The drilling business model has recently become the "elephant in the room" as drilling systems automation advances seek an integrator and technology / performance enhancements seek rewards. The day rate model has been adapted many times over the life of the industry but none of these adaptions has prevailed.The business model entails a number of key aspects that drive business behaviors in the supply chain; control, liability, risk, revenue. Some companies have the approach that the operations team drives the contracting of suppliers while others draw the whole process under supply chain for process control and pricing leaving the delivery of value often in significant doubt. This paper describes many of the business model adaptions created over the past 70 years from footage and turnkey through Integrated Project Management and Production Enhancement Contracts. Recently, actions and intentions have surfaced to transpose roles within the drilling supply chain to overcome resistance to change and improve financial performance (vertical integration by operators). This paper makes observations on the various forms of contract and various roles in the supply chain. The conclusions outline a blueprint for developing a business model that can drive performance and innovation throughout the supply chain.Discussing the current business models and opening the industry to development of more appropriate models has extremely high value and impact. It is a topic often raised and often left un-debated. If a new business model is broadly adopted it will change roles, performance, technology application and revenues throughout the supply chain. Awareness of this potential change will be extremely important to managers and engineers in the drilling business.

DescriptionA Well Delivery Process defines a set of activities along a time line to plan, execute and close out a well. The most advanced versions of this process include tools and techniques that create robust plans including risk and uncertainty management, technical limit focus and stretch goals, probabilistic time and cost estimating, detailed scheduling, Drill / Complete the Well on Paper and similar group exercises. Stage gates are included that provide review points which are usually matched to a corporate Capital Value or Opportunity Realization Process. The most advanced form of the process incorporates best practices from Lean Manufacturing. The paper describes best practices in the development of a Well Delivery Process. ApplicationThe Well Delivery Process applies to all wells in a scalable format whereby a longer term, more detailed process is used for Exploration Wells and a simpler, shorter duration process for repeatable development wells. It covers work processes between departments, especially subsurface and drilling, and between the suppliers and the oil company, as well as between suppliers. An actively maintained Well Delivery Process provides the means to capture lessons learned and to retain knowledge within a company. Results, Observations, ConclusionsIn a West African offshore operation in a marginal field development with complex wells, the application of a Well Delivery Process resulted in best in class performance in an industry benchmark survey (Rushmore Review). This included a 77% reduction in non productive time. Added value was achieved through increasing the typical well productivity by more than 33%. In the N Sea, a horizontal well drilled from a semi sub achieved an overall drill rate of 171 m / day versus a historic average of 80 m / day. Well cost was reduced by 30%. A N Sea operator improved from 3rd quartile to 1st quartile performance while another improved overall drilling performance by more than 30%. Reviews of drilling performance in two different regions demonstrated the correlation with poorer performance when there was insufficient lead time for proper planning according to the Well Delivery Process due to late and frequent drilling sequence changes. Lessons learned are described including the correlation of performance with robust risk assessment Recommendations on the key characteristics for a successful Well Delivery Process are described.

Description Manufacturing wells has been proffered as an opportunity to reduce the cost and increase the speed of construction for hydrocarbon production. There are a number of key caveats that must be addressed in order to progress this application of manufacturing techniques to well construction. This paper describes these caveats and the means to address them. Application The application of manufacturing techniques has been discussed in the industry for some years under the heading of factory style drilling. The progressive rise of drilling costs against low gas prices, the increase in pad drilling of horizontal wells for shale gas and liquids, the rising uptake of lump sum outsourced project managed wells primarily from NOC’s is creating an environment where the uptake of faster, lower cost well construction can accelerate. The application described in this paper takes factory style drilling to the next level whereby the best attributes of manufacturing are applied through the full cycle of the well including the well components (not just the drilling process). Results, Observations, Conclusions Lean Manufacturing techniques have resulted in significant gains in the manufacturing industry: 50% time reduction and 25% improved quality. Similar results are being emulated in other industries that are adopting these techniques. Lean Drilling™ has set benchmarks in drilling and completion performance across the globe (ref SPE27476, SPE 59203, SPE87117). The rewards are immense and can significantly offset the rising cost of accessing hydrocarbons thus enabling greater exploitation of oil and gas reserves. Correctly applied methods of Lean Manufacturing yield improved safety, functionality, quality, speed of construction and lowered costs. These methods also open the door to the application of automation throughout the supply chain thus gaining additional leverage on performance and cost. Significance of Subject Matter This paper will describe the history of Lean Manufacturing and under what circumstances it can be applied to wells construction. It will build on the differences between project type and various ongoing business type of wells as introduced in SPE 128716. It will lay out the opportunities and the barriers to this large opportunity for value generation. It will describe where it cannot, and should not be applied. A future outlook will address the industry shift to ever increasing factory style drilling and manufactured wells.

Industry analogies provide excellent insight to finding the optimum balance among manual, automatic and remote operations. They can also provide excellent insight into data displays and decision making.It is very important to define current state and future desired state for data acquisition, processing, decision making and work flow in high performance drilling operations. Understanding the difference between these two states provides the opportunity to guide the successful implementation of Drilling Systems Automation (DSA) and Real Time Operations Centers (RTOC's). Aviation and space flight have been offered as appropriate analogies for the future application of drilling systems automation. Formula One (F1) motor racing offers a highly competitive analogy for managing data flows combined with control systems.Various industry analogies are reviewed for their applicability to DSA and RTOC's. The benefits and drawbacks of each are highlighted. An assessment utilizes insights from other analogous industries to provide the opportunity to define best practices and relevant application for various well types from these analogies.Advanced application of DSA and RTOC's will change the role of the driller as well as the competency make up and location of the drilling team. Maximum benefit from DSA and RTOC's can be achieved through carefully planned implementation based upon relevant learning from other industries.

No abstract