filename:1BP-Amoco: 1
How to make a Break thru
Breakthrough Drilling & Completion Performance – Case Studies
J. Ford BrettOGCI
DrillingTechand10Oil.ppt
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1955 1965 1975 1985 1995
Predicting Rig Utilization
2000
.3$10 /BBL
Statistics
Scaled Utilization SD = .22
Scaled Oil Price SD = .23
Correlation = .09(Oil price, Utilization)
.98$ 55 / BBL
Utilization
Change in Real Oil Price
DrillingTechand10Oil.ppt
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1955 1965 1975 1985 1995
Predicting Utilization
2000
.3
.98
58ºF
57ºF
Statistics
Scaled Utilization SD = .22
Scaled World Avg Temp. SD = .25
Correlation = .32(Temp., Utilization)Utilization
World Temp
DrillingTechand10Oil.ppt
Predicting Rig Count and Oil Price is Like Predicting the Weather
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1955 1965 1975 1985 1995 2000
.3 10.15/BBL
.98 55.5/BBL
58ºF
56.8ºF
We Know:
It will change.
We can’t control it.
We can’t predict it (very well).
We need to live with it.
DrillingTechand10Oil.ppt
DroughtSeason long changes in the
environment.
DrillingTechand10Oil.ppt
Drought
Change your environment to prosper no matter what.
Season long changes in the environment.
DrillingTechand10Oil.ppt
Drought Season long changes in the environment.
Change your environment to prosper no matter what.
6.2
3.7
2.6
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1.7 1.8
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1978
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Oilfields dry up Change the technology to prosper
(e.g. multilateral)
New
wel
l av
erag
e u
ltim
ate
reco
very
, b
cf/w
ell
(Tex
as g
as w
ells
)
Projected Ultimate Recovery
“That’s it, sir. We’ve eaten the last of the contractors!”
Everyone is in this together...
“That’s it, sir. We’ve eaten the last of the contractors!”
Everyone is in this together...
operators
DrillingTechand10Oil.ppt
DUAL ACTIVITYDUAL ACTIVITYDEFINEDDEFINED
1 Make up 26" BHA2 Run 26" BHA, drill 26" hole3 Retrieve 26" BHA4 Rig up 20" casing tools5 Run 20" casing, cement6 Retrieve 20" casing tools7 Rig up riser running tools8 Run riser, BOP, test9 Make up 17-1/2" BHA
10 Run 17-1/2"BHA,drill 17-1/2"hole11 Retrieve 17-1/2" BHA12 Rig up 13-3/8" casing tools13 Run 13-3/8" casing, cement14 Retrieve 13-3/8" casing tools
Time
SINGLE ACTIVITY WORK SEQUENCESINGLE ACTIVITY WORK SEQUENCE
DrillingTechand10Oil.ppt
DUAL ACTIVITYDUAL ACTIVITYDEFINEDDEFINED
1 Make up 26" BHA2 Run 26" BHA, drill 26" hole3 Retrieve 26" BHA4 Rig up 20" casing tools5 Run 20" casing, cement6 Retrieve 20" casing tools7 Rig up riser running tools8 Run riser, BOP, test9 Make up 17-1/2" BHA
10 Run 17-1/2"BHA,drill 17-1/2" hole11 Retrieve 17-1/2" BHA12 Rig up 13-3/8" casing tools13 Run 13-3/8" casing, cement14 Retrieve 13-3/8" casing tools
Yellow - Rig #1Red - Rig #2
Time
DUAL ACTIVITY WORK SEQUENCEDUAL ACTIVITY WORK SEQUENCE
DrillingTechand10Oil.ppt
95
42
Well Number
180
160
140
120
100
80
60
40
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1995 Wells
1996 Wells
Learning behaviors / processes introduced
Drilling Learning: Deepwater Drilling Example BP GoM
Greater Green River Basin: South Moxa Arch 1990-1995
Successful Drilling Practice Study
Graph here
Regression with 1994 Statistics
R Square = .22
P-Value Intercept = .000
Slope = .000
Significance F = .000
y = 34.8x + 346
100
300
500
700
900
1100
1/90 1/91 1/92 1/93 1/94 1/95
Spud Date
ROP (Avg. Ft/Day)
15%/year
• Comparable Wells
• Every Operator
STEP CHANGE
Copyright © 1996 by OGCI Management, Inc.
DrillingTechand10Oil.ppt
Gravel Pack Completions - Learning
Implemented Dedicated Learning Effort in Operations
Well #
Co
mp
leti
on
Da
ys
02468
101214161820
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Greater Green River Basin: South Moxa Arch 1990-1995
Process Driven Alliance can Yield Step Change in Improvement
Graph here
Regression with 1994 Statistics
R Square = .22
P-Value Intercept = .000
Slope = .000
Significance F = .000
y = 34.8x + 346
100
300
500
700
900
1100
1/90 1/91 1/92 1/93 1/94 1/95
Spud Date
ROP (Avg. Ft/Day)
15%/year
• Comparable Wells
• Every Operator
“Alliance”
Copyright © 1996 by OGCI Management, Inc.
DrillingTechand10Oil.ppt
Days vs. DepthA-3 and A-4
4000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000
0 10 20 30 40 50 60 70 80 90
Days
Me
as
ure
d D
ep
th
A-3 Actual
A-3 Trouble Free
A-4 Actual
A-4 Trouble Free
A-3 Actual
A-4 Actual
A-3 Trouble Free
A-4 Trouble Free
Alliance andPlanning
$/Frontier Well
Other DrillingTechnology
$/Frontier Well
Anti-Whirl Bit
$/ Frontier Well
Now running logs on Frontier Zone $5,000Use 4-1/2" production casing vs. 5-1/2" casing $30,000No well clean-up on single Frontier well $25,000
Cement Design $7,0008-5/8" surface casing vs 9-5/8" casing $2,715Drill less rathole on Frontier $15,000Change in wellhead design $4,000
Production equipment located closer to wellhead $460Reduced drilling days by Drlg. Co. $43,200Re-use of drilling mud on Frontier wells $5,000Rig Mobilization - Pre-Planning/Scheduling $3,000Less supervision/time on jobs/#of people $4,196Cooperation within Alliance $2,500
Dowell avg. CEMENTING location time reduced $420Purchase pit liners in lots of 10 $1,400
Negotiated with Denny's Water Co reduced price $6,000Hauling of surface casing $300
Use 400 bbl frac master for cement water vs 400 bbl up-Switched vendors for casing dope right tanks
$250$100
Single contractor to handle all trash dumping $425Estimated avg. hole size from previous data - savings onFlat rate for casing screws number of sacks of cement
$1,750$1,800
Flat rate with contractor for cleaning casing $1,150Set 2-3 conductors at a time $200
Utilized railhead in Rock Springs, WO for casing delivery $2,400Pump 10 bbls vs 40 of chemical pre-flush $350Re-use 1" cement pipe $110Zero or bare bone automation $4,000
Competitiveness between dirt contractors $6,000Purchase fencing material in bulk $400
Drilling Cost Reduction Totals: $68,211 $62,715 $43,200
Percentage of Total: 39% 36% 24%
Total Drilling Cost Reduction $173,226
Moxa Arch Single Operator’sProcess-Driven Improvement
Copyright © 1996 by OGCI Management, Inc.
Alliance MutualGoals
GoalsLinked to
Profitability
Well-DefinedProcess
Buy-in atAppropriate
Levels
QuantitativePerformance Msmt.Tools
PerformanceBased
Incentives
ProcessImprovement
Analysis
# of SuccessFactors
IncorporatedE 0K 0L 0P 0I X 1D X X 2N X X X 3O X X X 3B X X X X 4C X X X X 4F X X X X 4A X X X X X 5M X X X X X 5G X X X X X 5J X X X X X X 6Q X X X X X X 6H X X X X X X X 7
Successful Alliances
Critical Success Factors
Copyright © 1996 by OGCI Management, Inc.
Successful Alliances are Process-Driven
Quantified Success
All Report Success
Some Report Success
Some Report Failure
Quantified Failure
All Report Failure
0 2 3 41 5 6
E
P I N
O
F,C
B
A
M,G Q,J H
P
L,K D
N F,C A
Success
Failure
Number of Factors Incorporated
7
Page 20
Copyright © 1996 by OGCI Management, Inc.
DrillingTechand10Oil.ppt
NOT ECONOMIC TODAY
1/90
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1100
2/951/91 1/92 1/93 2/94
Spud Date
ROP (Ft/Day)
Year Average Cost1990 $1,400,0001991 $1,240,0001992 $1,080,0001993 $ 920,000
What is the bottom line?
A Drilling Story
Copyright © 1996 by OGCI Management, Inc.
NOT ECONOMIC TODAY
1/1/90
100
300
500
700
900
1100
12/31/941/1/91 1/1/92 12/31/92 12/31/93
Spud Date
ROP (Ft/Day)
Year Average Cost1990 $1,400,0001991 $1,240,0001992 $1,080,0001993 $ 920,0001994 $ 760,000
What is the bottom line?
Impact
Copyright © 1996 by OGCI Management, Inc.
DrillingTechand10Oil.ppt
Critical Success Factors
Compelling Reason to Change
Goals Linked to Profitability 100 %
Well-Defined Detailed Process 100 %
Quantitative Performance 100 %Measurement Tools
Performance-Based Incentives 60 %
Process Improvement Analysis 80 %
% of Alliances w/ Quantified Success using these factors% of Alliances w/ Quantified Success using these factors
DrillingTechand10Oil.ppt
The Bottomline for “My Company”Make your company more competitive = more valuable.• Have a Technology Direction
– Have a technology strategy for each asset - what are the bottle necks and how might we remove them?
• Routinely Measure Performance of Technology
– Treat every use of technology as an experiment - monitor & diagnose both successes and failures.
• Link Economic Results with Technology use
– Develop formal business cases for using technology - estimate & document cost and value.
• Have a way to Re-new your Technology
– Create culture and structure that supports learning, in addition to mechanisms.
DrillingTechand10Oil.ppt
The Bottomline for “Me”Learn = make yourself more valuable• Have a Technology Direction...
– Make a personal technology plan - ID gaps and create plan to close the gaps. Make yourself distinctive.
• Routinely Measure Performance of Technology
– Be able to PROVE how the impact of your know-how.• Link Economic Results with Technology use
– Treat use of technology like it was your money - if you own stock it IS your money.
• Have a way to Re-new your Technology
– Listen, seek out, learn something new EVERY day, EVERY week, EVERY month - eliminate “Not invented by me” mentality.
DrillingTechand10Oil.ppt
• Compelling reason to change - crisis or leadership. Recognize change is needed• Commit to a goal you don’t know how to achieve• Involvement• Reason by in choose to do it – need buy on the hook.• Don’t come from continuous improvement little bit at time.• Compelling reason – goal – recognize a change is required.• Distinctions – “on field or in stands”- type of conversation on the field• What are you doing day in day out.• 90% spent on items not meeting goal• Rotary time is precious.• Plans they know will work.• Bought into target• Loose weight example.• Clear accountability• Simple Goals• Focus on Bottom line.