In the oil well drilling business, having the latest equipment helps; but it’s the human element that still makes the difference, as Alan Swaby learns.
Whatever else the Norwegian equivalent of Father Christmas brings Frank Tollefsen this year, his largest—and most anticipated—present by far will be a brand new drilling ship costing the best part of half a billion dollars.
As senior vice president of Operations at Ocean Rig UDW—offshore oil and gas well drilling contractors—Tollefsen currently has at his disposal two deep water semi-submersible platforms that have been hired by all the major oil companies to work in all deepwater exploration zones except the Far East. The very first to go into action was the ‘Leiv Eiriksson’ off the coast of West Africa in 2001. A year later, sister ship ‘Eirik Raude’ was finished off in Canada and put to work in the Atlantic waters off Newfoundland.
Semi-submersible platforms provide an inherently more stable drilling platform than a drilling ship, making them better suited for the harshest conditions. “They sit deeper in the water,” Tollefsen explains, “so they are less susceptible to wind and waves.”
Using a sophisticated GPS system and transponders placed on the sea bed, the platform’s computers can instruct a series of propellers around the rig to make continuous minor adjustments that keep the drill derrick within one degree of where it should be. What the semi-submersible can’t handle is too much heave in the sea, where the waves rise and fall. There is some slack designed into the rigs—which means drilling can continue even when the platform is moving vertically—but when the waves get to 25 metres in height, operations have to be shut down. All of which is a bit ironical as the ‘Leiv Eiriksson’ is currently on duty in the Black Sea, which is more like a mill pond compared with the North Atlantic.
To get from location to location, semi-submersible platforms move under their own steam. The pontoons that normally lie deep under water are inflated and the rig sits on the surface. Propellers that normally control position become means of propulsion. But it’s a slow process and complicated even further in the case of the Black Sea, as the platform had to pass under two bridges, necessitating the derrick to be dismantled.
Drilling ships, on the other hand, sit on the surface and feel every movement of the sea but much of that can be compensated for by the latest dynamic positioning systems. Compared with platforms, drilling ships have a number of operational advantages. They move from location to location twice as quickly as their counterparts and as oil companies hire a rig by the day—whether drilling or moving—speed is of the essence. At prices that start at $400,000 a day and have peaked at over $600,000, any savings to be made soon mount significantly. Drilling ships also have more deck payload so they can hold greater quantities of consumables with a resulting lowering of logistical costs.
“There’s been a shortage of offshore drilling capacity,” says Tollefsen, “to the point where ship yards were able to charge a premium for new vessels and rig operators were able to increase their daily rate. It’s a market driven very much by supply and demand. We are not the only company increasing its fleet, so the extra supply means that daily rates have come off the peak they were at.”
Setting up as an unknown and untested drilling contractor, investing millions of dollars in equipment, involved considerable risks; and in the beginning, mistakes were made. The semi-submersibles were built in yards that had no prior experience. Extra development work and prototypes were involved and the decision to build and then equip in different locations also added time and expense. But by manning the company with the most experienced managers and operators it could find, Ocean Rig fought its way into the market and made a name for itself as a reliable contractor.
“In some industries,” says Tollefsen, “there is a technological and performance gulf between market leader and smaller suppliers. In this industry it’s not the same. Unless you can deliver exactly what customers want, you won’t get any business. The rules tighten more and more, calling for ever stricter managerial control.”
As such, the difference between the performance of Ocean Rig and the market leader, for example, is a question of fleet size. Where Ocean Rig currently has two deep water rigs, the opposition has over 20. But with its latest purchases, Ocean Rig is moving up the rankings. The transition came about when the company was bought in 2008 by Greek shipping owner George Economou, through his holding company Dry Ships. It’s enabled the purchase of four state-of-the-art drilling ships which will be delivered between December this year and the end of 2011.
“These drilling ships are built to a proven design,” says Tollefsen. “When we take position they will be equipped with everything needed to go straight to work—including the enhancements we have specified to improve efficiency and reduce maintenance. Already we have signed contracts for the first ship.”
Working offshore will never be an easy life but operations on board the latest generation drilling ship have changed enormously. So much of the handling, joining and screwing of drill pipes and casing is done remotely. Higher derricks mean that three 10-metre lengths of piping can now be preassembled into a single stand and handled as a unit. More efficient drills make shorter work of holes of up to 36 inches in diameter.
Having technically advanced equipment helps; but these days, when working at extreme depths and pressures, having systems in place which minimise the possibility of anything going wrong is what oil companies are looking for. There could be half a dozen or more contractors involved with well drilling providing mud and cement services but the overall responsibility lies with the oil company paying the bills—so despite the expensive toys, it’s the personnel behind them that really count. www.ocean-rig.com
