Drilling advances

	Vol. 224 No. 7
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

Drilling riser separation. Transocean Inc. announced on May 23 that the drilling riser had separated on its deepwater drillship Discoverer Enterprise, and the rig had temporarily suspended drilling operations for BP on Well MC 822, No. 6 on the BP-operated Thunder Horse field in Mississippi Canyon Block 822, in 6,000-ft water. No injuries occurred and no hydrocarbons were released as a result of the incident. A visual inspection of the wellhead with an ROV showed no wellhead damage. And the company believed that the rig could resume operations “within two to three weeks,” pending completion of repairs and results of an investigation into the cause of the incident. 

In the first week of June, the suspended portion of the riser had been pulled, but the lower marine riser package and the remainder of the riser was still on the seafloor. BP said it would have to assess any damage to the LMRP and the well and the cause of the incident, to schedule further activities. Hopefully, the rig will be back in action well before you read this.

Intelligent drill pipe tested. As the Rocky Mountain Oilfield Testing Center (RMOTC) notes in its Spring 2003 Project Update, a joint venture between Grant Prideco of Houston, and Novatek Engineering of Provo, Utah, resulted in testing of an innovative smart drilling system by RMOTC in February. The new, patented system, called Intellipipe, provides drilling crews with real-time downhole data at one million bits per second. The key is a unique non-contacting coupler embedded in the drill pipe connections, which allows data to be transmitted across the pipe connections. A high-speed cable along the inner pipe wall connects to each coupler. 

The primary objective was to test the communication system under typical drilling conditions. The first phase focused on the communication system along the entire length of the drill pipe, in a cased-hole environment, down to 3,054 ft. Electrical signals were transmitted down the pipe and returned by repeaters placed strategically along the length of the drillstring. This procedure allowed for “fine-tuning” of the system to optimize repeater placement. The second phase was accomplished by setting cement plugs in the openhole portion of the wellbore, then drilling through them under typical drilling conditions, from 3,054 ft to 4,500 ft. 

Novatek and Grant Prideco were pleased with the performance of their revolutionary drillstring during this week-long field test. The communication system operated according to established test criteria and demonstrated that no special handling or make-up procedures were required for system installation. For more information on this test, RMOTC says please contact Ralph Schulte, Project Engineer at: Tel. 307 261 5024, or email: Ralph.schulte@rmotc.doe.gov.

Drilling on Sale 181 leases. Two operators announced plans to move into acreage acquired in 2002’s Eastern Gulf of Mexico Lease Sale 181. Shell Exploration & Production Co. confirmed it will use Transocean’s semi Deepwater Nautilus on the first well to be drilled on Shell’s acreage in the Eastern Gulf of Mexico planning area. The rig was to spud a wildcat in late May on Desoto Canyon Block 269 in 7,500-ft water. The operator was awarded the block, along with 27 others in the Eastern Gulf, in last year’s sale. The rig is under contract with Shell until May 2005, and is currently on location for the operator in Mississippi Canyon Block 762. 

Another operator, Petrobras America is shooting seismic over acreage it acquired in Sale 181 in December 2001. The company could begin drilling in the region next year. It placed high bids on four blocks, Desoto Canyon Block 530, and Lloyd Ridge Blocks 45, 46 and 48. Water depths range from 7,870 ft to more than 9,000 ft. 

Upward gas market pressure. The Natural Gas Supply Association (NGSA), in late May, released its Summer Outlook outlining its views for this summer’s natural gas market conditions. “While no one can accurately predict the price of gas in a competitive wellhead market, NGSA expects upward pressure on gas prices this summer season. While the gas resource base exists, ongoing constraints burden its extraction,” NGSA said. 

The publication summarizes market fundamentals that govern trends in gas prices. NGSA reviewed five key factors: weather, economy, demand, storage and supply, that can impact the market. It also reviewed unknown factors, or wildcards. The analysis reveals that the warm weather, increased need for storage and flat production will put upward pressure on the gas market this winter. The weather is the largest single factor; it is also the most difficult to predict. According to the National Oceanographic and Atmospheric Administration (NOAA), this summer will likely be warmer than normal and put an upward price pressure on gas. 

The economy continues to struggle. However, expectations are that conditions will improve over the summer and fall, now that consumer confidence is recovering. Thus, the economy will likely put flat pressure on gas prices. 

One of the greatest demands for gas in the summer comes from the electric sector, where consumption levels peak at this time. The combined effect of four factors – weather, economic growth, hydroelectric generation and the “efficiency effect” – will likely lead to a level of demand similar to last summer, which means flat pressure on prices. “We are entering the summer season with storage levels at record lows,” said NGSA. “To provide a sufficient amount of gas for the upcoming winter, significant injections into storage facilities will be required.” This means the demand to replace storage will compete with summer demand in other sectors, and will put upward pressure on gas prices. 

Producers are working around the clock to respond to these prices. The rig count is up 44% since April 2002, and increased production will help relieve some of the price pressure in the current market’s tight balance between supply and demand. However, planning for the future supply of gas must include all supply options available, including LNG, access to new lands and gas from Alaska and Canada. As a result of the tight balance between supply and demand in the natural gas market, NGSA says current price levels are expected to continue throughout the summer season and reach their peak when the weather is the hottest.