Dec. 2000 Vol. 221 No. 12  Drilling

Robert E. Snyder,  Editor

Optimizing deepwater rig use; new records

Janice Rudd, senior consultant and industry analyst for OneOffshore, presented a white paper at the recent Deep Offshore Technology Conference and Exhibition in New Orleans. In the paper, "Deepwater reality, ultra-deep potential: How equipment markets can intervene," Rudd states that the cause of the predicted shortage of ultra-deepwater (UD) rigs in 2001 is not a lack of UD rigs, but utilization inefficiencies that can be overcome by fleet optimization. However, based on historical success rates and trends, appraisal / development drilling on discoveries and new exploratory wells could push demand beyond the capacity of even an optimized UD fleet after 2001.

"Today, 12 of the 35 working UD rigs are drilling in less than 4,000-ft water, and that includes five rigs in mid-water, i.e., 2,000 ft or shallower," Rudd said. "It is human nature to want anything to be the newest, and many new rigs operate more efficiently. However, in a tight market, under-utilizing a UD rig causes a promising ultra-deepwater prospect to go undrilled."

Fleet optimization requires operators with long-term contracts on UD rigs to swap or sublet time on deepwater rigs, when less-capable units can fulfill their requirements. Rig swaps between geographic markets can also increase effective supply by avoiding mobilizations.

Rudd said the largest impediment to this solution is the lack of transparency that would lead to a liquid secondary market. "Deepwater desperately needs an efficient secondary market where available sublets can be filled and swaps can be arranged."

When an optimized fleet can no longer meet UD demand, fleet additions must be made. Analysis would lead to the conclusion that upgrades / conversions are more likely at the beginning of this cycle because: 1) they generally have smaller price tags and faster deliveries; 2) there are upgrade candidates that are currently idle; 3) several contractor managements have a preference for upgrades / conversions; and 4) balance sheets and bad experiences during the last cycle may keep some contractors on the sidelines for some time.

Setting new records. The Minerals Management Service (MMS) has announced that a new record for deepwater drilling in U.S. waters has been set. BHP Petroleum started drilling an exploratory well in 8,835-ft water in the Gulf in October, on Walker Ridge Block 425. This depth surpasses the earlier record set by Marathon in 7,997-ft water in February 1999 on Walker Ridge 165. The BHP well is the second deepest in the world, surpassed only by one drilled off Brazil in 9,111-ft water.

According to MMS, current deepwater drilling activity has reached other new records. In July, a record 34 wells were being drilling in deep water, i.e., >1,000 ft, in the Gulf, up from the previous record of 33 in August 1999. But in October even the new record was broken when 36 deepwater wells were being drilled. MMS also noted that three wells were being drilled simultaneously in 7,000 or more feet of water, including Shell on Alaminos Canyon 557 (7,790 ft), and Unocal on Walker Ridge 678 (7,044 ft), plus the BHP well.

Also in the U.S. Gulf, Delmar Systems, Inc., Shell E&P and R&B Falcon’s Deepwater Nautilus set a world record depth for moored vessels. The newbuild semi was moored in 7,790-ft water using a Delmar suction anchor system and single-vessel installation procedure. The deepest anchor was in 8,400-ft water. The installation was accomplished using Edison Chouest Offshore’s AHTS Gary Chouest.

But not all records are being set in the U.S. Gulf. Eni, through its Agip Division, and Schlumberger Directional Drilling Services announced the successful drilling of the world’s deepest horizontal oil well in the Villafortuna-Trecate field in Italy. The drilling was completed in October after a final bit run reached 21,066 ft TD at an angle of 89.6°. The horizontal drain extended for 600 ft, with inclinations varying from 85° to 90°. The vertical depth of 19,888 ft is a new world record for a completed horizontal well. Schlumberger says the well represented a significant challenge for its latest technology, and success was achieved thanks to close cooperation between Eni and its Technology Centers.

Horizontal drilling in Western Canada. Horizontal drilling and the long-term sustainability of the Canadian oil and gas industry was the focus of the exhibition on horizontal well technology held in Calgary, Nov. 6 – 8. The conference organizer, dwg world media, calls horizontal drilling (HD) an enhanced recovery technique, a means of lowering development costs in mature fields and an exploration tool all rolled into one.

Horizontal wells typically produce up to ten times more oil than comparable vertical holes, the organizer claims. In that sense, HD in the most important development in oil well drilling since rotary drilling rig supplanted cable tools at the turn of the century. More than 10,000 horizontal wells have been drilled in a variety of geological settings in Western Canada’s sedimentary basin since the start of the 1990s, and the pace continues to rocket higher along with oil prices. According to Nickle’s Daily Oil Bulletin, 883 horizontal wells were drilled across Canada to the end of June this year, nearly triple last year’s 281, and slightly ahead of 1997’s record-setting 844. Estimates from the Canadian Association of Oilwell Drilling Contractors project 1,750 horizontal wells to be drilled in 2000, a 200% increase over last year.

A specialized form of HD, steam-assisted gravity drainage (SAGD) has increased the amount of oil recoverable from Alberta’s oil sands to a staggering reserve that challenges even OPEC. Pioneered in Alberta, SAGD has been proven to recover more than 60% of original oil in place. Petro-Canada said recently that it intends to increase production from its MacKay River in situ oil sand development by more than 33% using SAGD – to 30,000 bpd from an original estimate of 22,000 bpd.

The exhibition was held in conjunction with the 4th International Conference on Horizontal Well Technology sponsored by the Petroleum Society; Canadian Institute of Mining, Metallurgy & Petroleum; and the Canadian Section of SPE.