Offshore Rig Sharing Improves Exploration Drilling Performance: A Case History

Abstract

A jackup-drilling rig drilled seven exploration wells in the U.K. and Norwegian sectors of the North Sea during a two-year drilling program. By using sublet well commitments and assignments, the rig was secured in a very tight rig market. The drilling rig was shared between two Amoco (now a part of BP) business units for four wells and another major operator for three wells. The application of rig and personnel sharing produced over 10% (U.S. $12 million) cost savings to Amoco through shared lessons learned, continuous improvement, and reduced permitting time. An additional savings of over 10% (U.S. $12 million) was achieved through detailed planning and risk assessment that significantly reduced unscheduled-event (trouble) time. Key factors for success of the program include continuous use of the same rig, crews, and offshore team members; the vision and support of management; adequate well design and pre-planning time; and the commitment of the right people with the right talents to the projects. The same Amoco wellsite supervisors were utilized throughout the program (even as the rig moved from operator to operator). This paper summarizes how the sharing of a rig, people, and best practices can improve exploration drilling performance, even across different teams, business units, operators, and countries. Examples of sharing knowledge between project teams are presented to quantify the value of a long-term drilling rig contract for one-off exploration wells. The paper concludes by providing lessons learned from rig-sharing agreements and future applications of rig sharing. Introduction Amoco Norway signed a long-term rig contract for a harsh-environment, heavy-duty jackup-drilling rig (Transocean Nordic) in February 1996. Prior to commencing the contract term in October 1996, the rig was mobilized from the U.K. sector to Rotterdam, The Netherlands for modifications (pipe-handling equipment installation and other upgrades) in order to comply with Norwegian regulations. Amoco Norway drilled the second and fifth wells in the program, including a challenging high-pressure, high-temperature (HPHT) well and a 58 (geological sidetrack. Amoco U.K. drilled the third and sixth wells in the program (both HPHT). Another major operator (Eni-Agip) drilled the first, fourth, and seventh wells. Neither Amoco nor Eni-Agip had any financial interest in the other company's respective exploration project areas. The rig was released in August 1998. When the rig was contracted, there was a tight market for rigs, especially HPHT, 300-ft-water depth, harsh-environment rated jackup rigs capable of working in the Norwegian sector. Although the contracted rig met the minimum project requirements (after the pre-contract upgrades), it was less than optimal in regards to spud-can design, variable load, derrick load, living-quarters capacity, pipe-handling capability, and water-depth rating. In general, the rig was older and smaller than most competing (and unavailable) rigs in the class. Availability of the most versatile rig possible to meet the project timing requirements was the key driver in rig selection. In a tight market, it is often necessary for an operator to secure rig slots by executing rig contracts well in advance of the anticipated contract commencement (eight months in this instance). Amoco obtained sublet well commitments from several operators prior to signing the contract. The rig contract contained an assignment clause, which allowed Amoco to assign the rig to other operators. The rig contract, sublet well commitments, extension options, assignment rights, and rig-sharing agreements allowed Amoco to optimize rig utilization during tight market conditions. Amoco was able to keep the rig working throughout the contract with only minimal standby time.