What do operators want? Good question. Safety tops the list of operator priorities, but it must occur in the face of drilling feats in deeper water to deeper targets offshore and to a wider variety of plays onshore. Several people speaking at the recent International Association of Drilling Contractors annual meeting offered additional insights.

Don Jacobsen, vice president, technical wells for Shell Exploration & Production, said his company is on target to spend $2 billion in exploration and production this year as it works 145 rigs from 30 countries. Shell looks to technology to offset exploration and development cost increases that can push a $1 billion project to $3 billion. For example, in a well with an authority for expenditure of 36 days, the company used its technical limits application to identify opportunities to drill the well in 19 days.

It uses expandable tubulars, underbalanced drilling, casing drilling and surface blowout preventers (BOPs) as part of that technology arsenal as it concentrates on places such as Wyoming’s tight Pinedale anticline, Alaska drilling conditions, fierce weather in Canada’s Orphan Basin offshore Newfoundland, huge wells in the Middle East, the massive potential of western Siberia and deep water in Malaysia. A surface BOP allows the company to explore in 9,000 ft (2,745 m) of water using a floater built with a capacity of 6,000 ft (1,830 m) of water.

Among leading projects, he listed Changbei in China, a 25- to 31-mile (40- to 50-km) structure that can support 40 to 50 dual-lateral wells with a target production of 35 Bcf (1 Bcm) by 2008. At Gumusut-Kalap in deepwater Malaysia, the company must deal with hydrate and shallow gas.

In the Gulf of Mexico, the company will use a spar platform to accomplish the deepest water production in the world from Great White, Silver Tip and Tobago fields. [Some wells will have 15,000-ft (4,575-m) directional reach.]

Joel Kiker, global drilling manager for ExxonMobil Development Corp., said his company is working toward playing its role in producing 60% more oil and gas by 2030. That will take technology and a concentration on conventional development. He said he didn’t think unconventional resources would be a major factor after 2030.

He expressed confidence the job could be done, particularly since the United States is the only area of the world in which more than half the reserves have been produced. The task will take technology such as ExxonMobil’s Sakhalin I project, with the most powerful land rig in the world drilling to targets 5 to 7 miles (8 to 11 km) offshore and installing intelligent wells.

Kevin Lacy, head of discipline-drilling and completions for BP, said that among technological challenges the industry faces in deep water are drilling in more than 10,000 ft (3,050 m) of water, lift in low gas-oil ratio reservoirs for better recoveries, dropped objects, subsalt imaging, high temperature-high pressure operations, smart wells and taming wells that produce 50 MMcf/d. “We’re now working in pressures and temperatures never seen before. We’re talking about when we will see a 20,000 psi stack,” Lacy said. “Drilling costs on these operations can represent half of total project costs,” he added.

While the industry copes with those tasks, it must assure the safety of its people, according to Lacy. High oil prices don’t affect attitudes about safety, but they do affect the time available to devote to it. “Without a ‘felt’ leadership, safety will suffer,” he added. “Every great performance starts with good leadership at all levels, every day, in all
situations. Each price regime change creates winners, and the winners are those companies that maintain values and principles,” Lacy said. “Those values and principals should apply to safety of workers.”

Rustom K. Mody, director of engineering for new product development with Baker Oil Tools, pointed out that enabling technology — intelligent well systems, expandable metal technology and drilling with casing and liners — had all been around for at least 10 years but had been applied in fewer than 1% of wells drilled annually. In a familiar refrain, he asked for cooperation between operators and contractors in getting new technologies to market earlier.

NIMBY (not in my back yard) is an attitude the industry regards as irrational, but to one questioner, NIMBY also seemed to mean “don’t try new technology on my well” to asset groups in operating companies. He said that generally those asset groups have a small budget for field trials of new technology and aren’t able to test even very promising new technology without rocking the fiscal boat. This stands directly in the path of Mody’s goal of cooperation.

The industry’s slow technology uptake has achieved the status of legend (“everybody stands in line for serial number 002”). Whether or not this is still true or accurate, the point remains that accelerated acceptance of new technology by greater cooperation with contractors and service companies is key to meeting operators’ needs.