Analysis: There is a quiet revolution underway. While the oil and gas industry prides itself on technological innovation, some truly transformative technologies are in the early stages of commercialization. As with all oilpatch innovations, these new technologies promise simpler wells, lower costs, and enhanced performance.
It is not unusual at industry meetings to hear about step-level changes in the oilpatch, though historically these are few and far between. The last major revolutionary leap occurred in the early 1990s when 3D seismic and horizontal drilling opened new frontiers and enabled the industry to navigate a low price environment.
But transformative technologies are of interest because the oil and gas industry is grappling with depletion at the same time it is asked to climb the mountain to higher performance levels. There will be many ways to scale this mountain. Some paths will follow technological breakthroughs, others will follow improvements in drilling and completion processes.
At least two technologies--downhole expandable tubulars and casing drilling--have seen rapid implementation in the last three years. Hardly a fiscal quarter goes by without some new milestone in the ongoing and expanding chronicle of firsts for both technologies. Field tests show the technologies are real, and they work. The overarching question is the size of the niche each technology will claim in the oilpatch.
Casing drilling™is the most widely publicized new technology in the oilpatch. The process, which eliminates drillpipe and the associated downtime tripping tools out of the wellbore, has moved to commercialization in South Texas, Mexico, Wyoming, and Canada.
"We think casing drilling™ is revolutionary," notes Tesco Corporation's Tommy Warren, director of research and development for casing drilling. "One of the things we did when we started developing the concept was to look at the limits to drilling performance. We concluded that the bigger gains are probably not in the rate of penetration per se, but in all the other activities. How do you get the casing on the bottom faster? How do you eliminate trouble time? Casing drilling™ accomplishes several things aimed at drilling a faster well, but not necessarily increasing the penetration rate."
Casing drilling™ streamlines the drilling process by substituting casing for drillpipe. There are several ways to drill with casing, either by attaching the bit to the bottom of the casing, or through a bottomhole assembly that extends beyond the casing. Motive power originates either from rotation of the casing string via top drive, or through downhole motors.
The latter method employs wireline-retrievable bottomhole assemblies so bits can be changed without tripping. While optimum rates of penetration are not much different from conventional drilling, casing drilling™ saves time because it eliminates tripping drillpipe and solves problems associated with troublesome geology by getting the casing in place quickly.
To date, casing drilling™ has been demonstrated in Canada, Wyoming, South Texas, the Gulf of Mexico, and in Asia. More recently, casing drilling™ has been successfully applied to demonstration directional and horizontal drilling projects.
Currently there are at least nine purpose-built casing drilling units on the market, though the process can be adapted to conventional rigs, which is an important step in moving the drilling process to the offshore environment.
As the oil and gas industry enters its retooling phase, purpose-built casing drilling rigs will become a viable alternative to conventional rigs, particularly on land. Purpose-built casing drilling rigs can be constructed for less than two-thirds of the cost of conventional rigs and feature a smaller footprint, better fuel efficiencies, and semi-automation. Mobility is also a factor. It is possible to move the purpose-built rigs in a day with less than half the loads--and half the time--of the most efficient set of conventional rigs.
Expandable tubulars, the second transformative technology, have found initial application offshore where they promise significant cost and time savings, particularly in deepwater applications. The technology can be used in a variety of product lines such as liner hangers, sand control, solid tubulars, or production packers.
Expandable tubulars fall into two segments. There is solid expandable pipe, which is marketed under various trademarks such as Solid Expandable Tubulars™(SET), or Solid Tubular Expandables™(STE). The second segment involves slotted expandable tubulars that are used in sand control or as a component in well completions on both land and offshore projects.
Expandable tubulars defy imagination. Video depictions are an eerie sight. Solid metal puffs out like a balloon at the rate of 15 to 30 feet per minute. An expansion device, typically cone-shaped, is run through solid tubulars, producing a diameter up to 25 percent greater than the original pipe. In liners, the expansion device is placed at the well bottom, then forced back up the wellbore, often through hydraulic pressure. Slotted expandable tubulars can reach diameters up to 100 percent greater than the initial pipe.
Shell patented expandable tubular technology in Europe during the 1990s. It is now being developed and commercialized through licensing for international applications to Weatherford International, and Enventure Global Technology, a joint venture between Shell and Halliburton, with Halliburton providing global infrastructure through its 90-country distribution network.
The ultimate goal of solid expandable tubular technology is to create the MonoDiameter™ well, a hole of uniform size from top to bottom. MonoDiameter™ wells eliminate the telescopic profile common to conventionally drilled wells. A bigger hole at bottom allows the use of larger tools and becomes a factor in production by creating a bigger production conduit for hydrocarbons. Meanwhile, removing larger casing sizes closer to the surface makes it possible to use smaller, less expensive rigs. Ultimately, the MonoDiameter™ well will encourage equipment standardization, a manufacturing concept that can achieve cost savings in the oil and gas business.
To date, expandable tubulars have found greatest application in sand control. The process eliminates traditional gravel packing, which reduces cost, decreases completion complexity, works within a smaller wellbore, and is credited with enhancing production and reducing downhole erosion.
Expandable sand screens have found a ready market offshore where nearly all wells require sand control in procedures that account for as much as 20 percent of total well costs.
How large a market for expandable tubulars? A Lehman Brothers 2001 study estimates sand control as a $1 billion annual market, with gravel packing accounting for 75 percent of sales. The investment banker speculates that the market for sand screen expandables will reach $550 million over time, with solid expandable tubulars potentially a $4.5 billion annual market.
One indication of how concepts like casing drilling or downhole expandable tubulars are resonating throughout the industry can be found in new buzz terms, which describe the technologies as "game-changing," "transformative," or "a step change." While these two technologies are the more frequently cited of today's trends, others exist. Underbalanced drilling promises step-level changes in the ability to work downhole. There have been improvements in underground stimulation that free more gas from tight formations. Meanwhile, oilfield tools have undergone incredible transformation in a short period of time. All of these things individually--and as a whole--are part of the industry's expanding technological horizons.
Each emphasizes that the long uphill struggle to expand hydrocarbon availability in a declining resource--a revolution in the making--is underway.
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