Mike Sumrow
Drilling Editor
HOUSTON, Oct. 21 -- Industry-leading drilling performance goes beyond technology to the "people" factors of team integration, the work environment, a shared culture, and meaningful processes.
This is according to Unocal Corp., El Segundo, Calif., reflecting on the company's relentless focus on these factors and the systematic application of an eight-point "drilling excellence" philosophy (OGJ, May 6, 2002, p. 65).
The company says it will implement the philosophy at its operations worldwide, based on the outstanding drilling, safety, and environmental performance it achieved applying these tenets in Indonesia, Thailand, and the deepwater Gulf of Mexico.
In June, Unocal named Mike Sprawls as its drilling manager for the newly combined deepwater and US Gulf Coast region drilling departments.
The company merged the departments to capitalize on synergies and best practices developed in the deepwater exploration program and to become more project-oriented for Unocal's strategy shift to develop deeper horizons on the Gulf of Mexico shelf.
Sprawls said that with greater resources than are typically available for drilling operations on the shelf, Unocal geologists, geophysicists, engineers, and operations personnel developed unusually effective working relationships in the Gulf of Mexico deepwater-exploration environment.
He said everyone on the exploration team developed an understanding and appreciation for the issues and information that were important to the other disciplines.
GOM shelf operations
Fast-paced and frantic operations, dealing with partnering issues, capturing opportunities that arise with little notice, and executing projects in short time frames characterize typical Gulf of Mexico shelf drilling operations.
Noting that most operators experience this chaotic environment, Sprawls said Unocal recognizes the need to achieve a level of operational excellence and efficiency closer to what the company enjoys in deepwater exploration.
He said, "An outcome of a recent gulf region business unit reorganization is greater project focus."
From geologic models that start as numerical data in the deepwater exploration environment, Sprawls explained, the team of geologists, geophysicists, and engineers engages in discussions and work cooperatively to generate meaningful project procedures.
Sprawls said, "It has become a very efficient process for the company in deep water; however, because of the frantic nature of the business on the shelf, the opportunity to get to that level of cooperative effort and planning is somewhat limited."
With new, shallow Gulf of Mexico shelf wells adding gas reserves of less than 10 bcf/well, some people in the industry have described the environment as being on a treadmill.
Sprawls said, "There are many extraneous circumstances that dictate a way of doing business that are counter to the level of performance and excellence that we sought in the higher-stakes deepwater drilling environment.
"The company recognizes the value of a well-thought-out and well-planned project and the importance of translating that behavior into the gulf region's lower capital exposure environment," he added.
Deep-shelf plays
Unocal's initiative to become more project focused in the US gulf region stems from the company's change of strategy away from the shallow, lower-reserve plays, yielding 10-20 bcf, to deep-shelf plays that could yield 50-200 bcf, according to Sprawls.
Sprawls said, "A number of operators have begun to realize that fighting the rapid decline rates associated with the projects, having smaller reserves, is a losing battle."
Sprawls pointed out that most Gulf of Mexico shelf operators suffer from 45-50%/year production decline rates. The decline rates will continue for the companies that develop the low-reserve shelf wells.
Sprawls said, "You just don't make money that way. It doesn't turn the decline rate around, and in fact the decline continues to deteriorate. Over the years the industry has had to churn more and more of these projects."
He added, "The number of people required to develop the small projects gets out of hand. At some point you just have to say we can't keep doing this. We have to step back, take another look at where the opportunities are, and be the first to take them."
Pointing out that Unocal was one of the first to recognize the trend, he said the company has several deep-shelf opportunities to explore during the coming year. With the strategic move toward the deeper, higher-temperature, higher-pressure hostile environment comes the promise of the bigger prize.
He said, "I think the industry has generally defined deep-shelf drilling as 15,000 ft and deeper. Those are the wells that we're going after."
Assuming an equal ability of companies to find oil and gas reserves, Sprawls pointed out that the company that can drill wells at the lowest price will be the winner with the highest margin and profit.
Sprawls said, "That's what we hope to do from a driller's perspective. We have a role to play in delivering these wellbores at the lowest cost so that the business has the greatest chance of hitting the largest number of big plays, large reserves."
Sprawls believes other operators could be going through the same exercise and making the transition from the shallow to deep-shelf development, and to some extent, affecting the industry's drilling activity.
He said, "We have to step off this treadmill, spend some time understanding the deep shelf plays, and then put a program together to go after these things."
In the interim, drilling contractors are suffering, while operators try to build their portfolio of viable, deep-shelf prospects.
Project scope, management
The benefits of proper planning and execution apply to projects of all sizes.
With a focus on business-unit alignment, geared to larger projects, Sprawls highlighted the value of maintaining a project focus on even small items, such as concentric work, which includes coiled tubing and snubbing unit jobs.
Through their behaviors and through checks and balances in place, organizations can mitigate the risk of costly incidents such as sidetracks or missed targets. Sprawls pointed out that it applies to the way companies do business even down to the smallest things.
"The people and expense of properly planning and executing a project of any size is paid out many times over in the capital efficiency return of the project," he said.
Effective operator-contractor relationships depend on full disclosure of the expectations of both parties. Sprawls explained that Unocal, as accurately as possible, describes the requirements for accomplishing the project, with the very clear goal of achieving the best in class for performance and efficiency.
The company outlines its needs for people, services, products, and price. Sprawls says, "...and, quite frankly, in that order. These are most important to formalize an agreement with a contractor and go forward with a project."
He contends that attention to these needs—in the area of contractor management, which Unocal has put into place for deepwater operations—will yield huge dividends when applied to the US gulf region, deep-shelf drilling operations.
Team focus
The need for regular team meetings became apparent as Unocal executed deepwater projects.
Sprawls pointed out that the meetings allowed team members to discuss the well status, compare what they thought would happen with the actual outcome, examine where the company "missed the boat," and focus on future action plans.
The team concept is crucial in any exploration project that involves uncertainty, according to Sprawls, but the number of people operators would devote to projects would vary with the expected prize.
In a comparison of Gulf of Mexico deepwater and deep-shelf drilling prospects, the obvious difference is the amount of reserves. Operators might expect deepwater plays to yield more than 100 million boe, whereas a deep-shelf play could yield 50-200 bcf of natural gas reserves.
Even though staffing levels will vary with project size, operators cannot afford to invest $12 million in a well that fails to reach the target depth. Sprawls said, "There's a minimum level of geotechnical and engineering rigor that must go into a project plan."
Information exchange within the team environment will allow drilling engineers to explain what they think is important about the geology.
The geologists and geophysicists come to understand why the drillers need various pieces of information. Sprawls explains that they earn each other's trust and develop a meaningful relationship.
He explains that the more-hectic alternative is the "one-off, hit-and-run" relationship, in which engineers handle information exchange through e-mail or fill out forms that are "handed over the wall."
Sprawls said, "Unless people have conversations to add context around the data, they will not really have a full appreciation for what they're about to get into." Conversations lead to greater understanding, rather than the affected parties just gathering information from data reported on forms.
Innovation, creativity
Sprawls highlights the importance of leaving room in the company's operations for creative genius. He cites the example of the surface BOP stack operations that the company devised and perfected in Indonesia.
He notes, however, that the company must provide some structure to avoid the same mistakes in different locations and eroding the value of the creative genius. The district drilling engineer, a role model for Unocal's global drilling community and a new addition to the gulf region business unit, must ensure that the company applies best practices, he explains.
Better communication within teams and between engineers within the company ensures that frank conversations about successes, as well as jobs that were not a success, will improve drilling and workover operations, observes Sprawls.
He cautions against creating a climate where people become unduly fearful of failures. Sprawls says, "We don't want to get into a position where we try something, fail, and never go that way again."
He explains that if the company tries something and fails, the organization would discuss the issue openly and honestly to determine the factors that contributed to the problem, then find ways of fixing or resolving the problem.
"We try to be very open and candid about failures. Quite frankly, we have to expect some failures, if we're going to have the kind of progress necessary to stay at the head of the pack. If you don't have failures, you're probably not trying different things," he said.
Partnering effort
Sprawls explained that in the past, when the company adopted the asset-team concept, particular asset teams might have had drilling engineers assigned to their operations. The asset teams often viewed the drilling engineer and drilling department as a service organization.
"Like a short-order cook, it was a very frustrating way to work, and just wore me out," said Sprawls. Once the drilling program had been issued, there was little discussion until the rig had drilled the well to the pay zone."
Unocal backed away from that mode of operation in Asia and then completely, when the company began deepwater exploration in the Gulf of Mexico. Sprawls pointed out that the company developed an appreciation for the partnering effort that came from the experience.
He explained that everyone involved with the team developed an appreciation of the role that others played, had something to offer in the project execution themselves, and delivered with initiative to meet the project needs without having to be asked.
Mike Sprawls is drilling manager for Unocal Corp.'s combined deepwater and US Gulf of Mexico region drilling departments, based in Sugar Land, Tex.
Employment history
Sprawls joined Unocal in 1985. He has worked as a drilling and workover engineer for Unocal in Louisiana for 8 years and in Indonesia for 5 years. He supported the drilling of more than 70 wells, some as deep as 23,000 ft, in onshore Louisiana and Mississippi and off Louisiana, Alabama, Texas, Indonesia, and Brunei. During a 3-year period, while in Indonesia, he supported the drilling of deepwater exploration wells in the Makassar Strait with a second generation, semisubmersible drilling rig with surface blowout preventer stack. Sprawls also served as drilling manager for a Brunei joint venture in an exploratory drilling campaign in 2000.
Education
Sprawls holds a BS in petroleum engineering from Louisiana Tech University in Ruston, La.