US 2Q exploratory drilling up by over 50%

by Nick Snow, Washington Editor

Oil and gas producers drilled over 50% more US exploratory wells in the second quarter of this year than a year earlier, the American Petroleum Institute said in its latest quarterly estimate of domestic well completions.

Exploratory well completions, which accounted for nearly 17% of total wells drilled, grew 53% year-to-year, it reported. Oil well completions rose 49% while gas well completions jumped 99% from their level in 2007's second quarter, API said.

"The year-to-year increase in exploratory drilling demonstrates the industry's resolve to explore for and find the oil and natural gas to keep our nation going strong. This is remarkable considering the limited access our industry has to the nation's oil and gas resources," said Hazem Arafa, director of API's statistics department.

API's report said that an estimated 14,289 oil wells, gas wells, and dry holes were drilled domestically during the 3 months ended June 30—8% more than a year earlier. A resurgence of US oil well completions that began in 2000 has continued, it indicated. An estimated 5,219 wells were drilled during the 2008 second quarter, 17% more than in the comparable 2007 period and the highest second-quarter estimated oil activity since 1986, API said.

It reported that gas remains the primary domestic drilling target, with an estimated 7,561 wells completed during the 2008 second quarter, a level 3% higher year-to-year and more than double the level 10 years ago. API also reported that total estimated footage drilled this past quarter reached 89,947,000 ft, 14% higher than a year earlier and the greatest second-quarter footage drilled ever.

Contact Nick Snow at nicks@pennwell.com

Horizontal wells will let BP tap hard-to-reach oil field

By ELIZABETH BLUEMINK
ebluemink@adn.com

Imagine a bent straw made out of steel extending 8 miles long and 2 miles deep, plunging through icy water and miles of undersea rock. That's how the next major oil field in Alaska probably will be developed.

BP announced Monday that it will spend $1.5 billion -- drilling the longest wells in the world -- to develop the Liberty oil field under the Beaufort Sea. Oil could begin flowing by 2011.

A few years ago, BP shelved the idea of drilling Liberty -- which lies about five miles offshore in federal waters, farther from land than any other oil field in Alaska's arctic -- by building an expensive gravel island.

At the time, BP said the idea didn't make financial sense.

Now, BP says it will tap Liberty by enlarging a gravel island built years ago for the Endicott oil field. BP will use a technique called horizontal drilling to reach Liberty six to eight miles to the east.

The project will expand the life span of the Endicott, a 21-year-old field that is now producing only a tenth of its peak output, company officials said.

FEDERAL WATERS

This week, BP is beginning seismic surveys in the Beaufort to determine the placement of the six Liberty wells. Construction could start next year and drilling could begin in 2010, company officials said.

Because Liberty lies under federal waters, most of the tax revenue from production will go to federal coffers, with 27 percent of the royalties returning to the state. Most of the other Arctic oil fields lie on state land.

BP declined to estimate the amount of federal or state tax revenue that will result from the oil field. The state and the North Slope Borough will get additional tax revenue, such as property taxes.

It's doubtful that the company would have pursued the project if it had been subject to the state's hefty oil production tax enacted last fall, said Doug Suttles, BP Alaska's president, at a news conference on Monday.

SMALL FIELD

Liberty is BP's first major investment in an oil prospect on the North Slope or in waters off Alaska's coast since the launch of its Northstar field, which began producing oil in 2001, Suttles said.

Liberty's output will be small -- peaking at about 40,000 barrels per day -- compared to overall current oil production on the North Slope.

The state estimates oil companies will pump out an average of 722,000 barrels of North Slope crude per day this year.

But with major fields like Prudhoe Bay in decline, developing smaller, less-accessible fields is needed to keep oil flowing through the trans-Alaska pipeline, Suttles said.

Another example of a small field is the new Qannik satellite, near the Alpine oil field west of Prudhoe, which will peak at 4,000 barrels a day next year, Conoco Phillips announced Monday. Pioneer Natural Resources Co. just began production from the Oooguruk field, which should peak at 20,000 barrels a day.

ENVIRONMENTALIST REACTS

Some environmentalists said their feelings about Liberty are mixed.

They like the fact that the project uses horizontal-drilling technology, which minimizes the physical footprint of the development and reduces the amount of wildlife disruption in the Beaufort.

But they aren't happy about any new oil development in Arctic waters given the uncertain future of polar bears and other species deemed at risk due to climate change. And they are worried about the effect on marine mammals of noise from the industry's seismic surveys. Seismic surveys blast sound waves into the seafloor to test the rock formations below.

"I neither want to sing its praises or overly condemn it," said Brendan Cummings, an attorney for the Tuscon, Ariz.-based Center for Biological Diversity, of the Liberty project.

In an effort to preserve polar bear habitat, his group is suing the federal government to try to block offshore oil drilling in the Arctic. The Liberty project is not part of that lawsuit.

The company has already obtained two critical permits from federal agencies to develop Liberty but it is still seeking final approvals from the state and the North Slope Borough. The National Marine Fisheries Service is taking public comments on a BP request for permission to unintentionally harass whales and seals during its seismic surveys.

Recently, the Liberty project overcame a few legal challenges.

For example, an Anchorage federal judge last week rejected the village of Point Hope's claim that the U.S. Minerals Management Service violated a couple of federal environmental laws when it granted BP and Shell Oil Co. permission to conduct seismic surveys in the Beaufort and the Chukchi seas this summer.

The village said the minerals service should not have authorized the seismic surveys because of their potential to harass and harm marine mammals.

At least four oil companies -- BP, Conoco, Eni and Shell -- plan to conduct seismic surveys in offshore waters this summer, according to the Alaska Support Industry Alliance.

Casing Drilling

What is casing drilling?

Casing Drilling, an innovative process for simultaneously drilling and casing a well, is emerging as viable technology for the twenty-first century. The concept builds upon experience gained drilling liners to bottom in troublesome holes. With the advent of dependable top drive systems, wireline retrievable bottom hole assemblies, PDC bits, and high torque connections, it is possible to simultaneously drill and case a complete well using casing as the drill-string.

Development of casing drilling technology

Drilling with casing has proven to be an effective method of reducing drilling costs and solving drilling problems. Most of the current casing drilling activity is focused on drilling vertical wells, but interest in directional wells is increasing as the benefits of casing drilling in straight holes are
demonstrated. A directional casing drilling system has been run sufficiently to prove that directional drilling with casing can be practical with casing sizes from 5-1/2” to 13-3/8”. The system uses a wireline retrievable directional drilling assembly, positioned in the lower end of the casing, to replace the conventional directional tools used when drilling with drill pipe. These tools have been used to drill to inclinations greater than 90 degrees and have been retrieved and re-run at inclinations ranging from vertical to horizontal. The directional casing drilling system can be used for a broad range of directional applications to capture the proven advantages of casing drilling that have been demonstrated for vertical wells.

Note: Casing Drilling is a trademark of Tesco Corp

From the Tesco Corp Website

The CASING DRILLING® process uses standard oilfield casing to drill the well and then leaves it in place to case the well. This process makes it possible to speed up drilling 20 to 30 percent or more, by eliminating drill-string tripping and the problems associated with it. Drill bits and other downhole tools are lowered and retrieved via wireline inside the casing and latched to the bottom-most joint of casing. This safer and more efficient process will change forever how wells are drilled. Almost any drilling rig can be adapted to use TESCO's CASING DRILLING® technology. Rigs with existing top drive systems are readily converted, either permanently or temporarily, by installing a wireline system for running and retrieving the drilling tools. Portable TESCO Top Drive Drilling Systems can be easily installed on rigs without top drives. Converted rigs lose none of their conventional capabilities.

CASING DRILLING® delivers all of the functionality of conventional drillpipe drilling, including:

• Vertical or directional;
• Steerable motor assemblies
• Rotary steerable systems;
• Logging while drilling;
• Coring;
• Retrievable or non-retrievable systems.

Benefits of the CASING DRILLING® Process

For operators, CASING DRILLING®:

• Reduces drilling time and lowers costs
• Improves wellsite safety and well control
• Reduces unscheduled events
• Provides a quicker return on investment
• Lessens environmental impact
  

For drilling contractors, CASING DRILLING®:

• Eliminates the need for drillpipe and drill collars
• Eliminates the need for double and triple masts and heavy setback areas
• Makes rig moves easier
• Reduces labour requirements
• Reduces fuel consumption and wear on equipment
• Lessens the chance of pipe-handling incidents
• Lowers capital requirements
  

For service companies, CASING DRILLING®:

• Opens up a new service market
• Provides an additional application for existing tools and an opportunity to develop new tools to gain market share
• Extends tool life by protecting tools during running and retrieval
• Reduces time and risk in recovering from down-hole tool failure

Life on an Offshore Rigs

This post is about the offshore drilling enthusiasts. It gives a good account of life on an offshore rig, covering pretty much all its aspects. A must see if you are interested in working on an offshore oil rig.

Cleaning the Drilling Fluid

The purpose of a drilling fluid cleaning system is to remove the suspending solids (drill cuttings) entrained in the mud. High solids or sand content increases the fluid density, which leads to the following problems:

• High fluid density causes pressure in the formation of the borehole. This pressure drives the drilling fluid through the filter cake into the formation, leads to excessive drilling fluid loss to the formation, and extends well development time required to remove the mud from the formation.


• As the fluid density increases, the pressure required to move the fluid up the borehole also increases, leading to high mud pump pressure requirements.


• High solids or sand content also leads to significant abrasion in the drill tooling as the fine particles are re-circulating through the mud pump and drill string. Washed out drill strings and mud pump valves/seats, along with leaking swivel packing, are caused by the recirculation of sand through the system.


• If the gravel pack is emplaced in the annulus through drilling fluid with a high sand content, the fines will be entrained in the gravel pack leading to increased well development costs and reduced well yields.

Drilling fluid in a typical direct mud rotary drilling operation is directed through the following path:

1. Clean fluid is pumped from the mud pump into a flow line to the drill rig.


2. The drill mud travels down the inside of the drill pipe to the bit.


3. As the fluid exits the bit nozzles, heat and drill cuttings caused by friction, are carried away from the bit face.


4. The cutting’s laden fluid travels up the annulus between the drill pipe and the borehole wall.


5. The fluid is typically contained at the ground’s surface within an above ground pit at the drill rig.


6. A transfer pump moves the fluid to the cleaning unit.


7. The fluid enters the fluid cleaning system at the “possum belly” and flows across the first linear motion shaker called the scalping shaker. This “first cut” removes the large cuttings from the mud.


8. The fluid falls through the scalping shaker into a pit where some settling occurs.


9. Another pump drives the partially cleaned fluid through a set of hydro cyclones, which removes sand and silt particles.


10. The hydro cyclone discharge is directed onto a second linear motions shaker with small mesh size screens (140-200), where the sand size particles are removed from the drilling fluid.


11. The cleaned mud is then returned to the mud pump and the cycle is repeated

Linear motion shale shakers employ the latest in technology by allowing a finer screen on the shaker. This results in more solids removed from the mud and a drier solids discharge from the unit.

How drilling takes place?

Drilling a well to penetrate the subsurface sounds easy enough when in fact it is anything but. Drilling for oil is a monumental task that involves careful planning, huge financing and accurate execution. Having said that, sometimes it can become a bit too overwhelming to imagine what actually goes on in the subsurface during drilling. For this very purpose i would like to share this short but effective animation video, demonstrating a couple of the key aspects of drilling; namely the role of the drilling fluid and the rotation of the drill bit cones which move independent of each other as well as being independent of rotation of the drill string.

Properties of drilling fluid you must know

Drilling fluids perform some very important functions during drilling. The efficiency of a drilling fluid to perform these functions depends upon its properties. The following are some important properties of drilling fluids that effect its performance.

Viscosity
It is the resistance to flow. Molasses has a higher viscosity than water. Viscosity is measured by the use of a Marsh funnel. The device measures the time required for a unit volume of fluid (one quart) to drain through the funnel. Fresh water at a temperature of 70° has a flow time of 26 seconds through the Marsh funnel.

Density
It is mass per unit volume. Drilling fluid densities are measured in pounds per gallon (ppg). The density of water is approximately 8.3 ppg.

Fluid Loss Control
Water loss and wall building (filter cake) tests are performed to API standards by measuring the amount of liquid forced from the mud, though a filter paper to a set pressure and time (normally 100 psi at 30 minutes). The filtrate or water passing through the filter paper and the thickness of the filter cake is measured. Please note that the filter cake does not structurally prevent the borehole wall from collapsing. The filter cake only minimizes the amount of drilling fluid that penetrates into the formation.

Sand Content
Sand content is measured as a percent of total fluid volume of particles retained on a 200-mesh sieve.

Gel Strength
It is a measure of a fluid’s ability to hold particles in suspension. Gel strength is measured on a concentric cylinder viscometer.

Field personnel on a periodic basis, normally measure density, sand content, and fluid loss, during drilling operations. The testing equipment is inexpensive and easy to use with minimal training. A typical range of fluid properties for drilling in unconsolidated formation are as shown below:
DENSITY Less than 9 pounds Per gallon (ppg)
FILTER CAKE Approximately 2/32”
SAND CONTENT Less than 1%
VISCOSITY 32–48 seconds
The above parameters should be modified on a site-specific basis. However, the sand content should remain below 1% in order to maintain the proper mud weight and viscosity.

Drilling fluid - the lifeblood of drilling

Mud rotary drilling is a method of drilling a borehole into the subsurface by rotating a string of drill pipe and bit against the formation. By circulating water based drilling fluid, the drilled material (cuttings) is carried to the surface. This drilling method is used in the environmental or water wells, mining, geotechnical and oil/gas drilling industries. A complete drilling fluid system must be properly designed in order to efficiently construct a well. The two main parts of the fluid system consist of the actual drilling fluid, and the solids separation equipment designed to remove the cuttings from the mud at the surface.

What does drilling fluid do?

Removes material (cuttings) from the borehole
The drilling fluid carries the drilled material to the ground surface either by viscosity or velocity.

Cools and lubricates the bit
The drill bit becomes hot due to friction generated during the drilling process. As the drilling fluid passes through the bit and exits the jets/nozzles, the excess heat is removed and carried up the borehole.

Cleans the drill bit
When the drilling fluid exits the bit jets, the fluid’s velocity removes material from the bit teeth and the cuttings from the bit formation interface. This prevents the cuttings from being re-cut or re-ground.

Controls fluid loss
As the fluid moves from the borehole into the formation, clay particles are deposited on the borehole wall. The clay particles form a barrier limiting the amount of drilling fluid penetrating the formation. This barrier, called a filter cake, is important for the stability of the borehole. Additionally, well development time is reduced if fluid loss to the formation is limited.

Stabilizes the borehole
The drilling fluid’s weight in the borehole must overcome the formation pressure to pre¬vent the borehole from collapsing. Also, the fluid prevents formation swelling by “coating” the formation with an impermeable barrier.

Lubricates the drill pipe
The drilling fluid reduces friction between the drill pipe and the rising cuttings, and also between the drill pipe and the formation.

Suspends cuttings
When the mud pump stops, the drilling fluid velocity stops. The fluid must have enough gel strength to keep the drilled material (cuttings) in suspension until the mud pump activates.

Horizontal Directional Drilling

Horizontal oil and gas drilling has become one of the most valuable technologies ever introduced in the business. It is an enhanced oil recovery (EOR) or gas recovery method that is becoming more and more popular as the price per barrel of oil gets higher.

Unlike a directional well that is drilled to position a reservoir entry point, a horizontal well is commonly defined as any well in which the lower part of the well bore parallels the oil zone. The angle of inclination used to drill the well does not have to reach 90° for the well to be considered a horizontal well. Applications for horizontal wells include the exploitation of thin oil-rim reservoirs, avoidance of draw down-related problems such as water/gas coning, and extension of wells by means of multiple drain holes.

Cost experts have agreed that horizontal wells have become a preferred method of recovering oil and gas from reservoirs in which these fluids occupy strata that are horizontal, or nearly so, because they offer greater contact area with the productive layer than vertical wells. While the cost factor for a horizontal well may be as much as two or three times that of a vertical well, the production factor can be enhanced as much as 15 or 20 times, making it very attractive.

Purposes of Directional Drilling

Inaccessible Locations - Quite often, a target payzone lies vertically beneath a surface location that is impractical as a rig site.

Multiple wells drilling from a single site - perhaps the most common application for drilling is associated with offshore production platforms. It is more economical, in most cases, to drill a number of directional wells from a single platform than to build individual platforms for vertical wells.

Sidetracking - the primary purpose is to deviate the wellbore around and away from an obstruction in the original wellbore such as a stuck drillstring.

Relief Wells - possible the most spectacular applications of directional drilling a relief well to intersect a blowout well near the bottom so that mud and water can be pumped into the blowout well.

Multiple targets - geologists may define multiple targets for a prospect that cannot be drilled with a vertical well. It may be necessary to drill through one target and alter the direction of the well to reach the next target, at a greater depth.