IADC/SPE 87178 Offshore Rig Sharing Improves Exploration Drilling Performance: A Case History

David R. Bert, SPE, BP America Inc. term in October 1996, the rig was mobilized from the U.K. sector to Rotterdam, The Netherlands for modifications (pipehandling equipment installation and other upgrades) in order to comply with Norwegian regulations. Amoco Norway drilled the second and fifth wells in the program, including a challenging high-pressure, high-temperature (HPHT) well and a 58 geological sidetrack. Amoco U.K. drilled the third and sixth wells in the program (both HPHT). Another major operator (EniAgip) drilled the first, fourth, and seventh wells. Neither Amoco nor EniAgip had any financial interest in the other companys respective exploration project areas. The rig was released in August 1998. When the rig was contracted, there was a tight market for rigs, especially HPHT, 300-ft-water depth, harsh-environment rated jackup rigs capable of working in the Norwegian sector. Although the contracted rig met the minimum project requirements (after the pre-contract upgrades), it was less than optimal in regards to spud-can design, variable load, derrick load, living-quarters capacity, pipe-handling capability, and water-depth rating. In general, the rig was older and smaller than most competing (and unavailable) rigs in the class. Availability of the most versatile rig possible to meet the project timing requirements was the key driver in rig selection. In a tight market, it is often necessary for an operator to secure rig slots by executing rig contracts well in advance of the anticipated contract commencement (eight months in this instance). Amoco obtained sublet well commitments from several operators prior to signing the contract. The rig contract contained an assignment clause, which allowed Amoco to assign the rig to other operators. The rig contract, sublet well commitments, extension options, assignment rights, and rig-sharing agreements allowed Amoco to optimize rig utilization during tight market conditions. Amoco was able to keep the rig working throughout the contract with only minimal standby time. Rig-sharing agreements have been used in remote geographical areas, primarily to share the high mobilization and demobilization costs of bringing in a rig from another part of the world for only a short-duration well program. Rigsharing agreements became more prevalent beginning in 1995, as the demand for mobile offshore drilling units (MODUs) exceeded the supply. Rig-sharing arrangements have been used to fulfill exploratory drilling obligations with a limited number of MODUs available in West Africa, Southeast Asia, and the Caspian Sea1-3. Those consortia have obtained results that would not have been possible without the rig-sharing concept. Multiple rig-sharing clubs were formed, primarily to allow new-build rig construction, upgrading of stacked

Copyright 2004, IADC/SPE Drilling Conference This paper was prepared for presentation at the IADC/SPE Drilling Conference held in Dallas, Texas, U.S.A., 24 March 2004. This paper was selected for presentation by an IADC/SPE Program Committee following review of information contained in a proposal submitted by the author(s). Contents of the paper, as presented, have not been reviewed by the International Association of Drilling Contractors or Society of Petroleum Engineers and are subject to correction by the author(s). The material, as presented, does not necessarily reflect any position of the International Association of Drilling Contractors or Society of Petroleum Engineers, their officers, or members. Papers presented at IADC/SPE meetings are subject to publication review by Editorial Committees of the International Association of Drilling Contractors and Society of Petroleum Engineers. Electronic reproduction, distribution, or storage of any part of this paper for commercial purposes without the written consent of the International Association of Drilling Contractors and Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to a proposal of not more than 300 words; illustrations may not be copied. The proposal must contain conspicuous acknowledgment of where and by whom the paper was presented. Write Librarian, SPE, P.O. Box 833836, Richardson, TX 75083-3836, U.S.A., fax 01-972-952-9435.

Abstract A jackup-drilling rig drilled seven exploration wells in the U.K. and Norwegian sectors of the North Sea during a twoyear drilling program. By using sublet well commitments and assignments, the rig was secured in a very tight rig market. The drilling rig was shared between two Amoco (now a part of BP) business units for four wells and another major operator for three wells. The application of rig and personnel sharing produced over 10% (U.S. $12 million) cost savings to Amoco through shared lessons learned, continuous improvement, and reduced permitting time. An additional savings of over 10% (U.S. $12 million) was achieved through detailed planning and risk assessment that significantly reduced unscheduled-event (trouble) time. Key factors for success of the program include continuous use of the same rig, crews, and offshore team members; the vision and support of management; adequate well design and pre-planning time; and the commitment of the right people with the right talents to the projects. The same Amoco wellsite supervisors were utilized throughout the program (even as the rig moved from operator to operator). This paper summarizes how the sharing of a rig, people, and best practices can improve exploration drilling performance, even across different teams, business units, operators, and countries. Examples of sharing knowledge between project teams are presented to quantify the value of a long-term drilling rig contract for one-off exploration wells. The paper concludes by providing lessons learned from rig-sharing agreements and future applications of rig sharing. Introduction Amoco Norway signed a long-term rig contract for a harshenvironment, heavy-duty jackup-drilling rig (Transocean Nordic) in February 1996. Prior to commencing the contract

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IADC/SPE 87178

vessels, and to provide a stable, long-term rig schedule which would allow the rig to remain active in the area. In recent years, rig-sharing arrangements have been used in floating drilling operations in some areas. There are several key differences between Amocos North Sea rig-sharing experience and traditional rig equipment only sharing agreements. Amoco wellsite supervisors, service-company personnel, rig crews, and best practices were shared along with the rig equipment as the rig moved between countries and operators. The lessons learned and performance improvements were documented and shared between the well teams for continuous improvement over a two-year period. The well teams were staffed to provide synergistic benefits with the rig-sharing arrangement. Sharing of personnel allowed less-than-optimal rig availability to be overcome through enhanced planning and other benefits. Rig Contracting and Scheduling The application of rig sharing yielded significant savings over the seven-well drilling program. Overall, it is conservatively estimated that there was in excess of 10% savings (U.S. $12 million on Amocos four wells) through shared best practices, continuous improvement, and reduced permitting time (the latter after each business units first well). By contracting the rig for initially one year and subsequently extending the contract to two years, Amoco Norway was able to spread the costs associated with contracting, mobilizing, and demobilizing the rig among two Amoco Norway wells and five wells of other operating units. Amoco Norway saved in excess of U.S. $1 million through sharing these costs. Amoco Norway also saved in excess of U.S. $6 million by sharing and distributing the rig-upgrade costs among seven wells over a two-year period instead of one or two wells over a six- to nine-month period. Amoco U.K.s cost savings associated with contracting were significantly less because of improved rig market conditions in the U.K. However, Amoco U.K. was able to save U.S. $400,000 by using Amoco Norways contract as compared to initiating a new rig contract on the spot market. Using the same rig several times avoids work duplication associated with rig inspections, drillstring inspection, acceptance testing programs, audits, and other verification activities that are required to reduce downtime risk exposure and for regulatory compliance. A major benefit of the rig sharing was that Amoco was able to secure four timely drilling slots for its program in a tight rig market. The wells were drilled on a schedule that was controlled by Amoco, and not a third party. Amoco U.K. was able to drill its two wells sooner than spot market availability would have allowed. Amoco U.K. could have eventually obtained a rig in mid-1998, which would have delayed the drilling of its two wells by at least 18 months. In addition, the spot market day rates in early 1998 would have been 50% higher (U.S. $10 million) than the shared rigs day rate. Continuity of Oil-Company Personnel By passing the rig between Amoco Norway and Amoco U.K. business units, and by maintaining Amoco wellsite supervisors on the rig throughout the rig upgrade and contract period (even on wells operated by EniAgip), lessons were shared and

rig efficiency was continuously improved. Upon completion of Well 2 (Amoco Norways first well), a drilling engineer was transferred to the Well 3 team (Amoco U.K.s first well). A typical implementation team consisted of one team leader, from two to five drilling engineers, and six rotational offshore wellsite supervisors. A typical planning team consisted of one team leader, from one to three drilling engineers, and two onshore-based rotational wellsite supervisors assigned to fulltime well planning for upcoming wells. The six wellsite supervisors worked a rotational schedule of one week in the onshore office prior to working two-weeks offshore. The week in the office allowed the wellsite supervisors to assist with forward planning, contingency plan development, post-well evaluation, and review of plans for upcoming wells. Two Amoco wellsite supervisors were used by EniAgip to level-load staff for a two-well per year exploration program, and to benefit from their experience with the rig and crews. Many of the wellsite supervisors had previous technical training and experience working as a drilling engineer (over half were degreed engineers). Therefore, the detailed well operations programs were, in most cases, written completely by the wellsite supervisors who would be implementing the operations on the rig. There was extensive interaction between the teams during the planning phase that contributed to overall success. By using the same rig and sharing personnel between the two Amoco business units and EniAgip, drilling activities in each unit were level loaded and hence overall costs were reduced. Management was committed to placing the right people with the right skills, talents, and experience on these projects. The long-term program, pre-planning, and management support allowed for personnel to be loaned to another business unit or even to another operator for a single well. Seven personnel (one engineer and six wellsite supervisors) were loaned backand-forth between the two Amoco business units. Two Amoco wellsite supervisors followed the rig continuously and were periodically seconded to the EniAgip wells. Management understood that these people would return in a few months, and would be able to contribute even more as a result of the short-term secondee assignment. For the four Amoco wells, there were 31 drilling professionals (15 wellsite supervisors, 12 engineers, and four team leaders) involved between the two business units. Of these 31 people, 10 people worked on at least two of the wells, two people worked on three wells, and one person was involved in all four wells. The team leaders were not shared across business units, as these people were leading the planning process for latter wells in the program. The two wellsite supervisors who worked on three or four wells were instrumental in providing continuity between wells and across business units. Continuity of Rig Crew and Service Personnel Safety performance on the shared rig was enhanced by rigcrew continuity and by the crews becoming familiar with Amocos operating practices. There were no environmental incidents during the program (all four Amoco wells used oilbase mud). The continuous program allowed for real safety management and continuous improvement. The long-term program allowed all companies involved to focus on attracting

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and retaining talented personnel with the right skills and attitude. In many instances, potential team members were interviewed and handpicked for the projects. Personnel were continuously upgraded (when necessary) by either reassignments or further training, which would not be possible for a one-off well program. The long-term program also enhanced the degree of focus placed on individual performance, as well as the dialogue between the operator, drilling contractor, and service companies. The requirement was established upfront with all of the contractors, that safety and operational performance were a condition for continued project involvement. With the exception of the electric-logging services, thirdparty services with preferred vendors (in some cases these were alliance partners) were initiated at the beginning of the rig contract and continued to the end. Operational efficiency was enhanced from use of the same equipment and crews for two years. Cost savings were also realized by not having to mobilize and demobilize equipment from well to well. A long-term contract allows for the selection of talented team members, rig crew, and service personnel with advanced training, better qualification, and more experience. In general, personnel with HPHT drilling experience were selected. An example of advanced qualification is a cementer who is crosstrained and experienced running downhole tools. For another example, the Rig Medic could be a certified Paramedic instead of an Emergency Medical Technician (EMT). A U.S. Paramedic certification requires 1100 hours of training compared to the EMT requirement of 106 hours. Paramedics perform all of the Basic Life Support skills of an EMT but are also trained to provide Advanced Life Support (ALS) and to identify the signs and symptoms of all medical emergency possibilities. The ALS skills include reading an electrocardiogram, defibrillation, intravenous access, endotracheal intubation, and administering medication via intravenous or below-skin injection. The decision was made early in the program to retain the same Norwegian-based rig crews and service personnel from the first two wells (drilled in the Norwegian sector) while the rig was drilling Well 3 and Well 6 in the U.K. sector. The increased personnel and travel costs for these two U.K.-sector wells were more than offset by maintaining continuous operations efficiency and safety performance (and not having to integrate new teams of personnel). Personnel continuity allowed the projects learnings and knowledge base to remain with the rig crew to positively impact performance. Drilling Performance Summary The challenges of HPHT exploration drilling in the North Sea and other areas of the world have been documented4, 611. In addition to high bottomhole pressure (over 10,000 psia) and high bottomhole static temperature (BHST) in excess of 300F, these challenges primarily include pore pressure prediction, kick tolerance, casing design, and narrow pore pressure and fracture gradient (PPFG) windows. All of the four Amoco wells reached and evaluated their intended exploration objectives. All four wells were difficult and challenging wells with significant geological uncertainty and technical complexity (three HPHT wells, 58 geological sidetrack). The geologic factors presented several challenging

incidents of well control, lost circulation, and shallow gas. A shallow-gas flow and an underground flow were both safely and efficiently controlled. Many of the wells had a tight window between formation pore pressure and fracture gradient. Well 2 and Well 3 were classified as most difficult HPHT wells due to PPFG convergence and the tight placement required for the 9-in. casing shoe in a complex pressure-transition zone. This risk was mitigated by using advanced modeling and by moving the surface locations away from the crest of the structure. The three HPHT wells were drilled in water depths that approached the operating limits of the rig. Other technical challenges included re-establishing 14-in. casing integrity after a mudline-hanger failure and re-establishing 30-in. riser integrity after a storm-induced subsea wellhead-housing connector failure. Table 1: HPHT Jackup-Drilling Rigs
Amoco U.K. Exploration Well Data Year Drilled Total Depth, ft Maximum Mud Weight, lbm/gal BHST, F Frac Margin, lbm/gal No. of 1 Runs Bit Previous FourWell Average

Wells

Drilled

with

Rig-Sharing Well 3

Rig-Sharing Well 6

199497 14,520

1997 16,820

1998 15,028

15.7

17.6

15.8

320 2.3

358 1.0

325 2.4

15

11

14

Unscheduled 2 Event Time Feet Per Day (Spud to TD)

1

14.8%

11.7%

11.8%

248
2

244

211

Excludes core bit runs. weather downtime.

Dry and Abandoned. Excludes waiting on

Well 2 ran a 14-in. casing string to an Amoco Norway record depth of 14,222 ft. The well was drilled to 17,064 ft total depth with 17.5-lbm/gal mud weight. Well 3 and Well 6 set drilling performance records for fewest number of bit runs. Well 3 established an Amoco U.K. record for wells drilled below 16,000 ft (fewest days from spud to rig release; 88 days). The well had the deepest total depth (16,820 ft), highest mud weight (17.6-lbm/gal), highest BHST (358F), lowest fracture margin (1.0-lbm/gal between fracture pressure and mud weight), and most complex pressure-transition zone of any HPHT well drilled by Amoco U.K. Table 1 contains a summary comparison of Well 3 and Well 6 with other similar Amoco U.K. HPHT wells drilled using jackup-drilling rigs. The two U.K.-sector HPHT wells were drilled with an average of 11.8% unscheduled-event (UE) time. This 11.8% UE time represents a 13% savings when compared to the

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typical UE time of 25% or more for HPHT exploration wells of this level of difficulty4. The 11.8% UE time was also a 20% reduction compared to the previous Amoco four-well average in the U.K.-sector Central-Graben Jurassic area. The previous four wells were drilled with a modern upgraded rig (enhanced solids-control equipment, variable load, deck area, bulk and liquid capacities, topdrive, mud pumps, and 6-in. drillstring). The 199497 wells were also drilled to shallower depths with lower BHSTs and higher fracture-pressure margins. Sharing of Best Practices Between Well Teams There are numerous examples of shared best practices and lessons learned between wells that were possible as a result of the rig-sharing arrangement. The U.S. President, Harry S Truman said, Its what you learn after you know it all that counts. Continuous development drilling programs have proven the continuous-improvement learning curve whereby each subsequent well in the field development is drilled faster and cheaper. The rig and team-sharing arrangement allowed for best practices and lessons learned to be built upon rather than reinvented on each one-off exploration well. Some of the benefits implied from rig sharing could also be realized if only a long-term contract was in place and drilling staff from different business units readily shared information. The following examples illustrate and quantify the long-term benefits of a continuous drilling-rig contract for one-off exploration wells, even when the wells are in different geological areas. The best practices and lessons learned cover all areas of drilling operations. Planning and Pre-Spud Activities. Thorogood et al.5 presented the organizational structures, systems, and processes which were used in a five-well exploration drilling program involving three different rigs and teams. Front-end loading, risk assessment, detailed planning, and integration of service providers were also among the key factors in the Amoco rigsharing case history involving one rig and multiple teams. Amoco Norways rig verification, acceptance, documentation, and inspection activities benefited the other business units by ensuring that the rig was fit for purpose and ready to drill a difficult well. Rig repair downtime was extremely low during the four Amoco wells, and decreased as the ongoing drilling program progressed. Rig repair downtime on Well 2 was 2.3%, and steadily decreased to 0.4% on Well 6. This continuous improvement in downtime reduction saved four days of rig time for the last three Amoco wells compared to the first Amoco well (Well 2). A continuous rig program allowed rig-crew safety orientations, team-building activities, well-planning sessions, focused unscheduled-event reduction workshops, and HPHT well-control training requirements to be reduced later in the program. At the beginning of the rig contract, a five-day combination training session was conducted. Two-day training sessions were held for Well 3 and Well 5. Because of the early training, personnel continuity, and experience gained from the ongoing program, a formal rig-crew training session was not required for Well 6. HPHT operations manuals, hazard identification and mitigation, risk assessments, rig acceptance/inspections/audits,

relief-well contingency plans, safety management system bridging documents, safety-case review, and equipment lists were shared as the program progressed. Technical studies were initiated and shared by the planning teams in the areas of conductor/seabed foundation and tensioning requirements; 20-in. casing tensioning, stress joint, and centralization requirements; kick modeling; mud-gas separator capacity verification, risk, and mitigation; and shallow-gas planning. Drilling operations plans, contingency drillstem-testing programs, and well design documents were also shared, optimized, and improved throughout the program. HPHT exploration well planning costs are typically twice as high as for non-HPHT wells. Transferring these planning documents, as well as reducing the training requirements, saved a total of U.S. $850,000 on subsequent wells. The shallow-gas risk assessment, risk mitigation, and riskmanagement methodology from Well 2 was transferred to the Well 3 team. As a result, management recognized the Well 3 team for world-class performance in this area. The continuous rig program and sharing of wellsite supervisors allowed the well plans to be continually improved and optimized. Rig operating procedures such as rigging up, installing blowout-prevention equipment (BOPE), running casing, mixing spacers, cementing, and well abandonment were optimized from well to well. Unscheduled-event reports were shared between wells to enhance project execution. Daily drilling reports contained detailed time breakdowns, operational parameters, and technical information to communicate the entire operational summary to both the onshore implementation team and the onshore (latter well) planning team. The wellsite supervisors regularly updated a long-term well operations forecast that communicated end-of-well timing and coordinated planning activities across business units. The operations forecast was very detailed and included a time estimate for each individual task in the critical path for drilling the well. Lessons Learned from the Shakedown Well. Amoco Norway benefited from improved efficiency associated with not having to drill Well 2 immediately after the rig was upgraded and staffed to operate in Norway. EniAgip drilled the shakedown well (Well 1, which was the first well drilled on the contract in the Norwegian sector following major rig upgrades). Four Amoco wellsite supervisors were members of the Well 1 offshore team. There was a learning period associated with new crewmembers learning the rig and existing crewmembers learning new job positions, equipment, and procedures. Based on previous Amoco experience, the first well drilled with a new crew or on a new rig contract typically has an additional 5% UE time due to crew inefficiency. Therefore, savings on Well 2 due to increased efficiency (being further down the learning curve) is conservatively estimated at U.S. $350,000. In addition, there was 50 hours of UE time on the shakedown well associated with breakdowns of newly installed equipment. Lessons learned from the shakedown well resulted in improved safety and timesavings on subsequent wells by optimizing the diverter installation procedure. Gravel dumping procedures for spud-can scour protection were

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improved on subsequent wells, saving two days of rig standby time on Well 5. Health, Safety, and Environment. Extensive workingenvironment improvements and rig upgrades were performed in order for the rig to meet Norwegian-sector operating requirements. The major upgrade was the installation of automated pipe-handling equipment. Magnetic pipe-rack crane, catwalk pipe feeder, V-door monkey-tail crane, racking arms, and casing-tong modem equipment were installed. Rig air ventilation systems were enhanced. A cuttingshandling system was installed for collecting oil-base mud cuttings. A secondary-tensioning system was installed for the 20-in. casing string in order to safely operate in deeper water depths6. The BOPE and drillstring were audited and inspected at the shipyard. A small gymnasium, service-company office, safety-delegate office, and helicopter check-in lounge were added. The living quarters were upgraded (new beds, lounge furniture, salad-bar chiller, and television system). Another example of a value-added upgrade is the installation of drybreak liquid-transfer couplings for the oil-base mud and fuel transfer hoses (environmentally-safe fluid-handling couplings). Most of these rig upgrades would not have been possible if the rig was working on a short-term, well-to-well, or spot-market contract. At the beginning of the rig contract, a drilling-mud chemical powder-handling system was installed on the rig. The system eliminated airborne dust hazards, powder-mixing waste, and manual handling of sack material. The unit improved operator safety and working environment, and reduced the personnel requirements for chemical addition during mud mixing. The long-term rig contract allowed the system to be used throughout the contract term, even on shortduration wells (minimized installation and training). The long-term contract and continuity of rig crews, service personnel, and wellsite supervisors allowed for special opportunities to participate in safety activities. As an example, all of the wellsite supervisors, and many of the regular offshore service personnel and onshore team members, participated in the drilling contractors safety leadership training seminars with the rig crews. Another example was an increased level of drilling contractor and service company visits to the rig by onshore management. Materials Coordination and Logistics. Materials coordination between wells provided additional synergy and cost savings. An example is contingency tubular agreements, which were initially set up for Well 2 and carried over to subsequent wells. Common well designs (casing sizes, casing connectors, wellhead specifications, and liner equipment) were used as much as possible to allow equipment sharing, continuous improvement, and optimization of running procedures from well to well. Backup long-lead time drillstem testing, wellhead, liner hanger, contingency casing strings, and casing equipment were shared between wells. Reusable equipment such as riser stress joints, mudline hangers, and wellheads were shared. A special walk-away, verticalseismic profile marine vessel was located on short notice in a tight market for Well 6 (U.K. sector) by utilizing Norwegiansector contacts.

Rig-based logistics planning was more accurate because of access to detailed operations and logistics data from the previous wells in the program. The use of materials controllers and a cost-tracking system software program was transferred from the U.K.-sector wells to Well 5 in Norway. This resulted in improved logistics and cost management (actual cost was within 2% of the final reported cost). Drill Bits and Bottomhole Assemblies. Well 2 and Well 3 teams worked together to optimize the use of 1,200 ft of 6in. drillpipe in the BHA. This BHA design was successfully used on three HPHT wells drilled by the shared rig. The 6in. drillpipe BHA improved rate-of-penetration (ROP) by allowing higher flow rates and bit hydraulics (13% improvement). Other BHA designs and best practices were shared between wells to improve deviation control, drill through boulder zones, and minimize drill-bit trips. The Tertiary formation in the 16-in. hole interval from 2,500 ft to 11,000 ft is an opportunity for fast ROP and drilling performance improvement. The 16-in. hole interval learnings (cuttings-handling auger size upgraded, drill-bit preservation techniques, solids-processing improvements, and steerable BHA) were transferred from Well 3 to Well 6 to achieve a step-change improvement in performance. As a result, Well 6 set a new North Sea record by drilling the 16-in. hole interval formation sequences in one drill-bit run. When using mud motors, the motor stall test was used to check the performance of the mud motor during drilling to determine if the motor or drill bit is beginning to wear. Negative drilling break practices were adopted to minimize bit damage and extend drill-bit life. ROP was also improved by over 50% as a result of enhancing solids-processing capacity. Improving upon the bit and BHA lessons learned, Well 6 eliminated four drill-bit runs and increased ROP by 43% in the 16-in. hole interval as compared to the most recent offset well (savings of U.S. $1.8 million). Well 6 drilled 7,861 ft of 16in. hole in 99.5 hours at an average ROP of 79 ft/hour (saving 8.7 days of rig time vs. the well plan). Well 6 also used drillbit preservation techniques and downhole lateral-vibration monitoring to eliminate three drill-bit runs in the 12-in. hole interval, saving 126 hours of trip time. Casing and Cementing. The benefits of having a 30-in. casing swedge available as a contingency for washing down the conductor were demonstrated on Well 2 and then transferred to subsequent wells. The Well 2 team designed and implemented a procedure to float in the long 9-in. casing string (in order to overcome rig load limitations). This procedure was successfully implemented on Well 3, saving U.S. $1 million by not running a liner and tieback-casing string. The procedure was also optimized on Well 3 to save time by not parking the topdrive. The inner-string 9-in. cement job initially evaluated, designed, and implemented on Well 2 was subsequently applied on Well 6, saving over 1.5 days of rig standby time and oil-base mud costs. A long string of 5-in. drillpipe was suspended from a packer set below the mudline in order to minimize mud losses during cement displacement. The operation eliminated the need to run and set a cement retainer,

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IADC/SPE 87178

run the inner-string of drillpipe, and then mill up the cement retainer after the cementing operation. Experience from the first two HPHT wells contributed to risk analysis and mitigation on Well 6. For example, Well 3 experience relating to 12-in. hole conditions resulted in elimination of a planned wiper trip after wireline-logging operations on Well 6. The Amoco Norway pump-and-pull plug cementing technique was transferred to Well 6. On Well 6, the technique was modified and performed through the bit in order to save 2.25 days of rig time while setting a lost-circulation cement plug. The 30-in. conductor and 20-in. casing designs were shared between Well 3 and Well 6. The upgraded wellhead system, 20-in. secondary-tensioning system upgrade, and 30in. tensioning system operating and rig-up procedures were also shared (saved U.S. $325,000 on Well 6). Mud and Cuttings Handling. Cuttings bagging (e.g., skip and ship) and downhole annular-injection procedures were transferred from Well 2 to Well 5. Following a recommendation from the Well 2 team, a forklift was used on Well 5 in order to avoid shutdown of drilling operations during high winds. A new synthetic-oil HPHT mud system was successfully used on Well 3 along with a cuttings dryer/centrifuge system and then later transferred to Well 6. Formation Evaluation. Lessons learned from oriented coring were transferred to Well 5. Gel-coring experience was transferred from Well 5 to the Well 6 planning team, which consequently decided not to use gel coring. Rig-Sharing Agreements: Lessons Learned and Recommendations Communication and Flexibility. There were some lessons learned that were necessary to implement the rig-sharing arrangement. The business units need to be understanding and cooperate with each other. Regular, active, and open communication is essential. Project managers should communicate directly about project timing requirements and projections. Rig programs and sharing opportunities should be a regular discussion item at leadership team meetings. The value of rig sharing should be communicated to the drilling teams customers, to the parent corporation, and to the industry. Rig sharing internally within the same company remains a challenge within a business unit structure. In order for rig sharing between business units or affiliated companies to be successful, it is necessary to focus on value to the parent corporation overall, and not just to an individual business unit. The drilling team should broker the discussion between business units, but cannot referee or decide for the parent corporation. There needs to be some give-and-take by all parties (including other operators involved in the rig-sharing agreement). It is important to obtain mutual agreement and commitment in advance concerning project timing, handling of contract extension options, transition between wells and business units, rig transfer issues, schedule changes, etc. Flexibility and planning is required in order for each business

unit to be ready to respond to changes in project timing. An example is for a team to be prepared to move a latter well forward in response to another business units change of plans. It is also helpful to have a contingency operator/well available, ready to be drilled on short notice if another operator or business unit has a change in plans. The Amoco rig-sharing experience benefited from a regional drilling organization structure that provided some alignment between the two business units drilling teams. It is also helpful to choose rig-sharing partners with similar operating styles and who share a commitment to making the arrangement successful. Rig-Sharing Agreements and Cost Allocation. The Amoco rig-sharing experience has identified areas for further rigsharing performance improvement. A formal rig-sharing agreement was prepared and approved by all parties at the beginning of the contract. This agreement specified the costs to be shared (contracting, rig acceptance testing, mobilization, demobilization, upgrades, manpower, etc.). The rig costs were shared according to the drilling days the rig was used by each business unit or operator. Initially, the days for each operator (or well), and therefore their prorated cost responsibility, were estimated for the two-year contract period. These prorated costs were estimated in order to pay for the up-front contracting, mobilization, and rig acceptance activities. At the end of the contract period, the total actual shared costs were apportioned according to the actual rig days used by each well. A problem with this system was that wells drilled at the beginning of the contract period were charged with demobilization costs up to two years later, long after the well Authority-For-Expenditure accounting had been closed out. A solution to this problem may be to have the drilling contractor quote a lump sum demobilization charge up-front. Another solution would be to have the drilling contractor roll the estimated or agreed demobilization costs in to the rig operating day rate over the contract term. Rig-Sharing Contract Issues. Moomjian12 discussed some of the issues that must be addressed concerning extension options, assignment clauses, commencement date, option period duration, and various forms of rig-sharing agreements. Talbot1 presented a Multi-Operator Agreement framework and also discussed issues such as rig maintenance between wells, periodic equipment inspection, rig movement between countries (e.g., maintaining crew continuity and safety performance), continuity of operations, and timing delays. Bin Ismail2 discussed a rig-sharing agreement between operating units of the same oil company, including issues such as cost sharing, direct cost-charging, and the rig selection/tendering process. Contractual safeguards are necessary to protect the operator who holds the rig contract. Early commitment to taking a rig assignment (by a business unit or another operator) is important because in a tight rig market, it is often necessary to exercise extension options early in the primary contract term. In a tight market, extension options are usually for specified time periods as opposed to well by well. Advanced planning and flexibility are required to handle any additional contract time obligations at the end of the last well,

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and before the final extension option period is concluded. Solutions to this last-well timing problem might include an end-of-contract extension option duration for a single well or for a shorter time period (e.g., three months instead of six months). Pre-Contract Rig Upgrade Decisions. Prior to entering the shipyard for the pre-contract rig upgrades, the Amoco drilling teams discussed and evaluated numerous potential upgrade projects. Upgrading the rig to be able to handle more than 1,200 ft of 6-in. drillpipe was studied, but could not be economically justified at that time. The benefits of a full string of 6-in. drillpipe in the Gulf of Mexico have been documented by Smith et al.4 In hindsight, using a full string of 6-in. drillpipe would have been justified on Well 2 alone, after the well design changed and required the use of waterbase mud for the deep 17-in. hole section to 14,222 ft. Spudcan design was discussed but the decision was made to continue to use the existing spud cans. Insufficient spud-can penetration on several of the programs wells added significant costs associated with gravel dumping. It is recommended that all potential rig upgrades be closely evaluated, and a special weighting factor be applied due to the unexpected nature of exploratory drilling and the uncertainty of a long-term program that has not yet been fully planned or defined. The longer the term of the rig-sharing agreement, the easier it becomes to justify more extensive rig upgrades. Using a technically suitable and fit-for-purpose rig (as opposed to a technically-compromised rig with a lower contract day rate) has been proven to lower total well costs2, 15. Future Rig-Sharing Applications Over the past decade, industry cooperation to reduce project costs has fundamentally improved (e.g., deepwater technology development, subsea flow assurance, offshore facility hubs, etc.). It is the authors opinion that there are many opportunities for cooperative rig equipment and human resource sharing (including wellsite supervisors and project engineers). Ultra-Deep Gas Exploration. In the future, rig sharing may have a promising application to the proposed Gulf of Mexico shelf ultra-deep gas exploration concept. In this frontier exploration concept, record-depth wells as deep as 32,000 ft are envisioned13. These ultra-HPHT wells would most likely require 15,000-psia to 20,000-psia BOPE and wellhead. The development and use of high-specification well equipment such as wellheads could be shared between operators. There are only a handful of these ultra-high specification jackupdrilling rigs in existence (2-million-lbf derrick load capacity and capable of drilling beyond 30,000 ft)14. There are currently only two jackup-drilling rigs in the Gulf of Mexico equipped with a 2-million-lbf-rated derrick and 15,000-psia BOPE14. Rig sharing would leverage the available rig equipment, rig-crew experience, operator experience, and technical innovations to the mutual benefit of both the drilling contractors and the operating companies. Technical and operational risk could be leveraged through sharing and reduction of mistakes (e.g., share the learning curve). A rig-sharing agreement would allow each operating

companys exploration schedule to proceed at a more optimal pace. Alternating wells between operators would allow additional planning and data analysis between wells, without losing the efficiency improvements gained from a continuous program. High-Specification Floating Rigs. Rig sharing could have an expanded application to ultra-high specification multipleactivity derrick, dynamically positioned semi-submersibles and drillships. Rig sharing would allow the special capabilities of these higher-cost rigs to be better utilized, even on smaller projects, leading to increased rig utilization. The deepwater Gulf of Mexico Cajun Express project is a recent example of two operators sharing a dual-derrick rig and personnel as part of an integrated well-completion project team1517. The project was able to leverage complex wellcompletion implementation and synergy to enhance marginal field development economics. Rig sharing could also be applied to Gulf of Mexico ultradeepwater drilling. Currently, there are only six floating rigs in the area that are rated to drill beyond 30,000 ft, and only a few of these rigs are equipped to drill in 10,000-ft-water depths14. Upgrading Older Rigs. A further application may be in the area of older, lower-specification MODUs (e.g., smaller jackup-drilling rigs and single-activity semi-submersible drilling rigs). In the current contracting environment, it is difficult to justify upgrades to these smaller rigs for only a short-term project. Some of the larger jackup-drilling rigs are being either built or upgraded on speculation to be positioned to take advantage of the shallower depths of the deep gas play (20,000 ft to 25,000 ft). Rig sharing is a viable solution to share the costs of rig upgrades over many smaller projects, to the mutual benefit of all parties. A third mud pump, highpressure standpipe, rig automation, topdrive upgrade, pipehandling equipment, leg extensions, modern solids-control equipment, choke manifold upgrade, and safety enhancement installations are examples of potential upgrades that could improve the performance of older, smaller rigs. In the long term, the upgraded rig capabilities would translate into lower drilling costs and enhanced safety. In the short term, sharing of rig-team personnel would allow optimum performance from the existing older equipment. Addressing the Big Crew Change Problem. The Big Crew Change refers to the combined problem of an aging E&P workforce with an average age of 47 years, a large number of retiring professionals, and only a small number of younger professionals to replace the retiring workers18. It has been estimated that a projects net present value can be reduced by 10% with only a 5% deviation in project timing or cost19. Development project economics and productivity gains could become vulnerable due to this loss of experienced personnel, setting in motion the Big Crew Change cycle: poor project economics translates into lower capital budgets, fewer projects, and less demand for skilled workers18, 20. The personnel-sharing aspect of a rig-sharing agreement could become a necessity for operators to meet challenging staffing requirements and growth goals during the coming years.

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Conclusions The long-term sharing of a MODU, human resources, and lessons learned to the mutual advantage of three operating units and one drilling contractor allowed improved exploration drilling performance. The experience gained from this rigsharing arrangement leads the author to conclude: 1. Sharing of a rig, wellsite personnel, and technical professionals across multiple exploration drilling projects during a continuous program can achieve benefits which would not be possible without a rig-sharing agreement. The costs of rig upgrades, contracting, acceptance testing, and mobilization/de-mobilization can be shared and distributed. Other benefits include: documented efficiency and continuous-improvement cost savings, assured timely rig slots for internal drilling program, manpower level loading, and an opportunity for HSE excellence. These benefits totaled over 10% (U.S. $12 million) in cost savings to Amoco during the project. Performance improved by having a continuous program with the same wellsite personnel (even as the rig moved from operator to operator and country to country). The continuity of the wellsite supervisors, rig crew, and service personnel throughout the two-year program was unique to this project, and ensured the overall success of the individual wells. Comprehensive planning and risk assessment were key factors in the success of the program, reducing UE time and contributing an additional 10% in cost savings (U.S. $12 million). The rig-sharing concept facilitated comprehensive planning by allowing optimal manpower utilization between teams within the framework of an optimized project-timing schedule. Long-term personnel continuity and sharing of best practices helped to create a high-performance team for each well project. Rig and team sharing can allow operators to meet exploration drilling obligations with improved performance (over 20%, or U.S. $24 million in this case history), especially in areas with a limited number of fitfor-purpose rigs. Future applications of rig and personnel sharing may address the challenges of ultra-deep gas drilling, highspecification floating rig utilization, upgrading older rigs, and meeting future staffing requirements resulting from demographics and the Big Crew Change.

References
1. Talbot, J.R.A.S.: Multi Operator Programme for Deep Water Drilling, paper IADC/SPE 35080 presented at the 1996 IADC/SPE Drilling Conference, New Orleans, Louisiana, 1215 March. Bin Ismail, H., David, K.K.E, and Carson, P.R.: Approaches to Deepwater Drilling, paper IADC/SPE 37159 presented at the 1996 SPE/IADC Asia Pacific Drilling Technology Conference, Kuala Lumpur, Malaysia, 911 September. Gaddy, D.A.: Rig clubs help alleviate Caspian Sea drilling shortage, Oil & Gas Journal (8 November 1999) 63. Smith, J.R., Cade, R.S., and Gatte, R.D.: Integrating Engineering and Operations for Successful HTHP Exploratory Drilling, SPE Drilling and Completion (December 1997) 238. Thorogood, J.L., Jackson, M.D., and Thorsen, O.H.: Delivering World Class Exploration Drilling Integration of Design, Planning and Execution, paper IADC/SPE 59205 presented at the 2000 IADC/SPE Drilling Conference, New Orleans, Louisiana, 2325 February. Low, E. and Seymour, K.P.: The Drilling and Testing of HighPressure Gas Condensate Wells in the North Sea, paper IADC/SPE 17224 presented at the 1988 IADC/SPE Drilling Conference, Dallas, Texas, 28 February 2 March. Seymour, K.P, Stuart, C., Lorenson, P., and Mackay, A.: The Drilling of a High-Pressure, High Temperature Well in the North Sea Using 20,000-psi Well Control Equipment, paper OTC 7337 presented at the 1993 Offshore Technology Conference, Houston, Texas, 36 March. Cassidy, S.D.: Solutions to Problems Drilling a HighTemperature, High-Pressure Well, SPE Drilling and Completion (December 1995) 238. Elliott, G.S., Brockman, R.A., and Shivers III, R.M.: HPHT Drilling and Completion Design for the Erskine Field, paper SPE 30364 presented at the 1995 Offshore Europe Conference, Aberdeen, Scotland, 58 September. MacAndrew, R. et al.: Drilling and Testing Hot, High-Pressure Wells, Schlumberger Oilfield Review (April/July 1993) 15. Seymour, K.P, and MacAndrew, R.: Design, Drilling, and Testing of a Deviated HTHP Exploration Well in the North Sea, SPE Drilling and Completion (December 1994) 244. Moomjian, C.A.: Drilling in the late 90s: A whole new ball game, IADC Drilling Contractor (July/August 1998) 16. Newfield to pursue ultra-deep well, Houston Chronicle (15 November 2003) 2C. World Oils Marine Drilling Rigs 2002/2003, World Oil (December 2002) 65. Geyelin, J.L. et al.: Completion of Aconcagua Field With a Dual Derrick Drilling Unit, paper SPE 84345 presented at the 2003 SPE Annual Technical Conference and Exhibition, Denver, Colorado, 58 October. Piedras, J. et al.: Canyon Express: Design and Experience on High-Rate Deepwater Gas Producers, Journal of Petroleum Technology (June 2003) 50. Camden Hills: A World Record Achieved Through Innovative Solutions, supplement to Harts E&P (April 2003) 3. Krome, J.D. and Survant, J.W.: Practical Preparations for the Big Crew Change, paper SPE 77402 presented at the 2002 SPE Annual Technical Conference and Exhibition, San Antonio, Texas, 29 September2 October. Cambridge Energy Research Associates: The Demographic Wall (February 2001). Cambridge Energy Research Associates: Market Volatility Slows Investment by Oil and Gas Companies press release, Houston, Texas (10 February 2003).

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Acknowledgments The author wishes to thank BP p.l.c. for permission to publish this paper. The author is also grateful for the help and cooperation of members of the Amoco E&P Technology GroupDrilling manpower resources team, Amoco North Sea Drilling Group exploration teams, EniAgip, and crew of the Transocean Nordic.

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SI Metric Conversion Factors F x (F 32)/1.8 ft x 3.048* E 01 gal x 3.785 412 E 03 in. x 2.54* E +00 lbf x 4.448 222 E +00 lbm x 4.535 924 E 01 psi x 6.894 757 E +00 *Conversion Factor is exact.

= C =m = m3 = cm =N = kg = kPa

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