Aug. 2001 Vol. 222 No. 8  Drilling

Robert E. Snyder,  Editor

Rig market slowdown, Faroe Islands well, equipment applications

The man who helped 39 crew members off the Marine Drilling Co. Rig 4 in the U.S. Gulf has not been found. Ben Freeman will be remembered by his friends as a hero. On July 13, the rig lost control of an exploratory well, and the gas blowout forced the evacuation. The rig was drilling for Applied Drilling Technology, Inc., a subsidiary of Global Marine Inc., on a William G. Helis well in Brazos Block 417, 20 mi south of Freeport, Texas. There was no fire. A second rig, the Marine 304 jackup was dispatched on July 15 to drill a relief well, and capping operations were planned.

First well offshore Faroe Islands. In mid-July, Transocean Sedco Forex’s Sovereign Explorer semi began drilling the first offshore well in the Faroe Islands, between Scotland and Iceland. The operator, Statoil ASA subsidiary, Statoil Faroyene A.S., is drilling the Longan well in License 003, 112 mi south of the capital, Torshavn, in the Foinaven sub-basin, in 3,087 ft of water. Following eight years of preparation for exploration, this well is an historic event for the islanders, most of whom subsist on fishing.

Transocean says one of the technical challenges will be drilling through layers of hard basalt, or old lava flows. The rig comes from the drilling of a dry hole off Ireland on Statoil’s Sarsfield prospect. It will begin work for an Amerada Hess subsidiary on a second Faroe Island well in September.

The offshore rig market peaks. Following the downward trend in U.S. natural gas prices, U.S. Gulf jackup softness is emerging, as reported in the July 16th Gulf of Mexico Newsletter. The drop is being seen primarily in the 250- and 300-ft independent leg, cantilever segment. Utilization in the 300-ft class is in the mid-80% range, down from the high-90% to 100% earlier this year. Utilization for the 250-ft units has dropped to the low-90% range. These two classes are the most numerous in the Gulf.

Overall, the Gulf rig fleet is experiencing downward pressure. The total number of contracted rigs fell to 178 in late July, giving an 84.9% utilization, the lowest in 10 months. Total jackup fleet utilization during the mid-May to late-July period fell from 92.3% to 87.5%.

The Newsletter speculates further that the world’s floater market is "at a crossroads." This market strengthened in May-July, particularly in the shallow end of the floater spectrum. However, it is coming under increasing scrutiny as observers ask: Have we reached a plateau? That question will be answered in the next three months, as 48 floating rigs, primarily 2nd-generation semis, reach the end of their contract. If many of these rigs have trouble finding work, drilling contractors could expect a disappointing close to 2001, the report speculates.

The number of 2nd-generation semis working increased steadily over the last 90 days. Currently, 58 of the world’s 73 units are under contract. But 29 of these will need new contracts in the next 90 days. Demand for 3rd-generation semis held steady from April into June, only to take a step back in July. Currently, 43 of the world’s 47 units are under contract and utilization is 91.5%. Utilization of 4th-generation semis returned to 100%, a level last attained in September and October of 2000. Four of the world’s 35 units will reach the end of their known commitments in the next 90 days.

The market for DP drillships has been steady since April. Just as then, 27 of the world’s 28 units are under contract and utilization is 96.4%. The last idle unit has been stacked cold since late 1998 and is reportedly for sale.

Thus, many signs indicate troubled waters ahead, particularly in the U.S. Gulf. Contractors, and to some extent operators, are hoping that market dynamics will sort themselves out in the third quarter. By the start of the fourth quarter, it will be obvious which road the market will take.

Completion equipment advances. BP recently installed the world’s first commercial Expandable Liner Hanger (ELH) system in a development well in Jim Hogg County, South Texas. Enventure Global Technology’s 9-5/8-in., 53.5 ppf by 7-5/8-in. expandable liner hanger / packer system was run in the 9-5/8-in. casing of the McLean Heirs 7, using 16.1 ppg oil-base mud. The ELH provided the hanging capacity for 3,578 ft of 7-5/8-in., 29.7-ppf liner and the sealing mechanism for the liner lap.

The liner hung below the expandable liner hanger / packer system was standard equipment – casing, connections and float. The liner hanger was cemented prior to the expansion of the hanger joint. Once run and expanded, the liner lap was pressure-tested to 1,900 psi for 30 min.

   Halliburton Energy Services recently completed the first small-diameter, 5-1/2-in. Retrievable Multilateral System (RMLS) in Canada. The TAML Level 4 RMLS window installation has the capability to optimize reservoir management, improve productivity and increase reservoir drainage, while reducing the number of wells.

The junction was created by cementing both the main and lateral wellbores. The 7-7/8-in. main bore was drilled to 4,107 ft MD, at 90.1°, where 5-1/2-in. production casing was set, with a slotted liner, an external casing packer, a stage tool and an RMLS window joint. The drilling whipstock was then positioned within the window joint, and the lateral was drilled to 4,061 ft MD, at 87.1° inclination. The lateral liner was run and stage cemented using the external casing packer and stage equipment, giving fullbore access to both main and lateral wellbores.

   Weatherford International, Inc. announced a world-record installation with its Alternative Borehole Liner (ABL) on a 44° deviated hole on the Fahud 335 well, for PDO in Oman. A total of 95 ft of ABL was installed at a 2,335-ft TD (covering a 65-ft shale interval), and at an angle of 44°, some 877 ft below the 9-5/8-in. casing shoe. After installing the ABL in a 12-1/4-in. underreamed section, the remaining 1,246 ft of the 8-1/2-in. hole was drilled to TD and the 7-in. liner was run through and cemented. This was Weatherford’s 65th Expandable Liner System installation.