Intelligent well completions

What is the purpose behind technology?

Is Non Productive Time really the right metric?

 Randy Kubota, ChevronTexaco, Houston

Drilling technology can be developed in various ways. Deploying new technology is difficult, with some examples being perceived as poorly achieved. These include, intelligent well completion, multilateral wells and dual-gradient drilling. Metrics that drive behaviors are Non-Productive Time (NPT) and production, i.e., barrels per day or MMcf. The three technologies discussed in this article are: knowledge, software and equipment.

INTRODUCTION

Some in the industry have stated that the drilling industry takes 35 years to develop and deploy technology. I do not believe that statement. One principle that the drilling industry has delivered and deployed technology on is from the quote that “Necessity is the root cause of inventions.” I believe that the drilling industry has had tremendous success in developing and deploying technology in the form of intelligence and knowledge. This technology is very difficult to measure but is easy to observe. One example is the trend of drilling into increasingly deeper water depths each year (see figure). Five years ago, most in the industry did not believe that drilling would occur in 10,000 ft of water. This happened in 2005.

Another example is the basic understanding of physics and rock mechanics. We have demonstrated the ability of earth scientists, petroleum and mechanical engineers to work together to see the same problem from different perspectives. As a result, the industry understanding of rock mechanics has been significantly developed. As an industry, we can demonstrate this intelligence in two examples.

One example was shown at the 2005 SPE – IADC conference in Amsterdam, where we heard a presentation from ChevronTexaco’s Bill Calhoun and Hector Caicedo on the ROP prediction tool. This understanding of the principles of confined stress has resulted in the ability to model and predict the ROP in well planning. Another example is the ability to understand, model and start to predict – in terms of rock mechanics – the effect of salt canopy in deepwater GOM wells. This ability has resulted in better well planning and reduction of drilling problems.

Drilling and production trend toward increasing water depths for ChevronTexaco. Courtesy of ChevronTexaco.

The area of technology development and deployment occurs in software application. As our understanding of physics and relationships of the earth model and drilling tools grows, we update software programs that we use daily. Most of the time, when software is updated, we are not really aware of the update and do not hesitant to use the software. As software is being updated, engineers and programmers have the opportunity to compare the update with current model. As they are working the updates they compare results and outputs from the two computer models. We are all very familiar with this from the use of Microsoft systems which we commonly use as an operating system on our computers.

The harder task is deploying new technology. This requires a significant investment, potentially placing drilling performance – production volumes and costs at risk. It also requires excellent teamwork between the design engineers, manufacturing, and the field personnel. Industry benchmarking has demonstrated that, successful deployment of equipment requires adherence to the steps of:

• Development in a proof-of-concept phase
• Prototype trial, pilot testing
• Proper selection of field for deployment.

Additionally, “ownership” of the deployment must move from the designers – engineers to field supervisors, who will deploy the equipment. Traditionally, when one step is skipped or not properly completed, the technology deployment schedules slip and the risk of failures increases. Ownership is another dimension we must plan for. If the rig supervisor does not understand and believe in the equipment, than the probability of successful field trial is less than 50%. The proper deployment of equipment requires field personnel to get involved early in the design. Once proof of the concept has been completed, of input and “buy-in” to the design can begin. 

METRICS

Will the industry metrics change the focus of the key metric in the next two years? Currently and in the past, the focus was on Non-Productive Time (NPT). I ask this question due to the 2004 industry reserves – production ratio. An example might be where the drilling group drilled through reservoir and for lack of care and understanding, the hole had washed out, and occurrences and quality of reservoir data was not optimized. The ultimate impact is difficult in moving the reserve classification from P6 to P2. The end result might be required to drill delineation wells to reduce uncertainty. In the future, NPT will become a subset of the barrel metric.

NPT has been a favorite metric for the drilling industry for a very good reason. Most of the industry benchmarking studies demonstrated that 15% – 20% of the total drilling time, as NPT, was not in the successful-event well planning. My concern is that if contractors and drilling groups focus on reducing NPT, the behavior that might be developed and implemented could drive away from the actual value. The value in wells is to drill wells as safe, fast, and inexpensive as possible while maximizing the data – production from the wellbore. If one focused on reducing NPT, the reduction in trade off might be the reduction in NPT percentage while increasing well cost or not maximizing the production or data collected from the well. The opportunity for deploying technology to capture the value was lost due to the focus on NPT.

NPT can be reduced by: 1) minimizing the shale problems on wells, resulting in lost circulation and stacking pipe, and 2) better communication within the oil company. The service industry and contractors also bear a percentage of the problem, concerning tool reliability and QA/QC of manufacturing and serving tools. Tool failures still occur on a regular basis from companies that are ISO14000 certified and have six sigma processes. We, as an industry, should question the company certification, if quality of tools is the root cause of NPT. As we work in deepwater opportunities and see the total operating day rate of drilling operations near $500,000/day and well costs ranging between $80 and $100 million, the standard should be “Failure is not an option.” Our behavior must change. Oil companies will need to take a more proactive role in the QA/QC in manufacturing tools, or service companies will have to significantly increase the cost of service, if the expectation is for such costs to bear the price of NPT.

TECHNOLOGY DEPLOYMENTS

Completion will become a bigger focus with subsea and deepwater. The cost to complete operation is close to or exceeds the cost of drilling wells. When oil companies consider the completion cost plus the cost of well services and lost production for completion failure, the focus on QA/QC will significantly increase in the future. Most drilling rig designs have been well thought out for maximizing drilling operations. The concept of how to run six to ten control lines and cables to the completion tubing was not well thought out. The equipment layout and rig design have not been optimized to reduce risk damage and faults in the running of such equipment.

Are intelligent well completions a technology that was poorly accepted by the industry? This might be true, but when one studies the “spin-offs” from this technology that are now being rapidly adopted in the industry today, it is a true success, and should be recognized as such.

Multilateral technology has been developed and proven since the mid-1990s. The uptake of this technology has not been as great as predicted. The concept of the technology is a given: more reservoir formation exposed to the wellbore. There are numerous reasons why this technology has been under-exploited. One reason is the perception of the associated “risk” in deploying this technology. For some areas of the world, this is still a new technology risk, and the operator might be burdened with a 30% – 40% cost increase that reflects the risk. This perception can be viewed as “not invented here,” when, in actuality, there have been fields successfully developed with the use of this technology.

Several years ago, the drilling conferences were populated with papers and discussions on dual gradient drilling. Various companies made a financial investment into the development of this technology except one major oil company. ChevronTexaco deployed the technology as well. The well that deployed this technology proved that the technology worked as designed, but the uptake by the industry has still not occurred. The interesting fact is that, there has not been a “spin-off” of this technology, even though various equipment was proven to operate as designed. There are numerous reasons for the lack of deployment and acceptance by the industry. One major reason is equipment cost, at about $35 – $40 million. This, combined with the perceived limited niche market of the deepwater GOM, has contributed to the lack of industry acceptance.

CONCLUSION

Where is the industry headed with technology and successful deployment? My view is that, to develop technology efficiently and effectively, the industry needs to focus on technology collaboration and challenges, using established and proven groups such as DeepStar for developing technology.

Joint Venture developments will be between two to three oil companies and one service company. This will be for “niche” equipment development for a limited market. Oil companies will pay for the development and guarantee a deployment of technology. The service company will provide engineering, manufacturing and service – support for this technology.

The industry will keep NPT as a metric and measure of performance, but the major driver will be barrels, not NPT.

The focus in subsea and deepwater completions will change the focus of offshore drilling industry. There will be more focus on well completions, particularly intelligent completions, and successful, highly reliable running of completions by oil companies in the future.