SHELL PUSHES RIG ADVANCES, CONTRACT REVAMP

March 12, 1990
Rig mechanization and automation will be to the 1990's what development of horizontal drilling techniques was to the late 1980's, says R.M. (Ric) Charlton, director of exploration/production operations and liaison for Shell Internationale Petroleum Mij. Such advances are needed, he said, for the health of the industry. However, making sure new technologies are widely applied is as important as developing them, he told the annual drilling conference jointly sponsored in Houston by the

Rig mechanization and automation will be to the 1990's what development of horizontal drilling techniques was to the late 1980's, says R.M. (Ric) Charlton, director of exploration/production operations and liaison for Shell Internationale Petroleum Mij.

Such advances are needed, he said, for the health of the industry. However, making sure new technologies are widely applied is as important as developing them, he told the annual drilling conference jointly sponsored in Houston by the Society of Petroleum Engineers and International Association of Drilling Contractors.

Shell companies are moving toward incentive contracts and integrated services in their dealings with drilling contractors and service/supply companies in an effort to reduce costs.

"Traditionally we have ,rented' equipment and personnel for each of the services we needed and taken the responsibility for supervising their work," Charlton said.

"Now, the need to continue operating profitably against a background of low, fluctuating oil prices has caused us to reassess this way of operating."

RIG AUTOMATION

Charlton said rig automation offers a big reward for the industry because it will lead to a reduction in direct costs, save space and weight on platforms, reduce manpower requirements, and at the same time increase safety and reduce environmental damage.

Rig automation has been tried in the past with limited success, he pointed out. But today, systems and equipment that have been developed in other industries are available to make it work.

"I know of at least two rig automation developments under way, with prototype rigs expected by the end of 1990, and three others pending in Europe," Charlton said. "These developments are novel concepts, designed for automation rather than attempts to shoe horn automation into existing hardware."

A target for measurement while drilling systems is introduction of downhole safety sensors, mainly for gas kick detection.

"The next step forward will undoubtedly be downhole intelligence-systems that will sense and process downhole data and use it to control downhole mechanical systems," he said.

Charlton said joint operator and contractor cooperation research/development programs will continue to be important in developing new drilling technologies.

Some examples in which Shell companies are involved include programs with Sedco-Forex for deepwater floating drilling, Deutsche Tiefbohr AG for rig automation, Gyrodata for north seeking gyro surveying, and Eastman Christensen Co. for stratapax bits, steerable mud motors, and slim hole drilling.

CONTRACT CHANGES

Charlton said services such as drillsite preparation, rig transportation, and materials supply can be more efficiently undertaken as part of the primary drilling contract.

"Furthermore, we think, in the appropriate environment, drilling of wells on a lump sum basis under partial or complete control of the contractor will increase operational effectiveness," he said.

Shell companies have lump sum drilling operations under way in Oman, footage based incentive drilling operations in the North Sea and Tanzania, and soon will begin a turnkey exploration operation in Argentina.

"When we have direct supervisory control under day rate contracts we can impose our own standards on the procedures used in any operation," he said. Under incentive contracting, contractors will be required to adhere to the specification and standards of the contract.

The role of operator supervisors at the drillsite will change from direct supervision of labor and equipment to contract management. At the same time, the contract document will take on more significance in defining how and to what standards the work must be undertaken.

"We are preparing our supervisors for this role change," Charlton said. "We expect contractors to prepare themselves to meet the challenge of the work we will be offering."

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