SPE/IADC 140231

Abstract

Failure Mode Effects and Criticality Analysis (FMECA) is a very powerful tool used in high risk businesses to deliver reliability. This is a known methodology applied in aerospace, nuclear and Dynamic Positioning (DP) systems that can be translated to drilling and completion operations.

Commissioning is the transition process between construction and operation that is widely used in process plants – from onshore chemicals to offshore production installations. It is a known methodology to ensure start up and operation meet specifications.

The drilling business has applied these tools to a very limited extent. When FMECA is used it is typically applied to a single component (i.e. drawworks) not the entire rig or system. Commissioning also tends to be done at the major component level rather than as an integrated facility. As the integration of systems in the drilling process grows these tools become very pertinent to reducing risk especially as wells become more complex and costly. They are the foundation of reliability for Automated Drilling Systems. Without applying tools that can deliver reliability in a manner that is cost effective a lot of value will be lost through unnecessary downtime and failures.

Participants at the SPE Emerging Technologies Workshop May 2009 and the SPE Drilling Automation Workshop April 2010 observed that they had limited knowledge of FMECA; however, after familiarization they concluded that this is a powerful tool that must be used to establish reliability of technologies and systems. The latter workshop concluded that the industry must focus on the application of FMECA and create standards for commissioning.

This paper has been created through a team of experts compiling their knowledge and guidance to provide a knowledge base for the industry to utilize for the benefit of increased reliability and reduced risk.

These two tools, properly and efficiently applied will bring immense value to the industry in terms of reliability. Specifically their application to the control and automation of the drilling process will provide the basis for successful growth of this technology application. Without correct application of these tools, growth of technologies and automated systems in drilling will be inhibited by unacceptable levels of reliability.

IADC/SPE 128716

Description

A Well Delivery Process defines a set of activities along a time line to plan, execute and close out a well. The most advanced versions of this process include tools and techniques that create robust plans including risk and uncertainty management, technical limit focus and stretch goals, probabilistic time and cost estimating, detailed scheduling, Drill / Complete the Well on Paper and similar group exercises. Stage gates are included that provide review points which are usually matched to a corporate Capital Value or Opportunity Realization Process. The most advanced form of the process incorporates best practices from Lean Manufacturing. The paper describes best practices in the development of a Well Delivery Process.

Application

The Well Delivery Process applies to all wells in a scalable format whereby a longer term, more detailed process is used for Exploration Wells and a simpler, shorter duration process for repeatable development wells. It covers work processes between departments, especially subsurface and drilling, and between the suppliers and the oil company, as well as between suppliers. An actively maintained Well Delivery Process provides the means to capture lessons learned and to retain knowledge within a company.

Results, Observations, Conclusions

In a West African offshore operation in a marginal field development with complex wells, the application of a Well Delivery Process resulted in best in class performance in an industry benchmark survey (Rushmore Review). This included a 77% reduction in non productive time. Added value was achieved through increasing the typical well productivity by more than 33%.

In the N Sea, a horizontal well drilled from a semi sub achieved an overall drill rate of 171 m / day versus a historic average of 80 m / day. Well cost was reduced by 30%.

A N Sea operator improved from 3rd quartile to 1st quartile performance while another improved overall drilling performance by more than 30%.

Reviews of drilling performance in two different regions demonstrated the correlation with poorer performance when there was insufficient lead time for proper planning according to the Well Delivery Process due to late and frequent drilling sequence changes.

Lessons learned are described including the correlation of performance with robust risk assessment

Recommendations on the key characteristics for a successful Well Delivery Process are described.

Significance of Subject Matter

A best practice and robust Well Delivery Process is essential for high cost drilling operations and challenging drilling environments whether exploration wells or infill drilling in depleted reservoirs to small hydrocarbon accumulations. This paper will provide an essential guide to Drilling Managers wishing to develop a Well Delivery Process.

The paper also introduces Business Process distinctions for different types of wells from project based exploration through Factory Drilling which impact the application of a Well Delivery Process.

SPE 97269

Risk management, risk analysis, and uncertainty analysis are still-growing trends in cost and schedule estimating. Engineers and managers alike have been lead to believe that correct application of best practices will ensure that operations achieve their objectives on time and within budget.

Unfortunately, a number of misapplications, misunderstandings, and mistakes have threatened to endanger the continued useful growth of this trend. Insufficient tools and / or incorrect use of the available tools have allowed creation of a false sense of security which is shattered by loss of objectives and time / cost overruns. It is very important that the industry understands and chooses the correct applications, and has realistic expectations.

This paper presents best practices for applying risk management, risk analysis and uncertainty analysis to capital expenditure cost and schedule estimates. In addition to outlining our recommended process, we highlight current misapplications that, in our opinion, are potential barriers to the continued growth of this valuable management tool.

SPE 87117

Benchmarked results on well construction projects show that many projects incurred significant cost over runs. Half of the mega projects since 1993 have been disasters resulting in a destruction of capital for oil companies. Insufficient drilling front-end loading and inadequate team organization have been identified as preventable causes of these over runs.

Deepwater projects involve multiple challenges of new technology, geological uncertainty and, often, a fast track approach. The wells' portion of the total project cost often exceeds 50%. The huge price for intervention activities later in the life of these wells requires that the initial completion remain in place and function as planned for a long time.

Predictable and distinctive drilling and completion performance is a must for the high cost projects that typify deepwater.

This paper will describe a methodology that has been successfully applied with repeatable best in class results in the North Sea and Gulf of Mexico. This methodology addresses the need that teams are organized to fit the project (not the other way around) and that systems integration is treated as a high priority. The results typically achieved with this methodology are in the range 20 - 23 days per 10,000 ft - best in class in both regions and 35% better than the average drilling time - with commensurate improvements in production and data acquisition. Short case histories of deepwater exploration and development wells are described - including a horizontal development well.

The paper describes:

- how the projects were organized,

- how the teams were aligned to their objective and goals,

- the processes that support these successful teams,

- how the teams were motivated to perform,

- how web based support can function to create co-location through the virtual world.

The paper also contrasts this methodology with traditional operations.

The old adage, "you get what you pay for," applies to contract services in the oil and gas business. From the 1970's finance and procurement departments have driven the process to select and contract services. Through their lack of understanding of value, they have focussed organizations on contract prices. Basically - regardless of the hype surrounding the information gathering process on safety, quality, technology and the like - contracts usually are awarded on a price basis. Low bid wins the work.

What oil companies really want is often different from what they measure and what they ask for. Oil companies must recognize what the values of their businesses are for them, relate these to their operations, procurement and financial staff, and then design contracting practices and measurement methods to meet these goals. Rational thinking and the right expertise can develop a contracting strategy WHERE oil companies can get what they need. an industry forecast is made at the end of this article.

Crude oil prices have taken a violent ride on the commodity exchange roller coaster, plunging from the $20/bbl range to $10 then rising again, up beyond $20. This volatility is unlikely to disappear, as traders play their perceptions of supply / demand imbalances. Aggressive oil companies are now planning their futures on being profitable at potentially low oil prices, as low as $11/bbl. This means that they will demand low finding and producing costs.

Oil companies will need to meet a string of demands, if they are to be competitive in an aggressive environment. These demands include predictable costs, lower costs than competitors, excellent results from operations, short cycle times and a reduction in unused overhead. These can, and indeed have, all been achieved through understanding the business needs, applying the correct performance measurements, breaking down boundaries between organizations and breaking through performance barriers.

IADC / SPE 59203

When depletion strategies for BP Amoco's Valhall field on Norway's continental shelf required the drilling of extended reach drilling (ERD) wells, problems appeared which threatened the project economics. Average trouble costs approached 35% and occasionally exceeded 50%, while some wells failed to reach their objectives and the projects were not completed. Sound principles for aligning the operator/supplier team were applied to a very challenging ERD well following successful applications on exploration wells in Norway and development wells in other areas. Starting with a slot recovery that historically took 29 days being completed in 18, the well concluded 31 days (30%) ahead of past performance. It is clear that re-organization of a select group of operating and service company candidates into an aligned team made the difference. This paper will describe the challenge, the transformation and the result.

Major oil company E&P managers typically have not been held accountable for meeting performance and cost targets to the same degree as either contractors to these managers or other industries. In today's highly competitive world, there is no room for complacency with performance. As many companies are just beginning to discern, noncompetitive performance in a volatile and low oil price environment leads to corporate failure.

True performance must be achieved in the oil industry. Consolidation, yielding improved economic and operational performance, is likely to occur in reaction to low oil prices. New entrants to the industry could rapidly emerge if the current players do not wake up.

SPE / IADC 52774

The traditional method of establishing relationships between customers and suppliers in the drilling business is very inefficient and wastes money through consuming resources without adding value. Some new processes have been introduced but low bid is still often the primary determinate of success. These are reviewed, the issues still to be addressed identified and solutions discussed. Two avenues of improvement are described: 1) suppliers evaluating their opportunity and declining WHERE appropriate; 2) customers removing cumbersome systems from the past and using new, more intelligent and efficient methods for selecting suppliers.

Concern is growing in the oilfield that alliances are not doing as well as they should be. Have they been adopted as a panacea without sufficient understanding of what they are or how to implement them? That question is answered in five sections. A changing industry - two key trend drivers; entering a new era of organizing and managing systems. Types of contracts - alliances versus fixed and incentive contracts; limitations of discounting. Oilfield alliances - new solutions are needed to improve the system. Change / commitment - how changes are being implemented by the innovators; how many really support it. Alliances take effort and time - why it isn't easy to do it right.

Alliances have been variously described as the panacea for our industry to the flavor of the month. What are they, can they be of benefit and how are they being applied? Evidence from other industries clearly shows that alliances create a more profitable environment for customers and suppliers. This same evidence shows that the path to this transformation is not straightforward, but strewn with misdirection, blind alleys and other diversions. The issues affecting change in our industry are discussed.

The realities of the nineties revolve around declining oil prices, rising production costs and evolution of project economic value metrics. A traditional industry cycle of change in hostile times has been followed but will not be completed due to the evolution of a new industrial era. The route to growth is illuminated.

the history of strategic developments for alliances is discussed and answers to the key questions raised are given. the concepts of lean drilling- are introduced and the need and difficulty of creating the necessary interdependencies is discussed.

Reprinted in the Journal Of Petroleum Technology, February 1995

Significant improvements in profitability can be achieved by applying the key principles of lean manufacturing to the drilling and production industry. These principles provide the framework for successfully applying the practices of alliances and partnerships. This paper provides the insight for adopting these principles through an analogy of lean manufacturing and well construction.

modified and reprinted in the drilling contractor magazine, may 1994

dayrate contracts have been the normal mode for drilling operations for a long time. the environment is well known and therefore comfortable to the participants. the operator retains control over all aspects of the operations; essentially the operator leases men and equipment. turnkey contracts have been regularly utilized in the usa and have been used to a limited extent internationally. In their simplest and purest form they provide an understandable and usually clear assignment of responsibility to the contractor. dayrate contracts provide little incentive to perform, are professionally unrewarding to contractors' personnel and presently do not offer a profitable return on investment in most sectors. turnkey contracts, by contrast, provide a significant incentive to perform, are professionally rewarding to contractors' staff and can provide an environment whereby the contractor achieves a more profitable return on investment whilst the operator reduces well costs. Unfortunately, the application of the non variable turnkey contracts used today has been limited due to their inability to handle uncertainties and a reluctance of the industry to adopt this form of contracting. As a result a significant movement has arisen towards contracts which fall between the well-known dayrate situation and the non variable turnkey. This is the twilight zone - an ill-defined region of major contrasts in control, responsibility, accountability and price. A region which requires thought and development to provide the mechanisms for successful contracts. A region through which the way forward to more meaningful contracting is being developed. The structure and orientation for contracting drilling operations in the twilight zone is developed in this paper.

New contractual mechanisms were developed to meet the challenges raised by the "Drilling in the Nineties" initiatives which were introduced to the industry in early 1990. This paper described the strategy for integrating services, the application of "Designated Subcontracts", the application of business process models, the development of incentive payment mechanisms and the techniques for creating co-operative customer - supplier relationships.

Drilling in the Nineties was an initiative introduced to reduce well costs and improve the efficiency of drilling operations. The desire to increase operator efficiency lead a change from supervising the contractor to managing the contract. This paper discusses the implementation of this change and reviews the construction and content of a new contract document format selected to support this implementation. The review covers a range of items including liabilities, obligations, scope of work, specifications and equipment requirements. The application of this new format to incentive and turnkey drilling operations is described together with the implications on operator / contractor roles in the execution of these types of contracts.

Landmark paper that introduced the change from random error model to systematic error model for borehole surveys. This model became the standard for the industry.