An Introduction to Marine Drilling - Malcolm Maclachlan

INTRODUCTIONTO

MARINE DRILLINGMalcolm MaclachlanMNI, Master Mariner

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THE AUTHOR

Malcol~~M~~~achl~~,ur~s bor$mDover, England in 1947 and first workedi:i,,, ,,,,,,,at sea attheage offourmen when he gained employment illegally on a cross-,~:~,,,~,~.~,,:~~,~, ; 1 , , a,,,~ .: ,,,, ,i ,,,., ~, ,,channel ferry through a misunderstanding with the ships master. Aftertraining for three, years on the cadet ship HMS Worcester he sailed as mid-shipman with the Blue Funnel Line and gained his second mates certificateat theage of20. Heserved as anavigating officer with several deep sea andcoast@ shipping companies, and after qualifying as a Master Mariner heldcommand, of seven, containerships whilst still in his early thirties. He spent ayear lecturing in navigation and seamanship at Leith Nautical College beforejoining the British drilling contractor Houlder Offshore Limited as a controlroom,operator/mate. He served on the semi-submersible drilling rigs HighSeas, Driller and Kingsnorth UK in the North Sea and aboard the dynami-cally-positioned diving support vessel Orelia in the Persian Gulf war zone.He has been writing and cartooning for many years and became a full-timemarine writer and illustrator in 1986, when he was a casualty of the wide-spread cut-backs in the drilling industry caused by the slumping oil price. Hehas contrtbuted many articles, short stories and drawings to various marinejournals and is currently writing a novel set on a North Sea rig. Married witha young family, he lives in Biggar, Scotland.

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CONTENTS

FOREWORD ......................................................................... 7PREFACE .............................................................................. 8ACKNOWLEDGEMENTS ....................................................... 9

Chapter 1: The Development of Marine Rotary Drilling 11Hand-dug wells .................................................................... 11Spring pole drilling ................................................................ 11Cable tool drilling ................... .: ............................................ 13Rotary drilling ..................................................................... 18Marine drilling ..................................................................... 2 0

Chapter 2: Preparations for an Offshore Drilling Operation 2 5The parties involved .............................................................. 2 5

The well owner ................................................................. 2 7The operator .................................................................... 2 7The drilling contractor ....... .... ............................................. 2 8The drilling contract ........................................................... 3 0Supply and service companies ............................................... 31Government departments .................................................... 35

The costs of drilling offshore ................................................... 3 6Well types ........................................................................... 4 2Petroleuti geology ................................................................ 45

The formation of hydrocarbons ............................................. 4 6Migration of hydrocarbons ................................................... 4 6Reservoirs ........................................................................ 4 7Anticlines ........................................................................ 4 7Fault traps ....................................................................... 4 7Stratigraphic traps ............................................................. 49,Unconformity traps ............................................................ 4 9

Exploration methods ............................................. .... ............. 4 9Offshore surveying techniques ................................................. 53

Magnetic surveys ............................................................... 5 3Gravimetric surveys ........................................................... 5 3Seismic surveys ................................................................. 53

Drilling rig site surveys ........................................................... 55

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Chapter 3: Offshore Drilling Platform Types 57Fixed drilling platforms .......................................................... 57

Fixed platforms with floating drilling tenders G............, .............. 59Self-contained fixed platforms .............................................. 5 9

Mobile drilling rigs ................................................................ 61Submersibles .................................................................... 63Self-elevating (jack-up) platforms .......................................... 6 4Semi-submersibles ............................................................. 7 1Drill ships ........................................................................ 81Barge rigs ........................................................................ 85

Chapter 4: The Offshore Rig and its Equipment 8 9Basic rig components ............................................................. 8 9

The drill floor ................................................................... 89The derrick ...................................................................... 9 0The drawworks ................................................................. 9 2The blocks, hook & drilling line ............................................ 9 4The swivel, kelly & rotary hose ............................................. 9 6The rotary table ................................................................ 9 9The drilling fluid circulation system ..................................... 102

Drill string motion compensation ........................................... 112Downhole bumper subs ..................................................... 113Surface drill string motion compensators ............................... 114

The power plant ................................................................. 120Drilling equipment .............................................................. 123

API specifications ............................................................ 123Drilling bits .................................................................... 123Drill pipe ....................................................................... 130Drill collars .................................................................... 134Stabilizers & reamers ................................................ . ....... 136The drill string & bottom hole assembly ................................ 139Tubular handling tools ...................................................... 139Other drilling tools ........................... . ............................... 143

Sub-sea equipment .............................................................. 145The temporary guide base ................... .:.. ........................... 145The permanent guide base ................................................. 146The WellheadJcasing hanger system ...................................... 146

Well control & the blow-out preventer stack ............................. 148The marine riser ................................................................. 157

The riser tensioning system ................................................ 162

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Chapter 5: Drilling OperationsRunning in the hole ............. ................................................Drilling ahead .......... ..........................................................Making a connection ...........................................................Tripping ............ ...............................................................Running & cementing casing .................................................Directional drilling ........................ ......................................Drilling hazards . .:.. ........ .....................................................

Stuck pipe ......................................................................Fishing ..........................................................................Lost circulation ...............................................................Kicks & blow-outs ........... ................................................Hydrogen sulphide ...........................................................Weather & ice .................................................................

Drilling operational sequence ................................................Moving rig onto location & running anchors ..........................Rigging up .....................................................................~Running the temporary guide base ......................................Spudding in & drilling 36 hole ...........................................Running 30 casing & landing the permanent guide base ..........Cementirig the 30 casing ..................................................Drilling 26 hole ..............................................................Running KL cementing 20 casing & running the 18V4 wellhead .Running the 1g3/4 BOP stack & the marine riser ....................Drilling 17% hole ..........................................................Logging .........................................................................Running & cementing 133/8 casing ......................................Making a gyro survey ........................................................Drilling 12% hole ..........................................................Logging .........................................................................Running 8~ cementing 9% casing ......... .:. . ..........................

, Displacing the hole to oil base mud ......................................Drilling 8% hole to total depth ..........................................Coring ...........................................................................Logging .........................................................................Running 8z cementing the 7 liner .......................................Well testing ....................................................................Well stimulation ..............................................................

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Plugging & suspending or abandoning the well ....................... 227Contingencies & weather ................................................... 227

Chapter 6: Marine Operations 228Basic rig stability _ ............................................................... 228

Displacement & the principle of flotation .............................. 228The centre of gravity ........................................................ 230The centre of buoyancy ..................................................... 230Reserve buoyancy ............................................................ 230The effect on the CG of adding, removing or shifting weights .... 230The righting lever ............................................................ 230The metacentre ............................................................... 234Ballasting & free surfaces .................................................. 234

Ballasting conditions ........................................................... 236Rig structure & safety maintenance ........................................ 237Lifesaving & firefighting equipment ........................................ 238Work permits .................................................................... 239Standby boats .................................................................... 240Rig-moves ......................................................................... 242

Navigation and pilotage .................................................... 243Towage ......................................................................... 244Approaching the location .................................................. 245Running anchors ............................................................. 247Anchor types .................................................................. 250Anchor patterns .............................................................. 251Pre-tensioning ................................................................. 252The moorings during drilling .............................................. 253Pulling anchors ............................................................... 253

Dynamic positioning systems ................................................. 255Rig supplies ....................................................................... 259Helicopter operations .......................................................... 263

Chapter 7: Rig Personnel & Training 2;sSemi-submersible rig personnel .................................. ............. 265Jack-up rig & drill ship personnel ........................................... 279Rig personnel training ......................................................... 280

GLOSSARY OF MARINE DRILLING TERMS 284

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FOREWORD

Over the years, I have seen many changes in the industry from the period of growthin the 1970s to our present day recession, I have had .the privilege to witness firsthand some outstanding advances in techniques and technology and yet for me atleast, drilling remains something of a mystery. Infamous for its jargon, it is as com-

plex as it is fascinating. Itis therefore a particular pleasure to discover, after so manyyears, a book which is both readable and comprehensive, and which succeeds in reve-sling to me, as I am sure it will do for all its readers, whatever their level of interest,

something of the black art of drilling.

It also gives me pleasure to think that much of the authors knowledge arises fromhis connection with Houlders. First as a cadet on the Worcester established atIngress Abbey on the Thames, my Grandfathers home and more recently during histime offshore with the company.

Houlder Marine Drilling is the offspring of the shipping company founded by myGrandfather in 1848. Interest in drilling arose in about 1973 as the result of a chanceconversation with a Norwegian shipowner who introduced me to Bernard Larsen,another shipowner, who I believe to have originated the conceptual design for thefamous H-3 which is illustrated on page 29.

Just as the author learned from Houlder, so Houlder in turn had learned from theestablished drilling industry which in turn had learned from the Moho project. Thiswas to discover by drilling, the composition of the core of the earth. As much as pos-sible was to be drilled through water, and I think that the drillship owes more to theMoho technology than to the offshore shallows of Louisiana.

Houlder in turn claims.to have originated theidea of transporting a semi-submersible drillingrig on the deck of another ship. Page 39 showsthe High Seas Driller being carried by thismethod. I conceived the idea and made the pre-liminary calculations while waiting in the Boar-droom of the China National Oil Company inBeiching!

I think overall that Houlder has traditionallyprospered by innovation and of the innovativeapproach used for the layout and content of thisbook is anything to go by, it should be an out-standing success.

ChairmanHoulder Offshore Limited

PREFACE

This book wasconceived during the ,authors own quest offshore for theanswers to a multitude of questions - questions that are inevitably asked byany curious green hand or boll weevil in his first wondrous weeks aboarda semi-submersible or jack-up rig.

In a complex engineering environment such as an offshore drilling rig onlyso much can be deduced from a silent observation of the strange and mysteri-ous procedures, and invariably one must repeatedly seek explanations. It isnot always easy, however, or diplomatic, to ask a driller to explain theintricacies of his art when he is attempting to make a speedy round tripunder pressure from a cost-conscious company man. Nor is a wearyroughneck or derrickman likely to want to spend an extra half hour in themessroom after his tour describing the arduous work he has just been doingfor a whole half day. The drilling jig-saw puzzle can therefore take a consid-erable time to piece together, and in retrospect I wish now that I had had thebenefit of a book on marine drilling to guide me through my first tentativetrip offshore.

The simple aim of this book, then, is to explain to the new rig hand, to theoffshore job applicant, to those on the periphery of the offshore industrywho may never have the chance to go out to a rig and see for themselves, andto the interested layman and student on the beach the main operations ofthis fascinating industry.

It does not pretend to be a comprehensive or learned study of the oil exp-loration business, nor does it masquerade as an instructional manual of dril-ling technology; it is hoped merely to throw a little truthful light on some ofthe operations of an industry which all too often is portrayed by the massmedia as being simply a matter of grim and grimy men heaving and slitheringon a wet deck as they struggle to latch massive wrenches onto a steel pipe.That is one interesting facet of marine drilling, but there are many morewhich are rarely seen by,those not fortunate enough to witness the workingsof an offshore rig..

For any technical errors or omissions I can only apologise to~the marinedrilling fraternity and ask for their forbearance.

Biggar, ScotlandMarch 1987

ACKNOWLEDGEMENTS

Thanks are due to Adrian Rose, safety officer, and Ian Edwards, bargeoperator, both of Houlder Offshore, for their helpful clarifications; to JimLangley of Brown Brothers for information about motion compensators,and to Gavin Strachan, marketing manager of Atlantic Drilling, for his lucidexplanation of drilling contracts. I must also acknowledge the generosity ofPhillips Petroleum and BP, who provided many illustrations, and the manycompanies who sent me research material. Special thanks must also go to mywife Lesley for her encouragement and countless cups of coffee, and toDavid Gallimore of Daytons Publishing who had the courage to back myide,a form beginning to end.

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CHAPTER 1:THE DEVELOPMENT OF MARINE ROTARY DRILLING

Since his earliest days, man has dug holes in the earths crust in his search forwater, salt and other minerals. Over the centuries his digging techniqueshave changed and become more efficient, culminating in the method todayknown as rotary drilling which is almost universally used in oil and gas explo-ration, both on land and offshore. Rotary drilling with a land rig is a complexbusiness. On an offshore rig it is even more involved, and at the same timeis made hazardous by the hostile elements. An appreciation of the innova-tive way in which oilmen have overcome their difficulties can be gained bylooking first at the earlier, simpler drilling methods which led to the develop-ment of rotary drilling.

HAND DUG WELLSThe age-old traditional method of digging a water well by hand was for oneman to pound a hole in the ground with a sharp implement like a big chisel.As the hole got deeper and the cuttings started accumulating at the bottomof the hole, the digger had to load them into some sort of container which anassistant at the top of the hole then pulled out. Digging had to be temporarilyhalted for this to be done and the well-digging operation was slow and tedi-ous.

The walls of the hole had a tendency to cave in as it got deeper, so to pre-vent this the well had to be lined with some material such as wood or brickas it progressed downwards. These materials were the forerunners of whatis now known as casing.

SPRING POLE DRILLINGHand-digging was slow and dangerous for the digger, especially as he dugthrough a hydrocarbon-bearing zone and oil or gas started seeping into the

, hole. A safer and more efficient mechanical method of digging was soughtand, according to ancient Chinese manuscripts, one was in use in China asearly as the 3rd Century AD. These manuscripts described a method whichwas really only a logical development from hand-digging. The Chinese dril-led wells for brine using a percussion system in which a heavy, chisel-shapedbit suspended from a rope was jerked up and down by relays of men bounc-ing on a spring-board, thus progressively pounding the hole deeper.

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The Development of Marine Rotary Drilling

A variation of this method used in Europe and America in the eighteenthcentury was called spring pole drilling. A large metal bit was suspendedfrom a flexible wooden pole by a long rope and allowed to drop to the bot-tom of the well. The bit chewed briefly into the formation, like a man stab-bing with a chisel, before the springing pole bounced it back up. As this hap-pened the length of the rope would be extended a little by the driller con-trolling it at thesurface, so that the bit struck with an unvarying force on eachsuccessive blow and chewed in a little deeper on each downward stroke. Asthe bit was reciprocated up and down in this manner the rope twisted slightlyand varied the position of each blow on its descent, resulting in a roughly cir-cular hole being dug.

ring pole drilling was the earliest form of mechanised drilling.

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Large quantities of cuttings naturally collected at the bottom of the hole,and as this was almost as narrow as the bit, the cuttings had to be removedby a self-shutting container, called a bailer, which was periodically loweredto the bottom.

When this method was eventually introduced to western countries ironbits were used, drilling holes of only 2% to 4 inches (7 to 10 centimetres) indiameter. Wells were seldom more than 240 feet (75 metres) deep, but thereis evidence of a brine well being drilled to just over a thousand feet (305metres) in the USA in the early 1840s. To hold back the wall of the hole, thisAmerican well was cased with lengths of wood shaped into half tubes andwrapped with twine. The Chinese, on the other hand, cased their wells withhollow bamboo sticks, and are said to have drilled to depths of more than athousand feet by this method.

Spring pole drilling was limited by the weight that the wooden pole couldrepeatedly lift without breaking, and of course this weight included that ofthe rope, which got progressively longer with the depth of the well. If therope broke and fell to the bottom of the well with the bit or the bailerattached,, the driller had to improvise a method of retrieving, or fishing, forthe fish, as the lost equipment was termed. Various gadgets weredeveloped for this purpose and thus the forerunners of todays efficient fish-ing tools were devised.

In the early part of the nineteenth century, whale oil was the most com-monly used fuel for lighting lamps in America and Europe. The US, Britain,Norway and many other countries had large fleets of whalers, and othertypes of oil were not considered commercially important. In America, rockoil was frequently found seeping into brine wells drilled near salt creeks,and at first it was regarded as no more than a nuisance. However, the busywhaling fleets quickly depleted the stocks of whales and it was recognisedthat sooner or later another source of lamp fuel would be required. Thevalue of the black oil that was often found seeping out of the ground in manyplaces was eventually realised, and this rock oil was henceforth harvested.However, it was to be some years before oil was specifically drilled for.

CABLE TOOL DRILLINGThe early nineteenth century saw the rapid mechanisation of many indus-tries in the western world, and about 18.50 a revolutionary new method ofdrilling called cable tool drilling was introduced. It utilised a steam enginewith a crank, giving a long, regular, reciprocating motion to a heavy metalbit on the end of a rope, and it was found to be much more efficient than theold percussion method that utilized a spring pole. The engine was also used

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the hoist the drilling, bailing and fishing tools in and out of the well, and theprocess of drilling a well thus became much faster and more efficient and wasalmost completely mechanised, just as it is today.

As the cable tool method gained wider favour, a wide range of ingeniousdevices were developed to overcome problems encountered and make thejob of drilling easier and safer. The now familiar drilling derrick, then madeof wood rather than steel, but tall enough to house lengths of drilling, bailingor fishing tools, was introduced. Much heavier bits and more robust equip-ment could now be used with the steam power, and wire instead of fibre ropeenabled deeper wells to be drilled. Iron casing, replacing the old woodensheathing, could now be driven into the hole length by length as the well gotdeeper, so as to retain the wall and to make it easier to extract any mineralsthat were eventually found.

An early cable tool rig. These rigs were widely used well into the 20th century and are still foundin a few places in America.

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Cable tool rigs were particularly useful for drilling medium-hard rocks,but the softer rocks encountered could not withstand the spudding, or jab-bing., action of the bit, and holes often caved in or allowed too much waterto seep into them for drilling to continue. A new type of cylindrical steel cas-ing was developed to replace the old iron type, and if caving occurred,lengths of it were screwed together and lowered into the hole to seal the wallof the hole. When the casing reached the bottom, drilling then continuedusing a slightly smaller bit that could just run through it. As each new prob-lem zone was encountered, so more casing was run inside the last string,

and a correspo,ndingly smaller bit was used to drill out the next section. In \those days oilmen were not blessed with the huge variety of tools that nowenable them to overcome nearly every kind of downhole problem, so if thecable tool well encountered too many hitches, and so many casing runs hadto made that the bit got too small to drill with, the hole would have to beabandoned, often before reaching its target depth. The method was, there-fore, slow and inefficient, but to the early pioneers of the oil industry it rep-resented the pinnacle of drilling technology at that time.

One of these pioneers, a retiredrailroad conductor named ColonelEdwin L. Drake, is now famed for supervising the drilling, between Juneand August 1859, of a cable tool well at Oil Creek near Titusville, westernPennsylvania, USA, that is considered to have founded the oil industry as wenow know it. Drake did not actually own the well; a New York lawyer namedGeorge H. Bissell owned the land it was drilled on, and his was the idea todrill specifically for oil, since the area had been noted for its surface seepagesof oil. In any event, the Drake well, as it is now known, successfully locatedan oil reservoir at a depth of only 691/z feet (21 metres), and oil flowed at arate of about 19 barrels a day, or 3,000 litres, which was phenomenal forthose days. Bissell became a founder of the Pennsylvania Rock Oil Com-pany, and further successes with cable tool drilled wells made that state theleading oil producing area for the next fifty years. Its lead stimulated thegrowth of the drilling industry in other areas, notably in Canada, Poland andCalifornia. From the oilfields of these areas drillers took their knowledge ofthe newly successful cable tool drilling techniques all over the world, and theworldwide drilling industry thus began.

By the turn of the twentieth century, after fifty years of continuous use anddevelopment, it was possible to drill wells by the cable tool method down toabout 3000 feet (1000 metres) in favourable conditions. The heydey of themethod, however, was the period from 1900 until the great economic depre-ssion of the 1930s and many of the best improvements came during thistime. Steel derricks replaced the old timber structures, and bits becamelarger and tougher. The most important development, however, was the

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introduction of the cementing of casing. This was first done in 1903 whensome liquid cement was dumped from a bailer into a well and a string of steelcasing was lowered into it. A few days later, when the cement had set, thehard cement inside the casing was drilled out. The cement in the annulus bet-ween the casing and the wall of the hole was found to have sealed off a zoneof water in the formation, and it had also anchored the casing to the wall ofthe hole.

This success was further improved on when in 1910 a procedure was intro-duced for pumping a measured amount of liquid cement down a hole. A vol-ume of cement was held between two wooden plugs, spaced one above theother, and was pumped down the inside of the casing, round its bottom end,and up the narrow annulus outside, where it was left to set hard. Althoughall the cement was expelled from the shoe at the bottom of the casing, theplugs were retained inside it, but these were drilled out when drillingresumed with a smaller bit. Again it was found that the cement in the annulusbetween the casing and the hole had set hard, and henceforth in this mannereach section of casing was run into the hole and cemented to surface, thusovercoming many of the formation difficulties previously encountered. Bas-ically, the same procedure is still used today in cement jobs, and one of itsseveral virtues is that it allows wells to be carefully planned in advance fromstart to finish in fields where the formation types are known.

By 1918 the worlds deepest well, drilled by the cable tool method, was7,386 feet (2,251 metres) deep,. and the technology of cable tools nearly atits zenith. It was possible to spud, or start drilling, one of these wells witha 24-inch (61 cm) diameter bit and, if necessary, cement up to sevenseparatestrings of casing, from 20-inch (51 cm) diameter down to 5-inch (12.7 cm), asproblems in the well were encountered. However, the rotary system, inwhich the drill bit was rotated under power on the end of a steel tube insteadof being reciprocated on the end of a wire, was also being developed, and bythen had become the preferred method for drilling holes deeper than 4,000feet (1,219 metres). It was recognised that the great disadvantage of thecable tool method was that there was no means by which a drilling fluid couldbe circulated so that cuttings could continuously be brought to the surface,and so that the wall of the hole, together with any oil, water or gasin it, couldbe held back. .

During the 1920s a type of combination rig was developed which couldemploy both cable tool and rotary methods at different stages of the wellwhen it was thought profitable to do so, but the rotary type of rig was by thistime rapidly gaining favour. Up to 1930 there were still far more active cabletool rigs than rotary rigs, and that was the situation obtaining when the pre-

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The Development of Marine Rotary Driumg


war depression drastically reduced drilling activity all over the world. Bythat time the deepest well yet drilled by the rotary method was just over10,000 feet (3,050 metres) deep.

When drilling activity resumed after the depression the industry hadbecome leaner, fitter and more competitive, and deeper wells were requiredto find and exploit new oil reserves to meet the worlds revived thirst forenergy. Cable tools, which could rarely drill more than 60 feet (18 metres) aday, had virtually reached the limits of their technology, but rotary rigs,which could, in favourable conditions, drill 2,000 feet (609 metres) in eighthours, seemed to offer unlimited scope for improvement. As a result, after1930 cable tools never recovered their previous popularity, and they weregradually superseded by the rotary system. The deepest cable tool well evercompleted was the Kesselring No. 1 NYS Nat. Gas. Corp., completed in1953 at 11,145 feet and taking over 2% years to drill. Today the cable toolmethod is rarely used.

ROTARY DRILLINGRotary drilling evolved from the carpenters method of boring a hole inwood with a rotating tool which itself flushed out the cuttings. The derrick,initially introduced for cable tool drilling, was now employed as a simplecrane from which a hook, suspended from a block and tackle, was moved upor down, by a wire running over a hoisting drum called a drawworks. The bitwas secured to the bottom of a string of steel pipes, and was rotated by powertransmitted by an engine on the surface. A rotary drilling machine waspatented in 1845 but the system was first used in Texas in the early 1890s inan attempt to solve the soft rock problem that had plagued cable tools there.Up until the end of the 19th century, cable tools were still favoured for mostdrilling situations.

In January, 1901 Anthony Lucass well at Spindletop, near Beaumont,Texas, was completed with a rotary rig after several attempts to complete itwith cable tools failed due to running quicksand. The quicksand was easilyheld back with casing when the rotary equipment was brought in and the wellfinally blew out, producing 84,000 barrels of crude oil a day from a depth ofa little over 1000 feet. The gusher blew all the drill pipe out of the 60-foothigh derrick and shot more than 200 feet into the air above it, provingbeyond doubt the value of rotary rigs.

On the strength of its Spindletop success rotary drilling soon held sway inthe US Gulf coastal areas and was competing strongly with the cable toolmethod elsewhere. Although the early equipment was radically different tothat used today, the concept of rotary drilling is fundamentally unchanged.

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One of the most significant developments was the introduction of the rollingcutter bit, first made and used by Howard Hughes in 1909. There have beenmany improvements made since then to Hughes original design, but hisbasic concept remains the same today. Modern metallurgy and componentsnow ensure that bits last many times longer than in those days, and there arenow variations on the basic design to suit all types of formation. Bit develop-ment has recently been aimed at making the bit match the characteristics ofthe rock it is drilling, but many bits are designed to cope with a range of var-ious rock types.

Most other items of rotary drilling equipment have also undergone greatchanges since the pioneering days of the method and vast amounts of moneyhave been spent by the oil companies on developing new techniques andideas to improve the efficiency of drilling. Drilling fluids have been formu-lated for use in every well condition, and means have been evolved for alter-ing the fluids chemical and physical properties as necessary during the circu-lation process. Fluid circulating systems now have greater capacities and canbe more precisely controlled and powerfully pumped. Metallurgicalresearch has discovered ways of combatting corrosion in drilling tubularsand in withstanding the stresses that are imposed from great depths, temper-atures and pressures. Downhole equipment has been developed to meetevery conceivable need, permitting complex tasks to be performedthousands of feet down a narrow borehole.

A tool inside a borehole can only move in three fundamental directions:up, down and round. On the face of it, therefore, drilling holes in the earthscrust might appear to be a simple job that has been made easy with modernequipment. On the contrary, it remains a highly complex operation demand-ing grit, determination and much technical expertise and a great deal ofmoney, and nowhere is this more the case than offshore.

MARINE DRILLINGAlthough land drilling for oil has been done for well over a century, it is onlysince the Second World War that marine drilling has really been in existenceas an industry in its own right, and many of the practices now used offshoreevolved only in the last twenty years.

The first offshore wells, however, were a shallow well drilled over thewater from a pier at Santa Barbara in southern California in 1897, and a welldrilled in 1911 in Caddo Lake, Louisiana, where a steam-powered rotary rigwas erected on a wooden, bottom-supported platform.

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In the 1930s techniques were introduced for drilling in the swamps ofLouisiana, USA, in Lake Erie in Canada, and in the large-scale develop-ments then taking place in Lake Maracaibo, in Venezuela. The first floatingrig was a simple barge used in 1933 to drill in the bayous of southernLouisiana. All subsequent marine drilling, which was at-first confined toswamps and lakes, was carried out using ordinary land drilling equipmentmounted on simple, flat-topped, flat-bottomed barges.

As the US oil industry rapidly expanded following the end of the SecondWorld War, so it set its sights on drilling in the seas off the US Gulf states,necessitating the development of special craft capable of supporting drillingequipment in a sometimes hostile environment. The first seagoing mobileoffshore drilling unit of any kind was a submersible platform that drilled ina water depth of only 20 feet in 1948, while the first floater was a covertedUS Army wartime transport barge that had a rig fitted on an overside can-tilever. Many other submersibles were built for use in the US Gulf area,these having decks supported by tubular, bottle-shaped columns fittedabove pontoons which could be ballasted like those of a modem semi-sub-mersible. These platforms were, in fact, the direct descendants of the mod-ern semi, although some of them bore little resemblance to todays heavy-duty, harsh environment units.

The next development after submersibles came in the form of self-elevat-ing barges that had tall legs on which the drilling platform could be jacked upto sit well clear of the water, the feet of the legs resting in or on the sea bed.These craft, of which the first was built in 1954, evolved from floating docksthat were used by the US army during the War. The first crude jack-upunits were used initially in the shallower parts of the Gulf of Mexico and theArabian Gulf, but the designs grew steadily more sophisticated with theincreasing demands of the industry for oil from deeper water, eventuallyproducing units with legs 300 feet high. However, this was still not highenough.

After the early makeshift barges and submersibles, converted ships wereused to support drilling rigs, but as exploration moved out into deeper water,so fixed platforms were developed that could be towed into position andsunk so that they rested squarely on the drilJing location. At first these, likejack-up units, were only used in relatively calm and shallow waters near thecoast, but larger and stronger platforms were later built for the deeper andless tranquil waters further offshore.

In 195.5 the first well was drilled by a vessel on which a rotary rig wasmounted and by 1957 a further milestone was reached when a well was dril-

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Mobile rigs of twjack-up.

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led by a drill ship in 100 feet of water. The equipment used on these occa-sions was the most advanced then available, but it would look primitivealongside the sophisticated offshore drilling units operating today. The shipsand barges then used could only operate in a maximum depth of 600 feet,while submersibles were restricted to 90 feet. By 1960 about 70 barges andconverted ships were being used for offshore drilling, much qf this workgoing on off California.

The 1960s saw the introduction of the first semi-submersibles, which couldeither sit on the bottom like a submersible or float like a drill ship. About 30of these units were built during the decade, of many different types. Thenumber of jack-up rigs quadrupled at the same time, and the new designsstarted to utilise the canted legs that are now a common feature of manyu n i t s .

Purpose-built ocean-going drillships with large storage capacities for fuel,drilling fluids and other supplies were also developed for use in remote areasfar from supply bases. They were built with their own propulsion so that theycould move themselves between locations and dispense with the need fortugs. In the 1960s drillships were first fitted with one of the most importantdevelopments in deep-water drilling technology: dynamic positioning (DP)systems. These systems enabled drillships, and later, semi-submersibles, tomaintain position with the aid of computer controlled thrusters thatresponded to the commands of position monitoring inputs and dispensedwith the need for anchors. However, the systems were, and still are, expen-sive and the vessels using them relatively few.

The upward surge in the price of crude oil and the availability of offshoreconcessions and exploration licences from many countries prompted a fran-tic spate of rig-building in the 197Os, when an average of 30 drilling unitswere built each year-more than at any time before or since. This brought theworlds offshore rig fleet up to over 500 units, and with this increase camemany improvements in equipment and operating techniques, including theuse of surface motion compensators.

Having reached a level of about 750 units of which many are surplus torequirements, the 1980s have seen a fall in the number of drilling units built,along with a fall in the price of oil. Offshore technology has, however, kept,,moving ahead. Jack-ups with legs 600 feet long are now able to drill in 450feet of water, while dynamically-positioned semi-submersibles can nowoperate in 10,000 feet depths. Offshore drilling is going on in nearly everymaritime area of the world, and seems likely to continue and expand as theoil price again rises. Even in the Arctic wastes drilling is carried out from

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The Development of.Marine Rotary Drilling

man-made islands - the latest type of submersible - whose huge caissons arefloated into position, ballasted and sunk, and fortified against the powerfulnatural forces within the ice cap. Sea-bed cores have been recovered by adrill ship from a depth of 23,000 feet and experimental well drilling has beenconducted in water 13,000 feet, although no commercial oil drilling has yetbeen carried out in such depths. However, the technology is available toexploit oil reserves in the deep oceans well away from continent&l shelves; itonly requires a stronger demand for oil at a commercially viable price tostimulate the drawing board ideas into action.

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CHAPTER 2:PREPARATIONS FOR AN OFFSHORE DRILLIN GOPERATION

Despite the popular notion of the freedom of the high seas, drilling anoffshore well is not simply a matter of an oil company bringing a rig onto achosen location and starting to make a hole in the sea bed whenever andhowever it pleases. When an oil company considers that money is worthspending on exploration - and this depends largely on the current marketprice of crude oil-it must first decide, on the basis of available geological evi-dence, in what part of the world it will explore, such as in the Pearl RiverBasin in the South China Sea, or the Davis Strait, off Canadas Baffin Island,or the North Sea. One region may be more attractive than another, particu-larly if strong incentives are offered from the host country.

After acquiring permission from the host government to carry out theexploratory work, which may take months or even years, large amounts ofmoney and time are spent in carefully examining the sub-sea geology of thechosen area for likely hydrocarbon-bearing locations. When a promisingarea has been identified by surveys and an available drilling site selected, theoil company must then go through the machinery of applying for the neces-sary permission from the controlling government authorities to go aheadwith the project. This alone can take months or, withsome governments,even years to finalise. Governments have to be sure that the project will bebeneficial to their own interests as well as those of the investors, and thesafety of the personnel involved and the marine environment has to be regu-lated by binding agreements with the oil company involved.

With an offshore well often costing between 510 million and f20 million todrill, and far more likelihood of it being a dry hole than a commercialbonanza, the viability of the well programme has to be very carefully consi-dered before large amounts of investors money are ploughed into the pro-ject. If the chances of success are calculated to be worth the risks involved,finance then has to be raised and partnerships sometimes entered into tospread the enormous costs involved. (Not every offshore well is drilled by ahuge multi-national like Shell or Mobil). Then contracts for the supply of adrilling rig and its crew, and for every conceivable item of equipment or ser-vice that will be required during the programme have to be sought. Once therig has been hired and drilling has begun at a cost to the oil company ofperhaps g60,OOO a day, time is so costly and precious that not a day can bewasted on waiting for something that should have been ordered monthsbefore. With so much at stake, the drilling rigs operation is naturally con-trolled extremely rigidly by the oil companies, which largely accounts for thefeverish and tense atmosphere often felt onboard.

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Preparations for an Offshore Drilling Operation

An operators equipment hire costs can be enormous, the drilling rig being just one of many ele-ments in a field development programme.

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THE WELL OWNERTheoretically, virtually anyone can own an oil or gas well, and private indi-viduals who invest money in insurance companies, pension funds, banks andother institutions may be unaware that they might in fact 1-e a part-owner ofone or more wells. However, in most cases the majority owner of an offshorewell is almost always an oil company, either one of the big majors who haveinterests in virtually every sector of the oil production, refining and market-ing industry, or one of the smaller independent oil companies which arepurely concerned with production and sale of oil or gas.

The independents, which number in their thousands in the US but arerelatively few in Europe, are primarily concerned with land drilling,although they have made significant contributions in the development ofoffshore areas such as the North Sea. About 80% of all the land wells in theUS are financed by independents, the remainder being paid for by themajors. These, which include household names such as Shell, Exxon (orEsso), BP, Mobil and Texaco, concern themselves mainly with offshore andoverseas operations as far as drilling is concerned, although some majors arehighly active in land drilling as well.

In many cases offshore, ownership of a well is not by a single company butby a consortium of investors which may include one or more oil companiesas well as virtually any type of firm or institution with money to invest in theproject. A typical consortium might be composed of:

Oil major A with 16.89% of the equityOil major B with 14.48%Oil independent C 8.83%Power & Light company D 4.50%Textile company E 3.0%Chemical company F 2.0%Oil major G 50.0%

Consortia often acquire rights to drill in several areas, and some may stayin existence for a number of years, while others split up after a while withvery little drilling activity to their credit.

eTHE OPERATORIf the well is owned outright by one company, then that company is knownas the operator, since it would normally operate the well during its produc-tion phase when the exploratory drilling has been completed. In the casewhere a consortium exists to finance the well, one of the participating com-panies - usually the company with the largest equity ownership - will be

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designated the operator by mutual agreement. The operator acquires therights to drill on a location and holds the various licences required, but at thesame time he shoulders the huge responsibility for the safety of the hundredsof personnel who will invariably be involved, as well as for the protection ofthe environment. The operator is, therefore, answerable to the governmentbody which regulates drilling activity in the host country concerned. Most ofthe operators in countries such as the US and Britain have formed associa-tions through which their own interests can be represented in dealings withgovernments. UKOOA, the British operators association, has about 40members, most of whom are British subsidiaries of American oil companies.

THE DRILLING CONTRACTORIn the first half of the twentieth century it was common for oil companies toown their own rigs and to drill their own wells, but nowadays most prefer, forreasons of cost-effectiveness, that specialist drilling contractors do this workfor them, both on land and offshore. Drilling contractors have the necessarymen and skills, and a vast store of drilling experience, and between themthey maintain a large fleet of many different types of rig that any operator,from a giant major to the smallest independent, can call on to tackle anytype of drilling job. Even the largest oil company, on the other hand, isunlikely to have a wide range of rig types in its own fleet.

Some drilling contractors are active solely in marine drilling, while othersown both land rigs and offshore units, which might include fixed platformrigs as well as floaters and jack-ups. Some marine drilling companies ownjust one elderly barge rig in the US Gulf, while others own large fleets ofmodern jack-ups, semi-submersibles and dynamically-positioned drillshipsthat are scattered from the Canadian Arctic to the jungle creeks of WestAfrica.

The drilling contractor might own the units he operates, or he might man-age some or all of them on behalf of other owners such as finance houses orshipping companies. Some marine drilling contractors have their roots in theshipping industry and diversified their activities into drilling when their trad-itional cargo fleets dwindled in the mid-seventies. Many others havegraduated to the offshore sector from long-established land drillingbackgrounds:

In most cases the drilling contractor has no equity interest in the well butis contracted to the well operator only to drill the well to a required depthand nothing more. Exceptions do occur, especially where an oil companyowns its own rigs, but these are relatively uncommon.

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Preparations for an Offshore D

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The marine drilling contractor might directly employ the entire crew ofthe offshore drilling unit, comprising the drilling, marine, engineering andcatering departments, or he might sub-contract some of the manning out toa crewing agency where this is to his financial advantage. When the price ofoil is low, reflected in a slump in drilling activity and the mass stacking orlaying-up of rigs, contractors need to have the flexibility in their crewingarrangements to accommodate the lower hire rates that working rigs are ableto command. The entire catering department, for example, is in many casesnowadays composed of agency personnel who are unlikely tube so well paidas the directly-employed staff of the drilling contractor.

THE DRILLING CONTRACTWhen an operator plans to drill an offshore well, he seeks tenders for the jobfrom a number of selected marine drilling contractors. Three or four monthsbefore the well is to be spudded, or begun, a telex is sent to the contractorsoutlining the well programme and its requirements in terms of the rig and,drilling equipment. On the basis of the replies from any interested contrac-tors, the operator then sends out the bid documents along with very detailedspecifications of the type and capabilities of the rig required and the equip-ment to be used for the programme. The specification contains numerousdetailed stipulations on every matter concerning the rig and its operation, allof which the contractor must be able to meet.

The drilling contractor is then able to assess his costs were he to take onthe work, and depending on market conditions he makes a bid for the con-tract, quoting a price that he thinks he can command in the prevailing indus-try climate. When the market is in his favour, this might far exceed his break-even level, but more often than not, at the time of writing, it will meanoperating at a loss. In early 1987 the break-even point for a typical modernsemi-submersibles operating costs (which exclude bank loan repaymentsand depreciation) was in the region of $18,000 a day, while many rigs of thistype were commanding day-rates of only $12,000, or even less. However, asthe price of oil rises, so rig day-rates generally rise, and semi-submersibleshave in the past obtained as much as $95,000 a day when the oil price hasbeen high. A rough guide used by some marine drilling contractors is-thatthey need approximately 10% of the capital cost of the rig to adequatelycover all their costs. Thus, when a rig has,been bought for $60 million, about$60,000 a day is needed for profitability.

The various contractors in contention for the job make their bids for thecontract and the operator evaluates all the bids on their individual economicmerit, considering factors such as past performance of a contractor, his abil-ity and integrity, his safety record and the present location of his rig and thetime needed to re-locate it.

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When a rig is being taken over by one operator after the expiry of a drillingcontract with another, the new operators responsibility normally com-mences at the time of racking, or securing onboard, of the last anchor pul-led in at the previous well site, immediately before the transit to the newlocation. It may not be in the best interests of the operator, therefore, to hirea rig that is in every other respect suitable, if it is lying at an uneconomic dis-tance from the planned drilling location. At the same time, a contractor whohas the right type of rig lying very near to the new location, and who claimshe can complete the well faster than all the other bidders, might not get thecontract if his safety record is less than commendable.

The document of hire of the rig is called the drilling contract. This per-forms the same function as a ships charter party, laying down each partysresponsibilities, but it is much more detailed, running to as much as ahundred pages or more. It stipulates, amongst other things, the rates that thecontractor will receive for each type of operation during the well prog-ramme. There will be a top rate for normal drilling operations, a slightlylower standby rate for periods when drilling has to be suspended whilstwaiting on equipment, a lower-still repair rate for periods of downtimewhen the contractors own machinery has failed, a force majeure rate forsituations out of the contractors control, such as a strike in a supply base,and a moving rate for periods in transit between two wells of the same wellprogramme. The hope of both parties, naturally, is that the drilling bit willbe on the bottom of the hole for as much time as possible.

SUPPLY AND SERVICE COMPANIESIn the course of any offshore drilling operation a large number of companies,apart from the drilling contractor, are invariably called upon to perform cer-tain specialised jobs and provide special equipment of one sort or another.The operator may directly contract these supply and service companies, justas he contracts the drilling contractor, or else the drilling contractor sub-con-tracts them, but in any event, the final cost will ultimately be borne by theoperator. Running casing, cementing, mud logging, diving, fishing (ordebris retrieval), inspection, and directional drilling are all typical serviceswhich are commonly put out to tender, while items such as drilling fluid,cement, fuel and water are amongst the essential supplies which must bereceived regularly on demand from supply bases.

There are numerous firms in the oil industry specialising in the manufac-ture of individual items of oilfield equipment or the provision of specialisthelp, and their products and services are described in four large volumes ofstandard reference catalogues which run to nearly 8000 pages in all and arefound in the toolpushers office on all rigs. Drill pipe, for example, can be

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9 .0 COMPENSATION AND REWNERATION

9.01 ilay Rates:~11 rates given ace per 24-hour day or pro rata for part of a day to thenearest half-hour, and shall apply as specified below or elsewherein this Contract, from the Commencemenr Date until termination of thisC""traCf.

a) Operating and Moving Rate: us $This rate shall be payable at all times when no other rate under thisContract applies.

b) Standby Rate: 0s sThis rate shall be payable if work shall not be capable of beingcarried out by reason of weather conditions, instructions fromCOMPANY to cease operations hereunder, the failure or non-operationof COMPANY equipment, lack of any supplies or personnel by reason ofdelays in COMPANY-provided transportation, or the failure of COMPANYto obtain such lfcences as may be required to permit CONTRACTOR tocarry oat operations hereunder in the Operating Area.

c) Repair Rate: us $The first 72 hours of repair time within each calendar month shall beat Operating Rate. Thereafter CONTRACTOR shall be paid the RepairRate for any unscheduled shut-down of the Unit, excepting periods forroutine maintenance or lubrication of the Unit and its equipment,changing of the mud-pump fluid-end parts, repacking swivels, theslipping and cutting of drill line, or pulling of drillstring toeffect repairs. If a single repair period shall Last for more than15 days after the Repair Rare is applied, CONTRACTOR shall after thattime receive only 50% of the Repair Rate.

d) Force Majeure Rate: US $This rate shall be payable during any period in which operations aresuspended because of Force Majeure, as defined in Clause 12 below.

9.02 InVOiCing

a) Within the first 10 days of each month CONTRACTOR shall submit aninvoice to COMPANY setting out the sums due to CONTRACTOR under thisContract in respect of the work carried out during the previousmonth. Invoices for re-imbursibles shall be submitted as and whenthe relevant information is available to CONTRACTOR. Invoices shallbe submitted to the address for COMPANY given io Clause 15 below.

b) COMPANY shall pay each invoice within 30 days of the date of theinvoice. If COMPANY disputes part of an invoice, the portion not indispute shall be paid within 30 days of the date of the invoice, andthe disputed element shall be paid over as soon as agreement is ,reached, wiih interest at the rate of 1.5% per mooch from the duedate of payment up to the actual dare of paymenr.

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The drilling contract is the legal document of hire ot a rig. I his IS an exrracr.

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supplied by more than forty manufacturers, while blow-out preventers aremade by over thirty firms. Whenever a problem arises with the equipmentsupplied by one of these firms, their technicians - service hands as they arecalled - are brought out to the rig to effect speedy repairs. Consequentlythere may be many personnel on an offshore drilling unit who are onlyaboard for a few days and who work for a variety of different firms.

The operator also has to have craft available to get all this equipment, andthe men who will use it, out to the drilling unit. In most areas of the worldthis means chartering supply boats for the heavier and bulkier cargoes, andhelicopters for the men and the lighter, or more urgent, small items. Insmooth-water areas, however, crews often travel by fast launch since theseare cheaper to hire than helicopters. Two or three supply boats, not neces-sarily all owned by the same company, might be chartered for the durationof the well programme, while others might be spot chartered as required ona single voyage basis. Normally one helicopter company is contracted to pro-vide a regular flight schedule out to the unit, with additional flights beingpaid for as required when extra personnel or freight have to be transported.

In~addition to hiring supply boats, the operator has to provide a safetyboat in some parts of the world, to stand by close to the rig whenever it ismanned in case of an emergency requiring its evacuation. The standby boatmay never actually be used in earnest, but it is an unavoidable expense whichmust be borne nevertheless as a condition of holding a licence to explore.

Re-locating many mobile rigs from a previous location will involve usinganchor-handling vessels. These are often dual-purpose ships that maybecome the rigs supply boats once their anchor-laying work has finished.Because of their more arduous duties, for which they need much greaterpower, anchor-handlers normally command higher rates than supply boats,and different rates again will be earned by boats in different powercategories. In a particular week in early 1987, for example, an anchor-hand-ler of 12,000+ brake horse power could earn E2,850 a day in the North Sea,while a vessel of 8,000-10,000 bhp could earn E2,650. Large supply boatscommanded around %2,50$ while smaller vessels on supply runs could com-mand a maximum of f2,400. Charter rates fluctuate wildly from week toweek according to demand and availability of vessels, and rates muchhigher, as well as much lower, might prevail according to the dictates of themarket. As far as the well operator is concerned, he usually wants his boatsto be reliable as well as cheap, and he would rather have an expensive boatthat can stay on location alongside a rig with essential supplies in badweather than a cheap but unreliable boat that delays the drilling programme.

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Rigs are constantly hungry for equipment. Top: Casing being loaded. Bo,ttom: Some of thestock of equipment on a semi-submersibles deck.


GOVERNMENT DEPARTMENTSBefore the operator can begin any offshore exploration, he must usuallyobtain permission in the form of a licence from the government in whosewaters the proposed well will be. By a United Nations convention, maritimenations have sovereignty over large offshore areas for the purposes of thedevelopment of oil and gas resources, and almost every sea in the world isdivided by the median lines of all the bordering countries. The North Sea,for example, is shared between Norwdy, Denmark, West Germany, HOI-land, Belgium, France and the United Kingdom., each country administeringa sea area roughly in proportion to the length of its own bordering coastline.

For the purpose of administration of oilfield activity and the award oflicences, offshore waters in most maritime areas of the world are divided intonumbered blocks. In the British sector of the North Sea these are defined bylines of latitude at ten-minute intervals and lines of longitude at twelve-minute intervals, making thirty blocks in each one-degree by one-degreesquare on a chart. On the British continental shelf all oil and gas explorationand production activity is regulated by the UK governments Department ofEnergy, and from time to time a number of blocks will be put up for auctionby the DEn in the hope that oil companies will make bids for the explorationand production rights on them. The DEn grants two kinds of licence, one forexploration, which in this context means geophysical surveying and bottom-sampling, and the other for production, which includes exploratory drilling.Licences are only awarded after a thorough examination of an applicantoperators proposed drilling programme and his ability to carry it out safely,as well as his survey work on the area, so that the government will be satis-fied that he will operate safely and in the best interests of the nation and itsresources.

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Part of a North Sea oilfield map. Several fields are. grouped in one area spanning the median linebetween the British and the Norwegian sectors.

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Once the operator has been granted his licence to explore and hasawarded his drilling, supply and service contracts, drilling can theoreticallybegin. However, there are usually many other official regulations to be satis-fied before he can legally bring his rig on location. While the Department ofEnergy is primarily concerned with the regulation of offshore explorationand production activity, including the operation of fixed platforms, the safeoperation of British floating vessels on the oilfields remains the province ofthe Department of Transport. The DOT is reponsible for the registry andregulation of all British ships as far as their safe manning and operation isconcerned, and as such it has an interest in all British-flag mobile offshoredrilling units, wherever they are operating. It is also the examining body forBritish seafarers certificates of competency and it decides the minimummanning scale for individual rigs, so that whatever the units operationalmode, whether drilling or in transit, and whether on a long ocean passage ora short shift of location on the same oilfield, the vessel will always be safelymanned with a properly qualified crew. This only applies to marine crew; theDOT does not make regulations governing the carriage or certification of anyother personnel onboard. The American body with broadly similar officialpowers to the DOT is the US Coast Guard, which enforces US marine regu-lations on American-flag rigs working in US and overseas waters. Mobileoffshore drilling units are, therefore, treated by government departmentslike ships in some respects, but like fixed oil installations in others, and theinterests of the different government bodies involved sometimes overlap.

THE COSTS OF DRILLING OFFSHOREDrilling an offshore well can cost ten times as much as drilling a land well,and an operators expenses might well run to $100,000 a day for 100 days ormore. In sea areas such as the North Sea or the Canadian Arctic costs areraised due to two main factors. One is the harsh operating environment,which necessitates rigs and equipment which are more robust and thereforemore expensive than those needed on land and in less hostile sea areas suchas the Arabian Gulf and Lake Maracaibo. The other is the longer timerequired for drilling the well, due partly to the harsh conditions and partly tothe need to use special additional equipment. Minimising the time spentfrom spudding to completion of the well is usually the most important fac-tor to any operator, and oil companies are normally prepared to pay what-ever is necessary to obtain the right kind of reliable equipment and servicesto get the job done expeditiously.

The overall costs of any exploratory drilling venture can be grouped underthree main headings: initial costs, equipment costs and operating costs. Ini-tial costs cover the preparatory work necessary before any drilling starts,including seismic surveying, the purchase of a licence and the annual licencerental fee.

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Top: Seismic survey ships are usually small vessels but contain a great deal of sophisticatedequipment. Bottom: A modern semi-submersible rig moving under its own propulsion on seatrials.


Seismic surveying is carried out by specialist companies who operate spe-cial seismic survey vessels and sophisticated equipment and employ highlytrained seismologists and geologists. Although it is quicker and cheaper tocarry out a geophysical survey over the sea than on land, it is still very expen-sive, and oil companies often club together to pay for surveys of large areasbefore going their separate ways to investigate smaller concessions at theirown individual expense. The survey company is usually hired on an areabasis, for example to investigate a particular block, and payment is made onthe basis of the number of line miles of seismic shot. The price the surveycompany charges reflects not only its own costs but also the importance of itsfindings to the oil company in accurately determining the position of possibleoil- or gas-bearing geological structures, thereby saving the operator expen-sive but wasted drilling time.

As already explained, most offshore operators hire the services ofspecialist contractors to carry out nearly every function onboard a drillingunit including the actual drilling operation itself, and their own equipmentcosts are therefore low. A few majors such as Shell and BP, however, stillown their own rigs, unlike most oil companies which hire drilling contrac-tors units and crews on a time basis.

As the quest for richer oil reserves pushes out the frontiers of explorationinto more northerly and deeper waters, so offshore rigs are becoming morerobust and sophisticated. However, these improvements are reflected in theenormous cost of a new rig. The latest semi-submersibles, which can drillholes 25,000 feet deep in all but the severest weather in water more than2,000 feet deep, cost more than $110 million to build, even before the drillingtools are put onboard. Their capital cost can be split into three main compo-nents: the basic hull, the drilling equipment and the ancillary equipmentsuch as the power plant, auxiliaries and accommodation. The basic hull gen-erally makes up half of the total cost, with the drilling package amounting toand third and the ancillary equipment the remainder. However, these prop-ortions vary with the degree of sophistication of the unit and the units type.With such an enormous investment required, rigs are normally only orderedfrom building yards on the basis of secure work contracts for a period ofmonths or years ahead.

.Whether it is hired from a contractor or owned outright, the largest single

cost to the operator is invariably that of the drilling rig. He normally startspaying for its hire as soon as it has completed its previous contract withanother operator, and the cost of relocating it is one of the major factors con-sidered in its selection. Towage costs, if these are involved, vary with thelength and the difficulty of the tow, but are usually high. In this respect, an

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advantage of drill ships over nearly all jack-ups and most semi-submersiblesis that they travel under their own power, often at considerable speed, andthere are no towage costs involved. For newly-completed rigs built in distantyards, carriage aboard special semi-submersible heavy lift ships, usuallyoperated by specialist Norwegian or Dutch heavy-lift shipping companies, issometimes chosen in preference to prolonged, difficult and risky oceantowage.

Carriage by special ship is becoming a popular way of transporting rigs over long distances.

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The hire costs of mobile offshore drilling units vary considerably with thetype, sophistication and capabilities of the individual unit, with the overrid-ing factor being the current price of crude oil, which determines demand toa large extent. Because of the worldwide slump in exploratory drilling activ-ity caused by the low oil price, day-rates were generally far lower in early1987 than rates obtaining only a year earlier for similar rigs. Day-rates forsemi-submersibles peaked in the period 1980-82 with sums of over $90,000being the norm for some types, but by the end of 1986, a rig of this type couldbe hired for less than $10,000 a day, and numerous units of all types werestacked all over the world, keeping hire rates at a ruinous low for many dril-ling contractors. There were calls for the scrapping of older rigs to relieve theover-tonnaging that had dogged the rig mark~et since the mid-seventiesbuilding boom, and this has been put into effect, with the fleets size of about750 units worldwide beginning to show a net loss.

The overall cost of hire will naturally depend on the time the drilling con-tractor takes to drill the well, and this can depend on many factors, not leastof which, in the North Sea and other hostile areas, is the weather. Wells inthe more placid southern half of the North Sea may only take about 65 daysto drill, while 100 or more days might be needed for a well of the same depthfurther north, where time spent waiting on weather may account for a con-siderable part of the total cost. But the weather is only one of the hazardswhich may extend the drilling period. Problems in the hole, such as lost andirretrievable equipment necessitating a deviated hole being drilled round theproblem,zone are by no means uncommon, and a planned three-month wellcan easily end up taking five months or more to actually complete.

The other operating costs during drilling as far as the operator is con-cerned are mainly the fees charged by the specialist firms for the servicesthey provide during the drilling operation. These expenses are for supplyboats, anchor-handlers, helicopters, materials such as pipe, casing, mud andchemicals, fuel and water, and well and mud logging services.

Mud logging and well logging is invariably carried out by specialist com-panies using their own personnel and equipment. While mud logging can becontinuously carried out whilst drilling, well logging sometimes requires thehole to be emptied of equipment like drill pipe, and payment is consequentljrcharged on a pounds-per-hole basis.

Almost none of the oil companies use their own supply boats, which, inline with the fall in rig hire rates, can, (in early 1987,) be chartered for sub-stantially lower rates than in previous years. The same applies to helicopters,which in the North Sea, the Arctic and many other parts of the world are

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Rigs designed for the Arctic are more expensive to build than most.

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indispensable. They are normally hired for a monthly fee, plus an additionalhourly rate when the machines are actually in use, on top of which the oilcompany pays for the fuel used on its flights.

Drilling rig crew wages are normally paid by the rig owner or manager,and an operator will only be responsible for the wages of its resident super-visor and a small number of experts which may include a drilling engineer,a geologist and a materials co-ordinator. For the drilling contractor, how-ever, the wage bill is a major cost, since a semi-submersible in drilling modeis normally ctewed by between fifty and sixty personnel, excluding anyoperators staff or service hands. The driliing contractor also pays for hiscrews food, their insurance and their travel to and from the base heliport,although the crew are transported out to the rig in the helicopters paid for bythe oil company.

North Sea drilling rig wages at one time reflected the input of expertisecontributed by American oilmen in the development of offshore drillingskills and techniques, but in recent times the American element has largelydiminished to the point where only a few supervisory staff remain. Thewages of North Sea rig crews have fallen behind those of their Americancounterparts, and have been restrained somewhat by the slumping oil price,but by shore standards they are still high. To keep this in perspective, how-ever, it must be remembered that rig crews often do arduous and unsatisfy-ing work in difficult conditions for twelve hours out of every twenty-four, forfourteen days at a time. On the rigs that they spend half their working liveson their only comforts are good food, clean accommodation, freshly laun-dered working clothes for every shift and a daily movie show, and manyshoreside workers would find an isolated offshore existence in these sort ofconditions far from ideal. But virtually every company involved in the dril-ling business appreciates this, and is usually prepared to reward its offshoreemployees accordingly.

WELL TYPESTo most of the personnel on an offshore drilling rig the well being drilled issimply the hole whatever its purpose in the operators scheme, but everywell can be labelled according to its function. Most of the names likely to bemet with are listed below.

Wildcat Well: An exploratory well drilled in an unproven area, remote fromany existing producing well. In some areas only about one wildcat in ten isproductive, but even the dry holes yield valuable information from core sam-ples about the geological structures in the area, and on pressures and temp-eratures to be expected in other wells drilled. The drilling of a wildcat might

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be in complete isolation from other rigs, or there might be other unitswildcatting in the same area. Only about one wildcat in forty worldwideyields petroleum, although in the North Sea the figure is one in four and inthe US it is one in nine. However, the yield might still not be commercial.

Exploration or Exploratory Well: A well drilled in a search for a new reser-voir of hydrocarbons. It might be a wildcat well, or a well drilled on an exist-ing field to seek a new productive formation.

Discovery Well: An exploration well that produces evidence of oil or gas incommercial quantities. Wells that produce shows of uncommercial hyd-rocarbons are labelled dry holes or dusters.

Oil Well: A well that produces hydrocarbons in a liquid state from an under-ground reservoir.

Gas Well: A well that produces hydrocarbons in a gaseous state from anunderground reservoir. Sometimes a well that was hoped to be an oil wellyields gas instead. If the gas is in commercial quantities it might be sold whenequipment is installed for exploiting it.

Dry Hole: A well in which no commercially significant evidence of hydrocar-bons is found. Dry holes are usually plugged and abandoned. They aresometimes called dusters.

Appraisal Well: A well drilled following the drilling of a discovery well inorder to determine the extent of the reservoir or field. Several appraisalwells may be drilled, each close to a discovery well, in order to map out theoutline of a new field. In this case they are called step-out wells or deline-ation wells.

Development Well: A well drilled after a discovery well, and usually afterseveral appraisal wells, to commercially exploit an oil or gas field. Mostdevelopment wells are drilled from fixed platforms built once the field hasbeen appraised. They may be vertical wells, but are very often deviatedwells. .

Step-Out Well: A well drilled close to a discovery well but in an unprovenarea, so that the boundaries of the producing formation can be determined.Depending on the phase of the operators programme, the step-out wellmight be further classified as a development well, an appraisal well or adelineation well.

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Preparations for an Offshore D

rilling Operation


Infill Well: One of a number of wells drilled to fill in between establishedproducing wells on a block or concession. They reduce the spacing betweenwells in order to increase production from the reservoir.

Stripper Well: A well in its later stages of production, when its yield is reduc-ing. For US pricing and taxation purposes a stripper well is defined as a wellproducing 10 barrels per day or less. The term is more usually heard onshorethan offshore, since an offshore well producing as little as this would not becommercially viable.

Satellite Well: A well in a field that is being tapped by a production plat-forms own wells, but which was drilled independently, and usually verti-cally, by a mobile rig and later tied in to the platform by a sub-sea productionpipeline.

Re-Entry Well: A well that is re-entered following earlier plugging for somereason. Wells are usually plugged and abandoned if found dry, or pluggedand suspended if commercial but not required to be completed at the timeof drilling. They might be re-entered and production equipment installedwhen the price of oil~is more favourable.

Vertical Well: A well that is drilled without intentional deviation from thevertical, except perhaps to sidetrack an obstacle.

Deviated Well or Directional Well: A well drilled at an angle from the verti-cal, so that a reservoir is tapped at some distance horizontally from the sur-face location. Most wells drilled from fixed platforms are deviated wells.

PETROLEUM GEOLOGYMany types of crude oil are found in the ground in different parts of theworld, but all are natural products of the earth, complex mixtures of chemi-cal compounds called hydrocarbons and no&hydrocarbons. In thisnatural state crude oil is properly known as petroleum.

Geologists and other scientists have differing theories on the precise ori-gins of petroleum, but there is no doubt that it occurs mainl; in what aretermed marine sedimentary rocks, especially in sandstones, ddlomites andlimestones. Like coal, petroleum is a fossil fuel, and since it is an organic sub-stance, organic matter must have been present during the process by whichit came to accumulate in the reservoirs it is today found in. This process maynever be completely understood, but it is thought to have been a combina-tion of a chemical and bacteria1 action that took place millions of years ago.

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THE FORMATION OF HYDROCARBONSIn prehistoric times the earth was covered by dense vegetation and by seasthat teemed with minute living organisms, or plankton. As quantities ofplants and animals died, layers of dead and decaying organic matter built upon the ground and on the seabed. Meanwhile, sand, gravel and earth wasbeing eroded from the land by the weathering action of wind, water and ice.The resulting silt flowed down the rivers to merge with the decayingplankton, forming sedimentary deposits on the flood plains of the lowerriver reaches, in the delta estuaries and on the sea bed of the waters beyondthe coastline.

These deposits continued to build up over the ages, each layer in turnbecoming buried by another. Sealed deep inside them, starved of the oxygenthat was necessary for the slow decaying process to continue, were the deadmarine organisms. The lowest layers of sediment gradually became com-pressed and heated by the enormous layers above, and eventually theybecame so compacted that they were tranformed into soft, permeable,sedimentary rocks such as limesto

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An Introduction to Marine Drilling - Malcolm Maclachlan

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