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Considering the current trend oil and gas corporations are facing, they are continuously focusing on increasing their operational efficiency. Declining oil and gas prices lead their operational departments to reduce the cost of drilling and producing hydrocarbons, which ultimately results in streamlining the operational cost of their drilling tools. Oilfield service companies with hybrid business models must take all life cycle cost into account. To influence these costs and to optimize capital and operational efficiency as well as service availability, comprehensive cost models are used in the product development process. For the consecutive development stages from feasibility through detailed design, models with increasing level of detail are required. Cost modeling within the development process is typical in the petroleum industry. Currently, models are available for specific applications in single development phases. This paper describes a holistic approach to analyze and optimize life cycle cost and service availabilities of drilling systems from the early concept phase through deployment. The result is a fast, secure and easy usable software tool as well as a standardized process to develop competitive, high-technology drilling systems. To identify requirements for these models, a stakeholder analysis is performed and described. Based on the analysis results, information flows are defined: Who provides and needs which information at what point of time within the process? With this foundation, new models are created or existing models extended to meet the requirements. In this context, best practices from different industries are also reviewed and implemented where applicable. A parallel use of the models during the respective development stage enables an iterative improvement. The development of the models and current results are detailed in this paper. In early conceptual design phases, it is challenging to calculate life cycle cost with sparse information about the complex future drilling system, so cost-estimating relationships must be devised. Maintenance times and intervals, which are one of the main operational cost triggers, must be assessed by concurrent high level tool performance and reliability. Cost efficiency, tool performance and reliability must be balanced to achieve high customer expectations and high margins. During the detailed design phase, system costs, such as alternative costs, e.g., through non-availability of tools, in addition to bottom-up models on the component level, must be considered. These modular models are connected to each other to exchange data via standard interfaces. They calculate future cost projections and identify key cost drivers. This enables continuous cost optimization through the whole development process. Results to support decision-making as well as cost saving potentials are shown with an exemplary development process of a drilling tool by using the life cycle costing approach.

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The use of product-service systems business models is increasing in today's economy. Because the products that provide the service to the customers incur cost during their lifetime, the method of lifecycle costing finds wide-spread use. However, this paper shows the current methods have some inaccuracies when determining lifecycle costs. The methods do not consider the required number of products necessary to provide the offered service to the customers. This paper describes a new framework for lifecycle costing that includes these cost components.

Horizontal drilling has been the industry standard for oil production wells in the North Sea for decades. Significant improvements have been made in the precision of directional drilling by rotary steerable systems (RSS), nevertheless there remain opportunities to mitigate operational challenges in complex drilling environments. One such challenge is the occurrence of hard stringers interbedded between soft sandstone and limestone formations within the reservoirs. The interaction between the bit and hard stringers at the interfaces can lead to a deflection of the bit, resulting in high local doglegs (HLDs), and excessive static loads unless mitigation actions are triggered in a timely fashion. Operational parameters have to be adjusted during hard-stringer drilling, but are also constrained in the underlying formation to avoid HLDs and guarantee bit and BHA integrity. The key to efficient stringer drilling presented here is a consistent, timely and reliable method of detecting stringers. This is enabled by a fit for purpose stringer detection algorithm embedded in a measurement-while-drilling (MWD) tool for vibration and load measurements, combined in a systems approach with an automated surface system. Different indicators such as vibrations, loads and ROP that are traditionally used for stringer detection have been analyzed in the development phase of the algorithm. High-frequency torsional oscillations (HFTO) have been found to be a leading indicator for stringer drilling: HFTO is a torsional vibration phenomenon with high frequencies (50Hz-450Hz) and is only excited by the bit-rock interaction in hard formations. The HFTO amplitudes in sand/lime stones and calcite stringers show well separated distributions. Finally, HFTO is unique in that it is not directly affected by the driller, or due to other downhole dysfunctions, e.g. compared to a change in weight on bit (WOB) which may be caused by a surface parameter change or a stabilizer. The physics-based algorithm embedded in the MWD tool combines tangential acceleration and dynamic torque measurements to calculate the maximum HFTO load in the BHA. A stringer is identified if an HFTO maximum amplitude threshold is exceeded and the energy is localized in one frequency. The downhole indicator is aggregated to a 1-bit value (stringer/no stringer) that enables a high telemetry update rate and thereby a timely reaction at surface. The stringer indicator and advice are displayed to the driller and are actively used for stringer drilling. The paper describes the technology as well as the operational setup, and experience from the first field deployments. By using the new technology, the driller can react faster to any stringer and use appropriate parameters to avoid costly HLDs. First field deployments demonstrate a significant improvement in invisible lost time (ILT) caused by deflections of the bit, resulting in a considerable reduction in well delivery costs.