Global Management Consultant Oil and Gas

Publications

True Lies: Measuring Drilling and Completion Efficiency

John P de Wardt; Peter H Rushmore; Phillip W Scott., IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA, March 2016, March 2016

SPE 178850

Drilling efficiency is an often used term for various measures that purport to represent the relative difference between current performance and some reference performance. Non Productive Time (NPT) is globally used as an analogue for efficiency. Many reported efficiency measurements are in the 90% range and NPT in the 20% range when the overall drilling and completion times are some 50% or more slower than Best In Class (BIC) as determined by external benchmarking. Current measures of drilling efficiency and NPT are both misleading and poorly defined.

This paper evaluates these misleading measurements and introduces the application of a meaningful measure of drilling efficiency. The term drilling efficiency is used for a short description; the same process applies to all well operations including drilling, testing, completion, well intervention, workover and plug and abandonment operations; the well life cycle.

A drilling efficiency model with reference to a calculation method is available for the industry to measure the real gap to 100% efficiency. This will in general produce vastly lower efficiency numbers for current performance than some of the inappropriate efficiency calculations currently used. It provides organizations with a more accurate view of the improvement potential they could aspire to reach, and become an enabler for the global oil and gas industry to improve performance and reduce cost of wells.

The recommended methodologies and efficiency measure provides the first realistic number for drilling efficiency. It will be a wake-up call to the industry and initially show much lower efficiency numbers than many organizations currently calculate and report. It will be an eye opener to managers who want to truly assess the performance of their drilling operations and provide them the information to set new performance goals. The challenge will be how willing the managers are to show how badly we perform as an industry today, and how persistent they are in the needed step change and follow through with improvement steps.

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Systems Architecture and Operations States for Drilling and Completion

The Foundation to Real Performance Measurement and Drilling Systems Automation

John P de Wardt, CEng FIMechE; Calvin E Inabinett Jr,; Moray L Laing; John D Macpherson,, IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA, March 2016, March 2016

SPE 178814

The highly fragmented nature of drilling and completion operations results in complex interactions that inhibit performance and systems automation. Reorganization into interconnected systems in a designed architecture aligned to key performance requirements and constraints solves this fragmentation. This realigned systems architecture provides a solid foundation to effectively measure and drive system performance, and implement drilling systems automation.

In current wellsite activities, the “operation state” identifies activities in drilling and completion operations, and is critical for accurate performance measurements, in managing automation modes, and in activating automation controls. Although a definition of operation states related to drilling (“drilling states”) exists, there is significant work remaining to validate a complete spectrum of these states, and to define completion states, wellbore states and other operation states.

This paper describes the concept of systems architecture as applied to drilling oil and gas wells. It explains how to develop systems architecture for specific drilling projects. The paper discusses the development of a range of operational states for performance monitoring and systems automation. These guidelines will enable all parties involved in either monitoring performance or implementing systems automation to use a common framework in a coherent and effective manner.

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Human Systems Integration

Key Enabler for Improved Driller Performance and Successful Automation Application

John P de Wardt, Thomas B Sheridan; Amanda DiFiore., IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA, March 2016, March 2016

SPE 178841

Human Systems Integration (HSI) is a multidisciplinary application of expertise that is heavily relied on in many domains including the military, aerospace and aviation. HSI optimizes the effectiveness of human interaction with the machine and ensures that technology, from development to acquisition, is focused on the requirements of the operator. HSI is finding wider adoption in heavy industrial applications due to its emphasis on improving operator safety and efficiency. HSI is a relatively new concept to drilling operations and has the potential to support significant improvements in performance and successful adoption of drilling systems automation.

The transition from manual to autonomous operation can be described in a formal taxonomy of discrete levels of automation. Such taxonomy can be adopted for drilling systems automation application. Notably, automation will advance more rapidly in locations not suited to human control as well as for feedback loops requiring continuous and high-frequency adjustment.

Introduction of HSI to the drilling industry, articulation of the Levels of Automation Taxonomy and a roadmap to provide significant improvement in the feedback to the driller in both manual and automation modes will be vastly beneficial to the drilling industry.

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Data Ownership for Drilling Automation

Managing the Impact

John Macpherson; John de Wardt; Moray Laing; Nathan Zenero,, IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA, March 2016, March 2016

SPE 178787

Drilling systems automation depends on timely flow of accurate and relevant data from multiple sources to control equipment, machines and processes. The fragmented nature of the drilling operations business means that data must be shared between the various companies contracted to perform services, and the various companies must trust that data. This paper describes the issue of data ownership in terms of the application of drilling systems automation, and proposes solutions.

This paper will describe the history of data measurement, data flow and data ownership in the drilling industry. It will address data ownership issues pertaining to both drilling systems automation and drilling performance improvement. Analogies from other industries will assist in understanding how those industries advanced their automation applications and processes in a multi-supplier environment. The paper will present a data ownership and data sharing solution that will provide an environment for drilling systems automation.

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Advanced Trajectory Computational Model Improves Calculated Borehole Positioning and Tortuosity

Mahmoud F. Abughaban; Dr. Bernard Bialecki; Dr. Alfred W. Eustes; John P. de Wardt; Steve Mullin., IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA, March 2016, March 2016

SPE 178796

Wellbore tortuosity, defined as the degree of wellbore deviation from the smooth trajectory, and wellbore rugosity, defined as the degree of wellbore diameter irregularity, are critical elements in determining torque and drag (T&D) magnitudes in the drilling of long-reach horizontal wells and deep verticals. Current three-dimensional well trajectory models represented by the minimum curvature method (MCM) tends to mathematically smoothen the wellpath between survey-stations creating an artificially low tortuosity expressed as dogleg severity (DLS). This can lead to the miscalculation of the actual true vertical depth (TVD), leading to the underestimation of T&D magnitude. A robust three-dimensional trajectory model, the Advanced Spline-Curve (ASC) model, has been developed by the Colorado School of Mines to overcome these limitations. The ASC model provides realistic results and accurately calculate the spatial course of the wellpath.

In this paper, various applications of the ASC model are presented and its results have been validated using two approaches: (a) an academic wellbore example of a known trajectory path, and (b) the use of high resolution continuous gyroscopic (HRCG) survey data recorded at one survey per foot. The calculated trajectory utilizing ASC model guarantees continuity along the entire wellpath with significant better accuracy as compared to MCM. These findings allow better wellbore positioning, more realistic tortuosity and the introduction of a rugosity measurement. This helps to evaluate drilling equipment and procedures while drilling highly deviated wells and extended verticals.

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Drilling Systems Automation Roadmap

The Means to Accelerate Adoption

John P de Wardt CEng FIMechE, John Macpherson, Mario Zamora, Blaine Dow, Slim Hbaieb, Robin Macmillan, Moray Laing, Amanda DiFiore, Calvin Inabinett , Mark Anderson., SPE/IADC Drilling Conference and Exhibition, London, UK, March 2015

SPE 173010-MS

The Drilling Systems Automation Roadmap (DSA-R) initiative is a cross-industry effort launched in June 2013 to accelerate the adoption of advancements in drilling systems automation. This technology roadmap will provide the drilling industry with a well-defined guide on the expected development and adoption of drilling systems automation technology in the near and long terms. The focus on needs, vision, scope, and boundaries will enable development of solutions to implement Drilling Systems Automation (DSA) in a manner that effectively improves performance, reduces well costs, removes people from high-risk operations, and promotes general drilling safety, among other key goals. To enhance consensus, the DSA-R initiative decided to affiliate with the SPE, IADC and the Association for Unmanned Vehicle Systems International (AUVSI).

The roadmap was segmented into eight key challenges, each individually defined in terms of functional description, performance targets, current status, problem statement, and development to meet the vision. The eight challenges are (1) Systems Architecture, (2) Communications, (3) Instrumentation and Measurement Systems, (4) Drilling Machines and Equipment, (5) Control Systems, (6) Simulation Systems and Modeling, (7) Human Systems Integration, and (8) Certification and Standards.

The purpose of this paper is to describe the launch of the DSA technology roadmap initiative, the processes being applied and key details on the status of each of the challenges.

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Well Cost Estimation and Control

Advanced Methodologies for Effective Well Cost Management

John P de Wardt CEng FIMechE & S Peterson, SPE/IADC Drilling Conference and Exhibition, London, UK, March 2015

SPE 173148-MS

Managers crave greater confidence in well construction costs, from the inception of a cost estimate for investment decisions, through cost estimation for budgeting, to cost tracking and control during well construction, and finally, for validity of performance tracking and benchmarking. Shortfalls in well cost estimation and control are due to three main sources: lack of defined processes, lack of discipline, and reliance on outdated or poor methodologies. This technical paper describes advanced methodologies for effective well cost management and documents their benefits to decision-makers and the industry. These include processes from the construction industry for cost tracking / control, best practices for estimating using probabilistic methods and leading to a process that can be applied for any well complexity utilizing modern methodologies. The technical content contributes directly to improved decision making by managers for investment in wells, improved planning for better decision making on choices for well design and drilling / completion operations including applications of various technologies, improved control of costs, and improved confidence that performance tracking and benchmarking are based on valid measures.

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The Drilling Business Model: Broken or Not?

John de Wardt, CEng, FIMechE, The Land Rig Newsletter, March 2014

MARCH 2014 VOLUME 36, NUMBER 3

The drilling business model is not broken; it is ineffective. It is the root cause of much inefficiency in well construction, i.e., drilling and completing wells.

In the early years of the industry, oil companies outsourced rig operations to contractors on a footage basis. It was a logical move, as oil companies perceived that the drilling contractor business was a commodity, easily employed when required and easily unemployed when not required. This was the 1930s and 1940s.

The footage model predominated until the 1970s, when deeper drilling and uncertainties in drilling wells caused exclusions to be accommodated that eventually led to the current, predominately day rat, time and material, model. This was a significant transition from a delivered quantity (performance) contract model to a (reimbursable) day rate model.

The drilling contracting business advanced from these early beginnings into the business it is today. There occurred a major transition from performing drilling operations to operating drilling rig assets.

Now the operators are seeking performance from drilling contractors, but there is limited incentive to do this under day rate contracts. Equipment (asset) ownership, and the stock market’s drive to price drilling contractor stock based on asset utilization, drives most rig owners to seek revenues, which implies remaining on contract.

Obviously, being on contract requires both a positive reputation to get the contract and the presence of a suitable rig. Improving performance, however, can be a recipe for going off contract sooner, placing revenues from the asset (drilling rig) at risk.

The turnkey drilling contracting business delivered performance at a price; it succeeded for many years then evaporated. The offshore market disappeared while the turnkey business in the land market remains at its historical 3% to 4.5% of total rig activity.

The question I ask is: Why did this model disappear in the offshore market when it had proven successful for turnkey contractors and their clients, and why did it not grow in the land market? The answer may be that the eventual owners of these turnkey businesses preferred the day rate model for their assets and withdrew their capability to deliver turnkey wells. In effect, the contractors defined the market.

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The Drilling Business Model: Driver or Inhibitor of Performance and Innovation

John P de Wardt CEng FIMechE, IADC/SPE Drilling Conference and Exhibition held in Fort Worth, Texas, USA,, March 2014

SPE 167933

The drilling business model has recently become the elephant in the room as drilling systems automation advances seek an integrator and technology / performance enhancements seek rewards. The day rate model has been adapted many times over the life of the industry but none of these adaptions has prevailed.

The business model entails a number of key aspects that drive business behaviors in the supply chain; control, liability, risk, revenue. Some companies have the approach that the operations team drives the contracting of suppliers while others draw the whole process under supply chain for process control and pricing leaving the delivery of value often in significant doubt.

This paper describes many of the business model adaptions created over the past 70 years from footage and turnkey through Integrated Project Management and Production Enhancement Contracts. Recently, actions and intentions have surfaced to transpose roles within the drilling supply chain to overcome resistance to change and improve financial performance (vertical integration by operators). This paper makes observations on the various forms of contract and various roles in the supply chain. The conclusions outline a blueprint for developing a business model that can drive performance and innovation throughout the supply chain.

Discussing the current business models and opening the industry to development of more appropriate models has extremely high value and impact. It is a topic often raised and often left un-debated. If a new business model is broadly adopted it will change roles, performance, technology application and revenues throughout the supply chain. Awareness of this potential change will be extremely important to managers and engineers in the drilling business.

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Lack of Progress in Adopting Drilling Systems Automation Shows Contract Drillers Lagging Other Industries

John de Wardt CEng FIMechE, The Land Rig Newsletter, December 2013

December 2013 Volume 35, Number 12

Drilling systems automation is a technology development that will significantly change the drilling business; it is not a question of how but when.

Many people have spoken eloquently on the need for drilling to adopt automation; however, it remains a struggle through misunderstanding, negative reactions, and inadequate financial rewards. The case for automation in land drilling, especially in the USA, is huge. According to an IADC publication, the turnover of personnel in the land drilling business is 50% in every two years.

Why does the contract drilling business in North America choose to remain non-automated when such huge value has been demonstrated in similar industries? The answer to this question probably lies in a number of barriers that include return on investment, reliability, ability to maintain higher technology equipment in the drilling environment, and the day rate business model adopted by the drilling industry.

Why are we so far behind usual industrial measurements and practices? It must be the business model; anyone who upgrades the mud measurement system to modern technology will not be rewarded under the traditional day rate contract.

The drilling industry will change; drilling rigs will become machines that correctly measure the state of their operations, automatically undertake some operations using algorithms, and provide frequent, timely, accurate, and relevant information to the drillers such that they are able to perform to the highest safety and performance standards possible. The only question is when and how this will occur.

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