Overview
Geological studies and seismic surveys can point the way to a hydrocarbon prospect. But there is only one way to know if that prospect contains oil or gas, and that is to drill a well. Drilling projects are team undertakings. They encompass a wide range of disciplines and job functions, from geology, geophysics and engineering to operations, support and logistics, safety and regulatory compliance, management and administration. Project teams are often part of alliances that include:
The oil or gas company (also known as the operating company or operator), along with any joint venture partners having an interest in the well; An outside drilling contractor who provides the drilling rig and the personnel to run it; and One or more service companies that provide specialized equipment and expertise at various stages of the project. The largest of these service companies may offer integrated project management services that include contract drilling.
The working relationships that characterize a drilling project depend on the well's location, the arrangements between the companies involved in the project and the number of personnel involved. A small onshore rig may be crewed by no more than five contractor employees and managed by just one or two contractor and operator representatives, while some large offshore drilling operations may have several rig crews and groups of specialists totaling 50 or more persons, along with dozens of land-based technical and support personnel.
Drilling Objectives
However they might differ in other respects, all drilling operations have three basic objectives: 1. Drill safely. Health, safety and environmental (HSE) considerations supersede all other goals, even if they require changing plans, delaying operations or incurring extra costs. 2. Provide a fit-for-use well. Whether it is drilled for exploration, prospect appraisal or field development, a well must meet the needs that led to it being proposed in the first place. As a minimum standard, it should be drilled without
damaging the borehole or any potential producing formations, and it should satisfy the design requirements for formation testing, data gathering, oil and gas production or other post-drilling activities. 3. Minimize overall well cost. It is therefore in everyone's interest to control well costs. In this context, it is important to consider the total cost over the life of the well, and to balance this cost against the first two objectives of safety and well usability. An offshore well in West Coast of Africa may cost up to 30 times higher than an average onshore well in the US. Since drilling is the most expensive component of the entire exploration and field development process, the oil&gas industry pays a lot of attention to improve drilling efficiency and cut drilling time in order to control well costs.
Surface and Subsurface Environments
Any area that produces oil or gasor has the potential for doing so in the futureis a likely location for a drilling rig. Rigs come in a variety of configurations and designs for surface environments that range from Arctic to desert, ocean to mid-continent and just about everything in between (Figure 1).
Figure 1: Drilling operations must adapt to a wide range of surface environments. These are just a few examples. While drilling rigs often work in remote locations, they may also be found in settled or even urban areas, as shown in Figure 2.
Figure 2: Rig operations in Los Angeles, California. The rig in the top photograph is working at the San Vicente Drill site near Beverly Hills the wall next to the rig is part of a shopping mall. The two rigs in the bottom photograph are being used to abandon old wells at the Farmer's Market Drill Site. If you look very closely, you can see a patch of white on the hill in the backgroundthis is the famous Hollywood sign, an L.A. landmark for many years (State of California, 2005). Most drilling rigs operate 24 hours per day, 7 days per week. Rig crews work 8 or 12hour shifts or tours (pronounced towers), in rotations that last anywhere from one to four weeks or more, depending on the location. The subsurface conditions that drilling crews encounter are as varied as their hours and work locations. The total depth (TD) of a well may be anywhere from a few hundred to
more than 20,000 feet. It may be possible to reach TD by drilling straight down, or it may be necessary--and sometimes beneficialto drill part of the well at an angle or even horizontally. Along the way, there might be any number of rock types, including loose gravel, soft, sticky clay or shale, abrasive sandstone, hard carbonates and even salt. Each rock type presents its own set of challenges. Subsurface pressures may range from a few hundred at the surface to 5000, 10,000 or even 20,000 pounds per square inch ("psi") at deeper depths. In some wells it is not always easy to predict the expected pressure level. Temperatures may likewise range from near-surface conditions to 400 F [200 C] or more. And there is often a good chance of encountering toxic or corrosive gases. Before drilling even begins, a project team has to plan what will happen after TD is reached whether it will be completed as a producing well or abandoned and how the well will fit into overall reservoir management objectives. These and other considerations will affect project planning, well design and drilling operations.
Rig Counts
When business analysts want to get a feel for the oil and gas industry, they often look at rig counts such as the ones published weekly and monthly by Baker Hughes (http://www.bakerhughes.com/investor/rig/). These provide current and historical data on the number of drilling rigs working in various parts of the world. This information is valuable because the drilling sector, being at the leading edge of oil and gas development activity, is particularly sensitive to such factors as oil price fluctuations and economic conditions of the industry (Figure 3).
Figure 3: Worldwide drilling rig count, 1980-2011 (YTD) (Baker-Hughes Inc.). Note the correlation between rig count and spot oil price (price data from BP Statistical Review of World Energy, 2011 and EIA). In January 2011, there were 2,180 rigs operating in different regions (Figure 4). More than half of them were busy drilling natural gas wells in the US and Canada (BakerHughes, 2011).
Figure 4: Worldwide drilling rig count by region (Baker-Hughes Inc., 2011). At the end of this module, under the heading Additional Resources, you will find a list of Web resources that will help you track rig activity and give you some useful general information about the drilling industry.
Drilling Technology
Virtually all oil and gas wells today are drilled using the rotary method, in which rock is broken into small particles or cuttings under the weight applied to a rotating drill bit (Figure 5).
Figure 5: Rotary Drill Bits: These and many other bit types are each designed for certain kinds of rock formations, and each has its ideal area of application. The bit is made up on (i.e., screwed into) the end of a drill string, which consists of individual lengths or joints of hollow steel pipe about 30 feet long (Figure 5). The drilling rig, acting as a type of hoist, lowers the pipe into the well. Each time the bit drills the equivalent of one pipe length, drilling is stopped while another joint of pipe is added to the stringa procedure is known as making a connection. In this way, the well is eventually drilled to TD. As the bit drills ahead, a specially formulated drilling fluid or mud is continually pumped or circulated from the surface, to the bottom of the well, and then back to surface to cool the bit and remove the cuttings (Figure 6).
Figure 6: Circulation of the drilling fluid from the mud pit to the mud pump, through the rotary hose, down the drill string, and up the annular space to the surface, where the cuttings are removed and the mud is treated and returned to the mud pit. Although rotary drilling techniques came into their own over a hundred years ago, the technologies used to apply them have evolved dramatically within the past decade. Formations that a few years ago would have been unreachable are now targeted almost routinely, and wells that once would have taken months to drill are completed in a matter of weeks at a fraction of the cost. We will identify some of these technologies as we proceed through this module.
Phases of Well Construction
Well drilling and completion involves a number of distinct project functions. Companies may differ as to who is primarily responsible for each function, and where one function ends and another begins, but one good breakdown would be as follows:
Well Planning
Well Design Drilling Operations Formation Evaluation and Testing Well Completion
Note: For simplicitys sake, this discussion and its accompanying Case Study examine the drilling and completion process as it relates to a single well. In reality, most projects particularly those relating to field developmentare based on drilling multiple wells, and project budgets, drilling contracts, regulatory requirements and so forth are developed in this "multi-well" context.
