Of Drilling Operations

At present, as the oil industry is coming out of recession, the costs for individual types of rig is varying considerably. The table below illustrates the average cost comparisons between rig types at time of writing:

Total daily

drilling costs

Rig type

($/day)

Land rig (shallow)

15 000

Land rig (deep)

25 000

Platform rig

50 000

Jack-up rig

95 000

Semisubmersible

75 000

These figures are general and should only be used as a guide. Even though jack-up costs have been traditionally cheaper than those of semis, demand for deep water jackups has pushed their day rates above most semis.

2.1 Specific cost breakdown - offshore exploration wells

To quantify the costs, we must look at real well expenditure. Below is quoted a typical cost breakdown for a 1990 UK North Sea exploration well. This is based on a TDAH of 3500 m with 7 inch casing to TD and includes four days of coring and four days of testing. The total time spent on the well is 60 days.

Cost group

Cost in US $ (thousands)

% of well cost

Location survey

160

3.0

Rig mob/demob

270

5.1

Rig positioning

8

0.2

Casing

570

10.8

Wellheads

180

3.4

Rig costs

1400

26.6

Drilling equipment rental

50

0.9

Fishing tools

9

0.2

Drill bits

140

2.7

Mud

220

4.2

Cementing

170

3.2

Electric logging

320

6.1

MWD

14

0.3

Mud logging

160

3.0

Coring

60

1.1

Directional control

240

4.5

Supply boats

370

7.0

Standby boats

160

3.0

Helicopters

212

4.0

Diving/ROV

130

2.5

Weather forecasting

4

0.1

Medical services

3

0.1

Testing equipment

100

1.9

Storage/onshore transport

26

0.5

Contract staff

250

4.8

Base office

41

0.8

5267

In this cost breakdown, there are 26 groups. Four of these, Rig Positioning, Fishing Tools, Weather Forecasting and Medical Services, all cost less than $10 000 for the well, so fine-tuning these services will provide us with minimal savings. Our attention must turn to the remaining 22 large items where a 10 per cent saving on individual costs can substantially reduce overall well costs.

Listing the remaining groups in order of either fixed, daily or unit, we achieve a spread as follows:

Cost in US $

Fixed item

(thousands)

% of well cost

Location survey

160

4.0

Rig mob/demob

270

5.1

Casing

570

10.9

Wellheads

180

3.4

Drill bits

140

2.7

Cementing

170

3.2

Electric logging

320

6.1

Coring

60

1.1

Testing equipment

100

1.9

Fixed item total

1970

38

Cost in US $

Daily item

(thousands)

% of well cost

Rig (56 days @ 25 000)

1400

26.6

Drilling equipment rental

50

0.9

Mud logging

160

3.0

Directional control

240

4.5

Supply boats

370

7.0

Standby boats

160

3.0

Helicopters

212

4.0

Diving/ROV

130

2.5

Storage onshore transport

26

0.5

Contract staff

250

4.8

Base office O/H

41

0.8

MWD

14

0.3

Daily item total

3053

58

From this figure and knowing that the well lasted 60 days, we can calculate the average daily cost.

Average daily cost= S3 053 000 = qp 000/day 60

Unit Item (thousands) $ of well cost

Mud 220 4.2

Unit item total 220 4

To summarise these groups, we find the following:

fixed cost items $1 970 000

daily cost items $3 053 000

unit cost items $ 220 000

What this means in real terms is that saving a day on the well will save 1/60 of $3 053 000 and not 1/60 of the overall well cost of $5 267 000. It also means that an extra day spent on tripping, directional correction, treating the mud, waiting on weather and making spurious trips will cost the operator a minimum of $50 000.

In chapter 11, drilling optimisation is discussed; this, essentially involves untilising experience and data to employ the best tools most efficiently to reduce drilling costs and time spent on a well. To keep drilling costs down, a team effort is required with innovation and experience used at every decision point.

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Responses

  • Askalu
    What means drilling operartions?
    7 years ago

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