Module Code: BD415024S MARKETING DESIGN & INNOVATION

A Critique of Directional Casing While Drilling Tools

Prepared by: S.I.D. – 1031424 Word Count – 2948

S.I.D. – 1031424

A critique of directional casing while drilling

List Of Abbreviations

1. BHA – Bottom-hole assembly 2. DCwD – Directional Casing While Drilling 3. DLA – Drill-Lock Assembly 4. LWD – Logging while drilling 5. MWD – Measurement while drilling 6. PDM – Positive displacement motor 7. R&D – Research & development 8. RSS – Rotary Steerable Systems 9. SDL – Steerable drilling liner

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S.D.I. – 1031424 A critique of directional casing while drilling TABLE OF CONTENTS TOPICS Page PRODUCT SELECTION & REASONING WHAT IS DCwD? DCwD DEVELOPMENT DCwD COMPARISON DESIGN ELEMENTS OF DCwD VALUE & BENEFITS OF DCwD BRAND APPEAL CONCLUSIONS & RECOMMENDATIONS APPENDICES REFERENCES BIBLIOGRAPHY 3 5 6 8 10 13 17 19 21 22 23 3 .

delivering. under the sponsorship of ConocoPhillips. and processes for creating. under harsher conditions than ever before. producing and fiscalizing oil and gas. This product targets energy companies who earn revenue by exploring for. The product that I have selected to critique is the innovative “Directional Casing while Drilling” (DCwD) tools initially developed. set of institutions. Marketing is defined by the American Marketing Association (AMA) as "the activity. or the useful application of new inventions or discoveries. Halliburton and Weatherford have followed and are currently offering a similar product under different trade names. both offshore and on land. DCwD will greatly enhance success rate of finding new and previously inaccessible reserves. Drilling is a complex process especially in these times where all the “easy” oil and gas has been found. communicating. “The business enterprise has two and only two basic functions – Marketing and Innovation. 4 . and exchanging offerings that have value for customers.I. This is a huge global market and the ability to capture and retain market share is based on affordable technological advancements.D. DCwD is still a relatively new technology that won World Oil 2008 “Best Drilling Technology Award”.” McKeown (2008) The product was also chosen because it is a continuous innovation in the energy (and specifically drilling) industry. and society at large. clients. This product was chosen since it is a prime example of how “cobranding” impacts both marketing and innovation. marketed and patented by Schlumberger in association with Tesco Corp. Baker Hughes.S." Innovation is defined as “a change in the thought process for doing something. Marketing and Innovation produce results: all else is cost” Drucker (1953). Wells are now being drilled in deeper waters. – 1031424 A critique of directional casing while drilling Product Selection and Reasoning “Not to innovate is to die” Freeman (1982). partners. As a Petroleum Engineer new technological developments in the industry make my work easier.

– 1031424 A critique of directional casing while drilling Innovative technologies such as DCwD are required to overcome new and existing problems and challenges. Oil and gas is what currently drives and maintains industries and is hence very critical to countries worldwide. total worldwide energy consumption was 474 exajoules (474×1018 J) with 80 to 90 percent derived from the combustion of fossil fuels. The world’s energy consumption is almost totally based on petroleum. BP. 2009). “In 2008.S. any innovation or technological advancement that can assist in finding and producing them economically is of great importance both on a personal and global level.D. Since hydrocarbons are not renewable.” (Source: Statistical Review of World Energy 2009.I. 5 . Oct 24.

Casing Drilling: This involves using standard oilfield casing as the drillstring instead of drillpipe/collars to drill the well. DCwD: This innovation combines both the directional RSS BHA with casing instead of drillpipe. Directional/horizontal drilling is used where vertical access into the reservoir is difficult or not possible. The RSS BHA is retrievable when the casing is set for all drilling jobs and this allows the operator to use the drill bit of choice. 80% of casing drilling jobs involves running a nonretrievable bit to the bottom and leaving the bit in the hole after the casing is set. Directional/Horizontal Drilling: This involves deviating a wellbore to a target given lateral distance and direction from the vertical.D. The other 20% allows bits and other downhole tools to be lowered and retrieved via wireline inside the casing and latched to the bottom-most joint of casing.S. The bit is drilled out (lost) when the next set of casing is to be run.I. Special bottom-hole assemblies (BHA’s) known as RSS which incorporate measurement-while-drilling (MWD) and logging-while-drilling (LWD) are used to allow directional/horizontal drilling with continuous rotation from surface. – 1031424 A critique of directional casing while drilling What is DCwD? DCwD uses a combination of rotary steerable systems (RSS) to provide directional drilling capabilities with casing as the drillstring. the casing is left in place to case the well. Vertical drilling takes place until a planned depth (kick-off point) where the well begins to deviate. DCwD allows deviated wells to be drilled using casing as the drillstring. Casing drilling is mainly used to reduce hole problems when drilling into difficult formations. Once the casing point is reached. 6 .

MWD and LWD systems. Appendix 1 shows a timeline of how drilling tools evolved over the years to suit market needs.I. with Schlumberger bringing their expertise in the directional and measurement area and Tesco’s proficiency in casing drilling. and made approved use of certain specified trademarks belonging to the other company. 2007) As hydrocarbons become increasing difficult to find due to harsher environments both downhole and offshore.D. including TESCO's CASING DRILLING® and the Schlumberger (patented PowerDrive) directional drilling. innovations and technological advancements are needed to assist operators in finding new reservoirs and producing the hydrocarbons economically. “Tesco Corporation ("TESCO") announced that it has entered into a non-exclusive Marketing Agreement with Schlumberger. TX. As wells became deeper. The agreement provided that the two companies will work together to identify opportunities to create value for customers by combining the use of their respective proprietary drilling technologies. This is “… an agreement between two or more partners to share knowledge or resources. Shelburn & Rogers (1995). – 1031424 A critique of directional casing while drilling DCwD Development DCwD developed as a result of ConocoPhillips’s vision and Schlumberger’s and Tesco’s commitment to research and development (R&D) and their strategic alliance. which could be beneficial to all parties involved” Vyas.S. cable tool drilling was the preferred method of drilling since oil was shallow and easy to find. HOUSTON. For this purpose. a combination of rotary drilling 7 . This method was percussive and utilized a chisel. Dec 17. In the early days of the petroleum industry (late 1800’s). rotary steerable. On December 17th 2007.” (Source: PRNewswire-FirstCall. each company promoted the other's equipment and services. Morrison and Mezentseff (1997) suggest that “strategic business alliances will only achieve a sustainable competitive advantage if they involve learning and knowledge transfer.” This is exactly what occurred.

As a company develops a product.I. The early 1900’s also saw the development of cementing processes to hold casing strings in place to protect wells integrity. 8 . It is the process by which technology developed for one purpose is employed either in a different application or by a new user” Langrish et al. As a result of well stability problems. but this method had wellbore stability problems.D. When it was realized that petroleum could be found offshore. new rigs and platforms were developed in the 1930’s to go offshore. technologies and innovations are shared.. (1982).S. In 2001. In 1998. Even though petroleum companies are competitors. Upon successful testing. Directional/horizontal drilling with mud motors resulted in the 1970’s. the mud motor was eliminated completely and RSS was developed. due to reservoir inaccessibility and a realization that increasing the contact area of a reservoir with the well (either by deviated or horizontal drilling) increases flowrate and production. ConocoPhillips saw a need and tested a unique combination in 2007. casing drilling was developed due to lost circulation and wellbore stability problems associated with problem formations. they assisted Schlumberger and Tesco with full-scale development and DCwD was innovated. In the 1980’s LWD/MWD evolved from logging since “real-time” data was needed on drilled formations and their fluid content. This promotes healthy competition within the global village of the petroleum industry. another company innovates and pushes the technology further resulting in consecutive progressive technological advancements within the market. – 1031424 A critique of directional casing while drilling with bits were developed to drill harder rock (early 1900’s). “Technology transfer is the application of technology to a new use or user. long thin reservoirs and time. Logging tools were also developed around this time to determine what formations were drilled into and what fluids were contained in them.

They should however.” Trott (2008) and adapt their product to suit. less downtime and faster drilling. Grant (2003) refers to first-mover advantage as the advantage gained by the initial occupant of a market segment in terms of resources. It combines their patented “Autotrak” RSS with their patented “HRD-E” setting tool and incorporates liners instead of long casing strings This is the natural progression from DCwD. 9 . its reception by customers and the continuing attention given to its improvement.D. market share and profit-margins. Halliburton. they gained a competitive advantage within the oilfield. seminars. be able to benefit from second-mover advantages which analyses “… how (the product) is launched. – 1031424 A critique of directional casing while drilling DCwD Comparison Since Schlumberger and Tesco were first to market this new innovation. case studies and in-house presentations to energy companies. The other service companies consequently had to react to suit the market needs. however since the application is new on the market.I. In 2010. Baker Hughes developed a DCwD patented as “Steerable Drilling Liner (SDL)”. The main difference between the brands is Schlumberger has more experience (in terms of footage drilled and hours run) in using the DCwD than Halliburton since they were the innovators of the technology. This experience leads to fewer problems. teething problems will still have to be worked out. web site. downloadable material.S. after seeing Schlumberger’s success with the DCwD partnered with Tesco to combine their “Geo-pilot” patented RSS and provide DCwD to operators. Their communications strategy was through public relations. conferences and trade shows.

Weatherford’s system only provides limited logging options which affects drilling success. Weatherford’s systems are not steerable and are mainly used for vertical or deviated wells where an RSS is not required. This information is vital and Tesco’s system allows full logging to be possible.I. The bit is drilled through and the process continues. 10 .S. – 1031424 A critique of directional casing while drilling Weatherford developed a cheaper nonretrievable system whereby casing drilling can take place but the casing and bit is cemented in place. The main difference between Weatherford’s system and Tesco’s system is in the area of logging and data collection. However.D.

D. – 1031424 A critique of directional casing while drilling Design Elements of DCwD The following is the design of the DCwD tool combination.I. Figure 1: DCwD DLA Connecting BHA to Casing Profile Nipple Internal Tandem Stabilizer PDM Casing Shoe Vibration Sensor Sub Under Reamer Roller Reamer LWD & MWD System RSS Bit 11 .S.

since the bit does the drilling. 2. 3. Tool Combination: Bit – Polycrystalline diamond compact (PDC) cutters used to cut rock together with the rotating drillstring. The cylindrical shape allows easy rotation and reduces friction thereby increasing rate of penetration (ROP).  RSS – A fully steerable rotating tool that allows bit to be directed from surface with LWD / MWD to ensure precise well placement. This sees the most “pressure”. Bit selection is very important depending on formation to be drilled.I. Shape – The tools that make up the DCwD are all cylindrical in shape. the “soul” of DCwD – Casing is used as drillstring and DLA is situated close to bottom of string. Data is transmitted from the bottom of the drillstring through the drilling fluid. Operators’ main concerns are functionality and benefits. Increasing ROP increases drilling rate and decreases total cost since well will be completed sooner. Drill Lock Assembly (DLA). Rotation of casing is    12 . ROP decreases.S. Colour – The tools are mainly silver due to their metallic nature. If bit becomes dull. – 1031424 Design Elements (Features): A critique of directional casing while drilling 1. however colour plays no part in the tools performance. These 3 tools are the “heart” of directional/horizontal drilling. to surface for interpretation in real-time. Transmits information about the formations types being encountered and fluids contained.D. This is due to the rotary drilling process. PDM – Transmits and converts hydraulic energy by the drilling fluid to rotary motion to increase ROP.  LWD & MWD system – Gives real-time information for geosteering and formation evaluation.

S.D. seeing the benefits that could be derived from the 2 companies. BHA is set and retrieved by a mechanical “land-and-lock” profile. Relevance and usefulness – DCwD is extremely relevant in today’s economic environment. However. increases in oil price to >US $80/bbl is a sign that economies are recovering and oilfield activities will resume. 5. many companies reduced their exploration activities since the energy prices also plummeted from heights of >US $100/bbl to < US$40/bbl. Once the depth is reached for the casing to be set. ConocoPhillips had already benefitted from these companies individually. there will be an associated increase in hydrocarbon consumption. the DLA can release the BHA and it can be retrieved. but with vision and imagination. – 1031424 A critique of directional casing while drilling done via a top-drive system (at surface). with the economic downturn. 13 . to create marketing synergy. DLA connects BHA to casing and plays an important part in BHA’s retrieval. In 2008. Imagination – DCwD was a combination of 2 different drilling technologies that were previously conceptualized and perfected by separate companies.I. The usefulness of DCwD will be described in the following section. 4. Once it proved successful ConocoPhillips sponsored the full development of DCwD. initially tested an application of DCwD. There will be a need for further exploration and production activity to satisfy the energy requirements. As countries further develop. This is the main feature that makes the DCwD so effective. Schlumberger and Tesco entered into a marketing agreement to “co-brand”.

the following are values and benefits that operators can derive: 1) Allows access to reservoirs where vertical drilling is not possible/economic – Vertical drilling may not be possible and/or economic in: environmentally sensitive areas.org 14 . mountainous areas. 2) Deviated/horizontal wells increases productivity – A deviated well will make more footage contact in a reservoir than a vertical well (from trigonometry). Due to the increase in reservoir contact. a significantly greater surface area of the reservoir will be drained and hence increase productivity. – 1031424 A critique of directional casing while drilling Value & Benefits of DCwD Since DCwD features a combination of directional/horizontal and casing drilling.S. areas just offshore. Figure 2: How footage increases with deviated and horizontal wells (D1<D2<D3) D1 D2 D3 Source: www. DCwD can be used to enter the reservoir while drilling from a previously (or cheaply) prepared wellsite.horizontaldrilling.D. Due to economic expense that operators would suffer to prepare the wellsite for vertical drilling.I.

Casing is then run into the hole (tripped) to bottom and cemented in place. 6) Prevents drillstring sticking – In deviated/horizontal wells. vertical wellbores are only able to extract oil and gas from a small area surrounding the wellbore. the drillpipe must be pulled from the well (tripped) and the hole must then be conditioned (ensure drilling fluid in hole has correct weight and viscosity). Cuttings can fall back unto the BHA and cause the BHA to “pack-off”. the BHA can be removed and the casing can be cemented at once. If you can avoid tripping pipe. there is a problem of proper hole cleaning. This greatly reduces the trip time and saves on drilling costs since the well will be completed in less time. after a section of hole is drilled. there will be reduced pipe handling by personnel. However. Hole cleaning occurs when the cuttings made by the bit is not brought to surface efficiently. DCwD also reduces the risk of a blowout which again improves safety. and the drillstring to stick. “The majority of nonproductive time in any drilling operation comes when you are tripping pipe. That is when most well control problems show up and when wellbore stability issues really become evident. 4) Reduced trip time – During normal drilling operations with drillpipe.” (John Boyle. This will reduce the risks involved and hence improves overall safety. flat reservoirs and drain a significantly larger area. horizontal wells use lengthy lateral arms to extend into these long. since the casing is the drillstring. you can sidestep much of the typical nonproductive time. – 1031424 A critique of directional casing while drilling 3) Access thin reservoirs – Where oil and gas reservoirs are wider (longer) than they are thick. Tesco 2008) 5) Improved personnel and equipment safety – Since there is reduced trip time and reduced casing strings. With DCwD.D.S. once the section of hole to be drilled is completed. This is a major problem since 15 . VP Casing Drilling®.I. Less time means less rig rental which leads to cost savings.

ashx 16 . casing rotation and contact with wellbore wall reduce or eliminate fluid losses to the producing horizon and mitigate mud invasion through permeability. – 1031424 A critique of directional casing while drilling stuck pipe can eventually lead to blowouts. continuous contact of casing as it rotates against wellbore wall.D. 7) Mechanically strengthens wellbore – Reservoir productivity is enhanced by the plastering effect (smearing) that results from smooth. With DCwD the casing is already in the well keeping the hole open and allowing the annulus size (distance between drillstring and openhole) to be minimized.slb.I. Drilled solids are packed into the porous and permeable portions of the formation as drilling fluids carry the cuttings up the annulus. Figure 3: Diagram showing how casing strengthens wellbore Source: http://www.com/~/media/Files/drilling/brochures/drilling_applications/directional_casing. Because DCwD minimizes annulus size.S.

This will lead to increased worldwide energy and consequently sustainability of countries in terms of development and progression.I. wellbore stability is not an issue since the casing is in place.D. – 1031424 A critique of directional casing while drilling 8) Reduced well construction costs – Well construction in fields with troublesome formations and/or well stability problems sometimes require extra casing strings to be run. 17 . With the use of DCwD.S. This reduces the number of extra casing strings needed and hence reduce the overall cost of well construction. These extra strings increase the total cost of well construction. holding the wellbore open and stable. Combining all these benefits will result in more trouble-free wells being drilled economically to find and produce oil and gas.

oil and natural gas reserves.S. credibility. 18 . Approximated 11. DCwD was first tested in 2007 on the offshore well 2/7B-16A drilled in the North Sea from the Eldfisk Bravo platform. project management. innovation. ConocoPhillips is the third-largest integrated energy company in the United States. – 1031424 A critique of directional casing while drilling Brand Appeal Aaker (1991) states that “Brand equity is a set of assets (and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm's customers. Tesco Corporation is an industry leader in the development and commercialization of innovative drilling technologies and services. information solutions and consulting services to oil and gas exploration and production companies worldwide. The major asset categories are: 1. Brand loyalty 3. Their names are synonymous with competency. Perceived quality 4.D. based on market capitalization. expertise and results. Brand associations" The companies involved in the development of DCwD are considered “brands” in their own right. tubular services and casing drilling. After this success. Brand name awareness 2. They are known worldwide for their technological expertise in reservoir management and exploration & 3-D Seismic. other operators worldwide have utilized this innovative technology with much success.000’ was successfully drilled and correctly positioned.I. They have 3 main divisions: Top drives. operated by ConocoPhillips. Schlumberger is the leading oilfield service provider of technology.

DCwD World’s fastest rate of penetration for a 13 3/8-in.org/directional-casing-while-drilling-applied-to-improve-high-angle-tophole-drilling-from-producing-platform-6383) Due to the companies involved in the DCwD development. – 1031424 A critique of directional casing while drilling The technology was recently used in 2010 by PETRONAS in a project from a producing platform in Malaysia. 19 . DCwD job World’s highest-angle directional well with 13 3/8-in. “The successful operation led to several records:     World’s deepest 13 3/8-in.I. DCwD World’s first application of Gyro MWD with DCwD” (Source: http://drillingcontractor. However the success of DCwD thus far in various environments under different conditions serves to strengthen its brand appeal. Numerous papers and case studies have been written about this innovative technology and it has even won the World Oil 2008 “Best Drilling Technology Award”. The project was completed successfully in terms of increasing ROP and lowering the time and cost to drill the top-hole section of the well.D.S. it would have initially appealed to the oilfield market based on Aaker’s (1991) brand equity definition.

The brand combination has a great appeal within the oilfield and its success for various operators only serves to strengthen its brand.D. the market for DCwD is expected to grow since countries are resuming their activity after the economic downturn.S. The features of the DCwD include:      PDC bit RSS LWD/MWD system PDM DLA DCwD provides the following benefits:         Allows access to reservoirs where vertical drilling is not possible/economic Deviated/horizontal wells increases productivity Access thin reservoirs Reduced trip time Prevents drillstring sticking Mechanically strengthens wellbore Reduced well construction costs Improved personnel and equipment safety Even though downhole conditions are getting increasingly difficult. ConocoPhillips due to their vision (and sponsorship) allowed Schlumberger and Tesco to combine their technologies successfully and develop the DCwD.I. – 1031424 A critique of directional casing while drilling Conclusions & Recommendations DCwD has clearly been an innovative technology that resulted out of a need for solutions to previously unsolvable problems. This activity will have a corresponding need for hydrocarbons and will push 20 .

effective and economical way possible. The increasing energy prices will make drilling for new oil and gas deposits worth pursuing.” A recommendation that can be made is for Schlumberger and Tesco to continue their R&D. This will ensure that even better technologies can be innovated to assist operators in tackling the downhole environment in the most efficient.S.I. “R&D programmes are…focused on the business aspirations of the company and its future markets” Trott (2008).D. Roussel et al. (1991) defines R&D: “To develop new knowledge and apply scientific or engineering to connect the knowledge in one field to that in others. – 1031424 A critique of directional casing while drilling energy prices up. 21 .

New technology to be further tested 22 . jack-up.D. submersible rigs Stronger bits for tougher formations Able to deviate from vertical and drill many wells from one platform or where reservoir is inaccessible Allowed logging and measurements while drilling to be taken in “real-time” Eliminated the use of a mud motor. – 1031424 A critique of directional casing while drilling Appendices 1. Can steer bit while rotating Allowed casing to be used as the drillstring to prevent holes collapsing and drillstring sticking Combined casing & directional drilling Replaces long casing sections with short liners.I.S. Drilling Innovations Timeline Year 1859-1920 1900’s Innovation Cable Tool Drilling Rotary Drilling Function/Benefit First method of drilling – Percussion: used rods & chisel  Drilling method changed from percussion to rotary  1906 1930’s 1946 1970’s 1980’s 1998 2001 2007 2010 2 cone rotary rock bit Offshore drilling Diamond bits Directional drilling w/ mud motors LWD/MWD Rotary steerable systems Casing drilling DCwC SDL Logging developed  Cementing developed Able to drill through hard rock More oil and gas to be found.

P. Harvard Business School Press..I.L. Grant. Vyas. and Rogers. the ugly’”. 10. Robert M. Shelburn. The Truth About Innovation.S.“Brand extensions: ‘the good. Journal of Business and Industrial Marketing. Max (2008). Blackwell. functions and framework’. London 6. (2008) VP Casing Drilling®.A. Tesco 4. Boston. Roussel. McKeown. Management Decision. N.M. (1997) ‘Learning alliances – a new dimension of strategic alliances’. W. L.D. Vol.S. (1982) The Economics of Industrial Innovation. P.marketingpower. 8. Morrison. Aaker. Cases in Contemporary strategy analysis. D.F. and Erickson. Vol 35 9. – 1031424 A critique of directional casing while drilling References 1.D. London. Boyle. (1991) Third Generation R&D.A. Saad. M. (2003).C. (1995) ‘An analysis of strategic alliances: forms. 3.(1990). Freeman. 7. http://www. C. (1953) The Practice of Management. 10 23 . UK: Prentice Hall. T.A.aspx. M and Mezentseff.com/AboutAMA/Pages/DefinitionofMarketing. American Marketing Association "Definition of Marketing". Drucker.N.. K. Sloan Management Review 2. the bad. 2nd edition Frances Pinter. Harper-Collins 5. Retrieved 2009-10-30. J.

Macmillan.php 3. Max (2008). Evans.ashx Other: 1. (1982) Wealth from Knowledge. – 1031424 A critique of directional casing while drilling Bibliography Textbooks: 1. 2009 24 . Kotler.com/~/media/Files/drilling/brochures/drilling_applications/directi onal_casing. Principles of marketing (5th ed. Harvard Business School Press. UK: Prentice Hall. K. http://www. 5.A. London 3. Saad. BP.G.epmag. McKeown.S. J.com/features/feature52912/ 2. (1991) Third Generation R&D. London. and Erickson. The Truth About Innovation.A. "Marketing defined". Oct 24.org/directional-casing-while-drilling-applied-to-improvehigh-angle-top-hole-drilling-from-producing-platform-6383 4.S.. M. John Saunders (2008).N.offshore-technology. Statistical Review of World Energy 2009..D. W.com/Magazine/2009/4/item33845. http://drillingcontractor.slb. F. Gary Armstrong. 4.I. Boston. Philip. & Jerans. http://www. Langrish.R. Veronica Wong. P. Prentice Hall (4th ed. http://www. Trott. T.) Websites: 1. Roussel. P (2008) Innovation Management and New Product Development.) 2.