. When the first one hit, the operator gave the “poor dumb soul” the benefit of the doubt and sent the invoice back after a suitable apology and a sincere promise that it wouldn’t happen again. Then, three weeks later, another invoice from the same outfit arrived.

How many people paid the $150 invoice just to get it out of the way. We were way too busy to bother with a tiny little invoice like that – all 2,783 of us. Lots of scammers got rich in the last boom just by writing and sending out invoices. Fortunately, through the good efforts of a county sheriff in West Texas, at least one of them spent a few years in the joint. Couldn’t have happened to a nicer guy!

New scams are popping up like toadstools after an overnight rain on a cattle feedlot. Now, the crooks use the Internet and all sorts of data gathering techniques to get the particulars on an operator and his drilling projects. They sometimes can crack the purchase order “code” and send a legitimate-looking invoice complete with a superintendent’s signature.

One thing is for sure, whenever activity increases to a fever pitch in any industry, the scammers are not far behind. They are crafty rascals. Any system the operator puts in place to stop them can be defeated eventually. The best solution: good communication between the field and accounts payable.

To repeat what the online scam busters tell us, if it looks too good to be true, it probably is. Many are the deals that are just too good to pass up. Old Ned has 200 bits he wants to sell at half-price. If you buy them today, he will let you have them all for 40% of new price. They’re all in original boxes ready to go. Well, if Old Ned really has that many bits in this market and he hasn’t already sold them, chances are they either aren’t new, they aren’t his or they aren’t any good. One of my old bosses told me once that a fast deal is a bad deal. So far, he’s been right every time.

Compassion. Finally it’s a season for sharing. Simply put, it’s a time to give up part of what we have for those folks less fortunate than ourselves. That’s what happened after Hurricane Katrina this year. It’s what happened after the tsunami in the Indian Ocean last year. It’s what we humans do. Greed is an insidious disease, a cancer that eats away at the soul. We really should be generous, especially now when we can afford to be benevolent.

Have a wonderful holiday season this year. Don’t eat too many cookies. Keep the dope brush out of the mud. 

Les Skinner, a Houston-based consultant and a chemical engineering graduate from Texas Tech University, has 32 years’ of experience in drilling and well control with major and independent operators and well-control companies.