Drilling success in land operations depends on a number of variables. Aside from drilling time and downhole tool performance, land rigs are defined primarily by the level to which equipment can automate portions of the drilling process and the speed at which the equipment can move.

According to Douglas-Westwood’s recent “World Land Drilling Rig Market Report 2011-2015,” North American demand has been re-incentivized through growth commodity prices. According to the report, drilling activity is likely to reach historic levels in North America, but internationally there will be less growth. Douglas-Westwood analysts estimate an excess of 5% growth in rig demand per year through 2015 within key markets on each continent.

Key players who can deliver compact, highly automated rigs with increased mobility will remain at the top of the food chain through this growth period.

Advancing the drilling curve

No stranger to rig innovation, Nabors Industries Ltd. has maintained a steady stream of land rig advances to answer increasing demand for next-generation rigs.

“We are always seeking ways to advance the performance of our rigs through innovation and technology, and the success of the B-series has been a positive reflection of that goal,” said Denny Smith, director of corporate development.

Nabors’ PACE B-Series is a winterized box-on-box 1,500-hp AC rig that features a unique moving system that allows it to move from wellhead to wellhead quickly and efficiently when drilling on a pad.

The company’s PACE B-Series is a winterized box-on-box 1,500-hp AC rig that was designed specifically for the harsh environment of North Dakota. The rig features a unique moving system that allows it to physically relocate under its own power from wellhead to wellhead quickly and efficiently when drilling on a pad. Another important advantage of the B-Series is the ability to move the mast and catwalk forward, backward, and from side to side to allow better access for simultaneous drilling and production operations.

The concept of “walking” rigs is not new, according to Smith. “Jack and claw moving systems were developed for use in offshore platform drilling, and the earliest ‘walking’ or ‘lift and roll’ systems were first used offshore in the 1970s,” he said. Nabors’ history with moving systems for land rigs began with the use of large wheel-mounted rigs on the North Slope of Alaska in the mid-1970s and continued with the first walking beam system deployed on the North Slope in 1996. The technology was further applied to its Canadian operations in 2003.

Nabors has developed fit-for-purpose rig designs for most geographic regions. The PACE rigs were engineered to accommodate new products and technologies designed to further enhance drilling efficiency and economy through improved control over factors critical to the drilling of a well. Some of the proprietary technologies Nabors has developed include ROCKIT (a surface rotary steerable system), DrillSmart (an autodriller system for both DC and AC rigs), and SureGrip (an automated casing running tool). The company also has enhanced a large number of its non-AC rigs with integrated technologies that replicate many of the drilling efficiencies of an AC rig, including the Canrig K-Box Suite and DrillSmart.

In addition to proprietary technologies, the company also is actively moving to provide enhanced automation to its land rigs. “Automation is quickly becoming an important area of rapid adoption by operators. HSE performance and operational efficiency are critical to the successful development of an unconventional resource basin,” Smith said.

Strength in numbers

As of March 31, 2011, the company’s land fleet stood at 551 actively marketed rigs in more than 25 countries in addition to 50 offshore platform and jackup rigs located in both the US Gulf of Mexico and abroad.

Nabors has deployed 104 AC rigs in the US lower 48 and an additional 62 AC rigs in other global markets. The rigs are working in both major domestic unconventional basins and in areas outside the lower 48, including slant applications in Canada and coiled tubing in Alaska. “We have developed fit-for-purpose rig designs for most geographic regions, and we are committed to constantly assessing ways to enhance the features within our current fleet,” Smith said.

In addition to its existing fleet, Nabors Drilling USA has approximately 25 AC rigs in the queue. “We continue to have encouraging conversations with our customers pertaining to future opportunities,” Smith said.

Although not new, pad drilling has become a preferred method of optimizing drilling campaigns. Where available, operators can generate multiple wells from a single location requiring fewer moves and providing a smaller footprint to drilling operations. The process has proven successful in several areas in North and South America and has been incorporated overseas in areas such as Romania, Russia, Kazakhstan, and Saudi Arabia. Nabors Drilling International is currently building rigs for pad drilling to go to Papua New Guinea and is actively responding to international tenders for shale development projects in Poland, Romania, and Australia.

Poised for global demand

While Eastern Europe has a history of conventional development, the biggest news of late is the possible expansion of the global shale market. While still in the early stages, international shale operations promise to increase activity in a big way if the geology proves favorable.

One question that lingers on operators’ minds is the rig availability in a full-scale development phase. To date, several Europe-based companies have kept pace with operators drilling science wells for coring and analysis. Within the next three to five years, as this activity increases, there will most likely be a bottleneck in supply of experienced crews and drilling rigs.

“Large-scale European shale development is an opportunity to be watched, but it is still in its infancy,” Smith said. As more international oil companies take concessions in the European shale development areas, more international tenders will be released after their initial planning phase is finalized. Nabors Drilling International is actively pursuing this market with drilling equipment as specified in the current and future tenders.

One consideration for moving rigs into the untapped shale plays of Eastern Europe is the specifications applied to equipment. Current European Union (EU) specs cover regulations and certification for equipment to be operated in the EU and are regulated by different entities than in the US. Some of the regulations and certification requirements for equipment operating in the EU are more stringent, especially the ATEX directive (ATmospheres EXplosibles) covering the actual delineation of hazardous areas to improve the safety and health protection of workers potentially at risk from explosive atmospheres and equipment and protective systems intended for use in explosive atmospheres.

Lifting equipment regulations (LOLER) and the provision and use of work equipment (PUWER) also apply. The LOLER and PUWER regulations cover all equipment used at work, including lifting equipment, installation of ladders, scaffolding, hoists, photocopiers; and tools such as hammers, knives, grinders, etc. Some of the electrical requirements, especially regarding the grounding of the drilling rig, are more stringent in the EU.

“We are familiar with the current EU regulations, and Nabors has successfully overcome some of the challenges associated with operating drilling equipment in Europe,” Smith said. It will be important for North American drilling contractors to understand the current EU regulations and install equipment that follows these regulations to be in work compliance. In Europe, all eyes are on North America’s experience with shale development, part of which relies on compact, highly mobile land rigs. Fortunately, conforming to EU specs will not require a “ground up” redesign of drilling rigs, but a careful selection of equipment is essential to avoid costly reworks after governing authority inspections to ensure conformity to the EU regulations to be given a certificate of European Conformity (CE marking).

Eastern European countries have only recently been accepted into the EU, and although they are adopting its regulations, there can be contradictions between the EU regulations and previous regulations established within some countries. “Understanding how to deal with these contradictions can be time-consuming but necessary to be successful in the long term,” Smith said.

As new technology arrives in the market place, local drilling crews will require more training to operate the new equipment.

Advancing the learning curve

Nabors has worked in the international arena for more than 50 years. “Each country, just like the United States, is unique and represents its own set of challenges,” Smith said. Generally, the challenges can be grouped into categories such as the individual government’s tax and importation regime, company registration requirements, regulatory requirements, local infrastructure, logistics, availability of a skilled local work force, work visas, etc. Understanding these challenges prior to mobilizing people and equipment, formulating a comprehensive plan to address these challenges, and developing a dedicated, experienced management team to execute the plan are essential to be successful in a new venture.

“The working climate in Eastern Europe is improving all the time as more Western companies invest and operate in the area,” Smith said. With more than a century of oil and gas exploration and production in the region, there exists a solid foundation manpower with a good initial skill set. “The challenge has been to transfer corporate values and the Western concept of private industry, but through training and continuity of operations, most of the local workers are making the transition,” Smith said. “Advancing a modern safety culture from the top down is certainly a challenge as changing years of unsafe behavior takes skilled trainers, a mentoring program, and definitely time,” he added.

As in any place in the world, there are unique local challenges in Eastern Europe, whether they are regulatory, local infrastructure, importation and tax regimes, trade unions, or restrictions on foreign workers. Overcoming these challenges and risks requires an understanding of the challenges, a plan for dealing with them, and a way to implement solutions.

“Although there is a long history of drilling in Eastern Europe, new technology and new drilling equipment are not prevalent,” Smith said. There is a need for more efficient drilling rigs to replace outdated, inefficient machines. As new technology arrives in the market place, local drilling crews will require more training to operate the new equipment. “Nabors Drilling International has the resources to be successful in any targeted market place,” Smith said.