SPE/IADC: Collaboration, innovation must transcend oil price

March 18, 2015
Leaders from oil and gas operators and drilling contractors were empanelled Mar. 17 at the 2015 SPE/IADC Drilling Conference & Exposition to tackle the issue of delivering wells in a changing world.

Leaders from oil and gas operators and drilling contractors were empanelled Mar. 17 at the 2015 SPE/IADC Drilling Conference & Exposition to tackle the issue of delivering wells in a changing world.

The problem of high oil field development costs coupled with low oil prices was a starting point for the conversation. The panelists made it clear, however, that this was an opportunity to come together as an industry to develop technologies and standards that would make the industry more safe, reliable, and profitable in any economic environment.

Collaboration still key

Gary Jones, head of the global wells organization for BP PLC said the drilling conference was an example of how the industry can come together to share ideas. This has to include more than asking contractors to drop their prices, which stunts the development of people and technology—an outcome that is beneficial to no one.

Some reduction in cost is necessary, but the future of the industry demands discovering ways to reduce inefficiencies. Costs can come down while contractor margins actually increase.

Steve Kaufmann, president of drilling and measurements for Schlumberger agreed. The positive of the current environment, he said, is that there is great willingness to talk more and work together for the long-term health of each player in the industry.

Operators, Kaufmann said, must understand where a contractor’s costs are incurred. He pointed to the deepwater Gulf of Mexico where efficiencies have driven down costs but there is an opportunity for collaboration to drive them down even further. Schlumberger provides 24 different wellbore sizes to that market, a costly inefficiency that can be removed by working together.

Kaufmann’s statement begs the question: Does collaboration lead inexorably to standardization?

Standardization, reliability

Ivan Tan, vice-president of wells HSE for Shell, said collaboration has led to standardization in areas such as safety. When you move into performance, however, there is less and less alignment. He pointed specifically to the need for standardized subsea well heads.

Arne Lyngholm, chief engineer of drilling technology for Statoil ASA, agreed that subsea well heads are an area of enormous cost and an excellent example of where standardization could help the industry become better aligned.

What the industry is really trying to achieve, said Jones, is to more quickly get to a place where new technologies have a norm like there currently is for top drives. This can be done through standardization or simply through common training.

Kaufmann agreed saying that the onus was to bring technology to a higher level of reliability in a shorter period of time. This would decrease risk and increase implementation of new technologies allowing the industry to adopt more advanced drilling practices accordingly.

It’s not just about continuous adoption of new innovations said Jack Winton, head of the operations division for KCA Deutag. Technology is only reliable when it is repeatable. Often the industry falls into the trap of reinvention. Innovation is critical but so is repeatability. Finding a technology that works well and can be done safely and efficiently, over and over, is the core of standardization.

Trust issues

If we trusted the reliability of automation we could take the human factor out of the HSE equation, said Jones. He added that automation went hand-in-hand with increased and standardized training—something an association such as IADC could facilitate.

Lyngholm and Winton pointed to the conservative nature of the oil and gas industry as a barrier to full adoption of automation. The technology has moved beyond the culture, said Winton, and it’s difficult to move beyond that. The technology is there, will the industry take this opportunity or will it an influx of new people and ideas?

Kaufmann believes that the industry is moving past its initial distrust of automation. Taking the workforce out of harm’s way is a part of overall risk reduction. De-manning is part of it. By doing more operations remotely, safety has improved for Schlumberger, but so has efficiency. To him, automation is inevitable. It has begun.