Well Construction Process

Mahmoud Farag Radwan

Subsurface & Integrity Operations Dept. Head
https:\\www.linkedin.com/in/mahmoud-farag-radwan-a9266626
 Mahmoud Farag Radwan

Mahmoud Radwan is a Subsurface & Integrity Operations Dept. Head at AMAL

Petroleum Company (AMAPETCO) with more than 15 years of experience in oil
& gas industry. Mahmoud worked in Well Engineering, Intervention, Integrity &
Short Work-over at several companies, including KDT Global Solutions, CUDD Well
Control, Badr El-Din Pet. Co. (BAPETCO), Qarun Pet. Co. (QPC) and Wadi El-
Biography Sahel Petroleum Co. (WASPETCO).
Also, a freelance instructor at upstream Oil & Gas in Egypt & GCC since 2008.
Mahmoud received a BSc degree in Petroleum Engineering from Al-Azhar
University in 2007.
o Evaluating Sustainable Annulus Pressure (SAP) in Sour Wells and the Possible
Causes to Avoid Recurrence to the Well Integrity Annual Middle East
Conference in Abu Dhabi; UAE in Apr 2015
o Implementing NDT methods for maintenance and inspection to the Asset
Integrity Management North Africa Conference in Cairo; Egypt in Nov 2015
o Feasibility Evaluation of Using Downhole Gas-water Separation Technology in
gas Reservoirs with Bottom Water; paper number: SPE-183739-MS to the 20th
Middle East Oil & Gas Show and Conference in Mar 2017
Publications http://dx.doi.org/10.2118/183739-MS
o Managing the Operational Challenges in Corroded Wells through Well Integrity
Management System to the Improving Brownfield Performance Technical
Convention, in Cairo; Egypt in Dec 2019
o Safe and Economic Attractive Rigless Operations Using a Digital Slickline in
Unmanned Platform with Low Structure Loads and Spacing; paper number:
SPE-202857-MS to the Abu Dhabi International Petroleum Exhibition &
Conference (ADIPEC) in Nov 2020 https://doi.org/10.2118/202857-MS
Reason For Drilling Well
Reasons for drilling a well …

1. Gain information about the sub-surface.

2. Allow production of pore fluids (oil, water, gas).
3. Allow injection of fluids underground.
4. Exploit high temperatures underground (geothermal).
5. Waste disposal (nuclear waste).
6. Training wells.

4
Rig Types
Rig Types

6
 Land Rigs – Heavy Land Rig

• Capable of drilling deeper

than 10,000 ft

• Typical derrick load >

1,000,000 lbs

• BOP rating ≥ 10,000 psi

• Cost around $30,000 / day

7
 Land Rigs – Light Land Rig

• Capable of drilling up to 10,000 ft

• Typical derrick load < 750,000 lbf

• BOP rating 5,000 psi

• Cost around $20,000/day

8
 Land Rigs – Helicopter Portable

• Breaks down into small packages for moving (6000

lbs max)
• Can deploy in locations not otherwise useable
without very high cost (jungle, mountain tops,
inaccessible locations)
• Concept used during slimhole drilling

9
Marine Rigs – Floating - Semi-Submersible

– Rig towed on to
location, then either
anchors or uses DP
(dynamic
positioning).
• Can move off
location fast if
problems.
• Usually uses BOP’s
located at the
seabed.
• Accommodation for
up to 100 people.
• High cost -
$100,000/day up

10
 Marine Rigs – Floating - Drill Ship

• Ship shaped hull,

usually self-propelled
for rig moves
• Often uses dynamic
positioning but may be
anchored
• High storage capacity -
1 or 2 wells without re-
supply
• High cost, can be well
over $100,000/day
11
Marine Rigs – Floating - Drill Ship

• Floating rectangular
barge with self
contained rig on
board
• Sheltered inland
waters (Lake
Maracaibo)
• Can drill to 20,000 ft

12
Marine Rigs – Bottom Supported – Jack up

– Usually 3 legs which

stand on the seabed
– Hull is lowered and legs
raised for rig moves
– Can drill in shallow
waters to 350 ft
– Can cost between $45-
$90,000 per day
– BOP’s are below the
derrick cantilever
– Accommodation for up
to 100 persons

13
 Marine Rigs – Bottom Supported –
Platform
• Self contained rig installed on platform

• Once drilling finished, rig can be removed

or replaced with small workover rig

• Can be “tender supported”

14
 Marine Rigs – Bottom Supported – Other
Platform Types

Tension Leg Platform (TLP) Concrete Gravity Platform (CGP) Guyed Tower Platform
Marine Rigs – Specialist Equipment – Slip
Joint And Riser Tensioners
Slip joint allows relative movement
between the rig and the well (heave,
tide).
Tensioners supports the weight of the
riser and keep the riser top in tension.

The hole through the deck is called the “Moon pool”.

16
Marine Rigs – Specialist Equipment –
Riser Joints and Flex Joint

1. Riser joints contain buoyancy chambers

(reduce load), kill & choke lines and boost
line.
2. Flex joint at seabed allows lateral
movement of rig.

17
Marine Rigs – Specialist Equipment –
Subsea BOP
– Subsea BOP is
positioned on the
wellhead at the
seabed.
– Remote controls from
the surface.
– Accumulator bottles
on the stack allow
operation even if
disconnected by sonic
signals
18
Rig Components
 Exploration and Production Process,
Drilling Involvement
field management & planning
Drilling is involved from
Phase 2 onwards; monitoring & surveillance
– Exploration Drilling
– Appraisal well design & planning

/Development well construction & operations

cash flow
Drilling
production enhancement time
– Field Production
– Field Abandonment data management

Exploration Appraisal Development Production

Drilling is involved in all but the earliest stage and Drilling is responsible for a
large chunk of the necessary capital expenditure on the project.

20
Rig Components or Systems

All rotary rigs have the

same basic drilling
equipment, with the
following major surface
components or systems
– Power system
– Hoisting system
– Fluid-circulating
system
– Rotary system
– Well control system

21
Major Common Rig Components - Overview
Crown Block

Mud Hose Traveling Block

Kelly
Kelly Hook
Rotary Table
Table
Mud Pump Swivel

Draw Works
Casing
Drill Pipe
Bit
24803
Rig Drilling Equipment: Power Generation

Drilling Rig Equipment:

Power generation System
Drilling rigs often have to
operate in remote locations and
so must be able to generate
their own power.
Large diesel-powered internal
combustion engines are used to
generate electrical power for rig
operation.
The hoisting and circulating
systems are the major power
consumers on the rig.
23
 Crown  The main components of the
hoisting system are the
Block
The Hoisting drawworks, crown and traveling
block, hook and elevators.
System  The drawworks includes a
large revolving drum spooled
with wire rope called the drilling
line.
Travelling  The drilling line is threaded, or
Block reeved, over a set of sheaves in
the top of the derrick, known as
the crown block.
 The drilling line then passes
down to another set of sheaves
known as the traveling block.
Hook  A large hook hanging from the
traveling block suspends the
drillstring in the well.
 The elevators, a set of clamps
Elevators attached to the hook, are used
when running or pulling
Drawworks drillstring or casing.
24
 Conventional Rotary
Drilling System  The swivel is found at the
Conventional top of the Kelly and
supports the entire
drillstring weight. The
swivel also allows mud to
Swivel be pumped down the
drillstring while the string
is rotating.
 The kelly is a 40 foot long
pipe with an outer
hexagonal cross-section
that connects to the top of
the drillpipe.
 When drilling, the kelly
passes through the kelly
bushing.
Kelly  The kelly bushing has 4
pins, which slot into 4
postholes in the rotary
table on the drill floor.
Kelly  The rotary table turns to
Bushing rotate the kelly bushing,
Rotary Table thus rotating the kelly and
drillstring. 25
Rotary System- Top Drive
The Circulating System

Drilling Rig
Equipment:
Circulating System
Mud pumps
Four major components
make up this solids-
removal equipment:
shale shakers,
desanders,
desilters,
and centrifuges.

27
 Major Rig Components – Mud circulating Pumps

Mud pumps provide fluids at high

pressures and high flow rates to
the drill floor and well.

3 x Triplex mud pumps 28

Circulating System & Solids Control
 Types of Drilling Fluids

Water-based Oil-based Pneumatic

Non-dispersed Diesel based

Dispersed Mineral Oil based Dry air/gas
Calcium treated Synthetic: Mist
Saltwater based Esters Foam
Low solids Ethers Aerated mud
Polymer Olefins

Selection of the type of drilling fluid systems for a well is based on:
PERFORMANCE, ECONOMICS, and ENVIRONMENTAL CONSIDERATIONS
More than one system may be used in the same well.
Major Rig Components – BOP’s

BOPs allow
the top of the
well to be
sealed
against very
high
pressures and
allow fluid to
be pumped in.

Views of a blowout preventer underneath a jackup cantilever

Drilling Rig Equipment: Well Control System

If necessary, the well can be closed in with blowout preventers.

Blowout preventers, or BOPs, must be installed on the top of the well before drilling even
begins.
32
Drilling Tools
Drillstring: Drill Pipe and Bottom Hole
Assembly
Drill pipe
Heavy Wall Drill Pipe
(Crossover, Jar)
Stabilizer
Drill Collars

Bottom Hole Stabilizer

Assembly (BHA)
Drill bit
Drill Pipe

3 component parts;
 Pipe body
 Tool joint box (female)
 Tool joint pin (male)
 The tool
 Drill Collars
Thick walled pipe, able to withstand high buckling forces. DCs make
up most of the BHA
Used to;
1. Put weight on the drill bit while
keeping the drill pipe in
tension.
2. Control directional
performance.
3. Typically, drilling in a 12-1/4”
hole, 5” drill pipe would be
used and 8-1/4” OD DCs with
an ID of less than 3” would be
made up above the bit. The
wall thickness of nearly 3”
gives a lot of weight and a lot
of mechanical strength.
Drillstring: Drill Pipe and Bottom Hole
Assembly
Drill Pipes

Tension

Bottom Hole Drill Collars

Assembly (BHA) Compression
Crossovers

Within the drillstring, different tools have different diameters

and different connection sizes and types. To allow these to be
made up, a short piece of pipe is used which has different
connections at each end. These are called “Crossovers”.
Drill pipe; connections
NC50

Crossover; NC50 box on

top, 65/8” R pin on bottom

Drill collar; 65/8” R box on

top
Jar
Stabilizers
Run within the BHA to;
1. Control directional
performance.
2. Minimize dynamic
buckling & fatigue
damage to DCs
3. Some stabilizers
have a blade OD the
same as the bit
diameter, others are
“under gauged”
being smaller than
the bit size
Drill String & Bit
Hole is made by turning a
Drill pipe
bit connected to the
bottom of the drill string
and applying weight at the
same time.

The bit is turned either Drill collars

entirely by drill pipe Measurement Bottom
rotation from surface or tools Hole
with the help of a Assembly
Downhole
downhole motor which motor
rotates when drilling fluid
is pumped through it. Bit
Bit Types

Roller Cone

Steel tooth Tungsten Carbide Insert

Fixed Cutter

Diamond Diamond
PDC Natural & Synthetic
Well Construction Principles
 5 PARTS TO DRILLING ANY WELL
1. Preliminary Well Design (High Level)
2. Detailed Well Design
3. Prepare the Drilling Program
4. Drill the Well
5. Analyze and Improve Performance
 BUT BEFORE WE CAN DO THIS WE NEED

A Statement of Requirements – SOR

This is the minimum basic information the Drilling Engineer
needs from the Subsurface Team to commence provisional well
planning
1. Well objectives
2. Formation tops
3. Pore pressure/pore fracture plot
4. Surface location
5. Target location, depth and size
6. Formation evaluation requirement, Data acquisition
7. Well testing or completion information
8. Offset well data
9. Temperature profile
10. Potential hazards
 Well Construction Principles
• Generally a well will consist of conductor, casing, tubing,
wellhead and Christmas tree.
• The conductor protects the casing from seabed to
platform surface, and provides a stable support for the
wellhead and Christmas tree.
• Three or four strings of casing will be run inside the
conductor, with diminishing I.D’s
• Typically 30” conductor.
• 20” Surface Casing
• 13.3/8” Intermediate Casing
• 9.5/8” Production Casing
• 7” Liner
 Type of Casing
1. Conductor Pipe
2. Surface Casing
3. Intermediate Casing
4. Production Casing
5. Liner

1 CONDUCTOR PIPE
 Prevents unconsolidated formations being
eroded.
 Provides flow path for drilling fluids.
 Cemented in pre-drilled hole or pile driven.
 Sizes ranging from 16” – 30” OD.
 Depth varies from surface to 40’ – 400’.
Surface Casing

 Protection in case of blowout & Acts

as wellhead foundation.

 Isolates shallow consolidated & fresh

water formations.

 Cemented along its whole length.

 Sizes ranging from 13 3/8” – 20” OD.

 Setting depth up to 1 500’ below

surface.
Intermediate Casing
 Seals off problem zones, loss
circulation zones, high pressure gas
pockets & soft formations
encountered.
 Protects production casing from
corrosive fluids.
 Cemented up to surface casing shoe.
 Sizes ranging from 7” – 13 3/8” OD.
 Depth depends on total well depth &
conditions encountered, shallow wells
not necessary to set this.
Production Casing
 Set above or through producing
formations.

 Isolates reservoir from other fluid

bearing formations.

 Cemented from intermediate casing

shoe to its bottom.

 Sizes ranging from 5” – 9 5/8” OD.

 Liner
 Shortened casing hangs from
bottom of previous casing through
producing formations.

 Used when geological & pressure

conditions make it hazardous to
penetrate the producing formation
without the hole being protected by
casing.

 Cemented along its length.

 Cost effective
How a Well is Drilled on Land

Step 1: Digging a Cellar

On land, a majority of wells

begin with digging a cellar
from three to fifteen feet in
depth. The purpose of a
cellar is to align the
production Christmas tree at
ground level, providing easier
access to the valves,
chokes, and other equipment.
How a Well is Drilled on Land

Step 2: Running a Conductor

Pipe

The first string of pipe used

in a well is called the
conductor pipe, or drive pipe.
The pipe is usually 30-36
inches in diameter. A large
diameter hole is drilled to
a specified depth, usually
one or two hundred feet, and
the pipe is driven into the
ground..
How a Well is Drilled on Land

Step 3: Connecting the BOP

An adapter flange, or drilling

flange, is welded to the
conductor pipe to connect a
diverter system or a blowout
preventer system to control
wellhead pressure.
How a Well is Drilled on Land

Step 4: Running the Surface

Pipe
A hole is drilled for the well’s
first string of pipe, the
surface pipe, and the pipe is
run in the hole. There may be
several strings of pipe in a
well, each run to a different
depth. The number of strings
is determined by the number
of zones being drilled
through. These can include
fresh water, salt water, and
potential production zones.
Each zone is isolated, or
cased off, until it is to be
produced. .
How a Well is Drilled on Land

Step 5: Connecting the

Surface Pipe

The surface pipe is

cemented in place back to
the surface. This holds the
pipe in place and seals off
the zone. A cement plug is
left in the pipe so that the
BOP system may be
disconnected safely. The
BOP is then removed from
the adapter flange.
How a Well is Drilled on Land

Step 6: Cutting the Conductor

Pipe and Surface Casing

The surface pipe is drained,

the adapter flange (or drilling
flange) is cut off, and both the
conductor pipe and the
surface casing are cut to the
proper height to allow the top
of the completed wellhead
to be at ground level.
How a Well is Drilled on Land

Step 7: Installing the Casing

Head Housing and Base
Plate

The casing head housing is

welded in place on the
inside diameter and the
outside diameter of the
surface casing. The
housing is then tested to
assure there are no leak
paths in the welds.
How a Well is Drilled on Land

Step 8: Installing the BOP

System

The BOP system is installed

above the casing head
housing and then tested. To
test the BOP system, the test
plug is made up on the drill
string and lowered through
the BOP system onto the
casing head bowl. Pressure
is applied from above the
plug to test the BOP system.
How a Well is Drilled on Land

Step 9: Installing the Casing

Head Wear Bushing

A wear bushing is installed to

protect the interior of the
casing head from damage
by drilling equipment.
How a Well is Drilled on Land

Step 10: Installing the

Intermediate String

A hole is drilled for the

intermediate string and the
casing is run in the hole
and cemented in place. A
cement plug is left in the
intermediate casing, just as it
was in the surface casing. .
How a Well is Drilled on Land

Step 11: Installing the Casing

Hanger and Casing Spool

The intermediate casing is

suspended from the block
above the rig floor, the BOP
is picked up, and the casing
hanger is installed on top of
the casing head. Holes are
cut in the casing to allow the
drilling fluids to drain out of
the casing riser. When the
fluid has drained, the casing
is cut off to the appropriate
height and the casing spool
is installed.
How a Well is Drilled on Land

Step 12: Installing the BOP

System

The BOP system is installed

above the casing spool and
then tested. To test the BOP
system, the test plug is made
up on the drill string and
lowered through the BOP
system onto the casing head
bowl. Pressure is applied
from above the plug to test
the BOP system.
How a Well is Drilled on Land

Step 13: Installing the Wear

Bushing

The wear bushing running

tool is made up on the drill
string and the wear bushing
installed on the running tool.
The wear bushing is then
lowered through the BOP
system, until it rests in the
casing spool bowl, then is
locked into place. The
running tool is removed and
drilling resumes.
How a Well is Drilled on Land

Step 14: Running the

Production Casing String

The production casing string

is usually run to the total
depth of the well. A hole is
drilled for the production
casing and the casing is run
in the hole and cemented
into place. A cement plug is
left in the production casing,
as in the previous steps.
How a Well is Drilled on Land

Step 15: Installing the Casing

Hanger and Tubing Spool

The production casing is

suspended from the
elevators at the rig floor, the
BOP is picked up, and the
production casing hanger is
installed in the same way as
the previous casing hanger.
The tubing spool is installed
in the same way as the
casing spool. After the spool
has been installed, the seals
and connections are tested,
and the BOP system is
reinstalled..
How a Well is Drilled on Land

Step 16: Running the

Production Tubing

The production tubing is

installed inside the
production casing. Unlike
casing, the production tubing
is not cemented in the well
so it may be removed later, if
necessary.
How a Well is Drilled on Land

Step 17: Installing the Down

hole Packer Assembly

A down hole packer

assembly (a type of seal
assembly) is run and
installed in the
production casing to seal the
reservoir from all strings of
pipe, except the production
tubing.
How a Well is Drilled on Land

Step 18: Installing the Tubing

Hanger

The tubing hanger is installed

on the tubing at the rig floor,
then lowered into
the bowl of the tubing spool.
The packer seals are tested,
and a backpressure valve is
installed in the tubing hanger
so that the BOP can be
removed safely. After the
valve has been installed the
BOP is removed. .
 How a Well is Drilled on Land
Step 19: Installing the Christmas Tree
The production Christmas tree, sometimes
called the flow assembly, controls the flow
of the well. It is made up of a seal flange, or
tubing head adapter, a series of valves, and a
choke. The valves are stacked vertically and
horizontally to provide backup should a
valve fail. Each Christmas tree has at least
one actuated surface safety valve to shut
down the well in an emergency and prevent
damage to equipment downstream. The
Christmas tree is connected to a flowline,
which transports the well’s fluid or gas.

The Christmas tree is oriented properly,

picked up, lowered over the neck of the
tubing hanger, and connected to the tubing
spool. The connections and seals are tested,
and the well is now ready for production
testing.
 Casing Design : Basic Construction

1 1. 30” conductor
2 2. Conductor setting depth
3
4 3. 20” surface casing
4. 20” shoe
5
5. Cement
6
7 6. Formation open to C annulus
8 7. 13 3/8” casing
9 8. Formation open to B annulus
10
9. 9 5/8” production casing
10. Liner hanger
11
11. 7” Liner
12 12. TD – Total Depth
 Tubing Hanger

Well COMPLETION Control Line

Flow Coupling
COMPLETION ACCESSORY: SCSSV Landing Nipple
1 Anchoring Device
 Landing Nipples Top No-Go Nipple

2 Circulation Device
 SSD SPM
 SPM
Top No-Go Nipple
3 Isolation Device
 Packer SSD
Top Packer
 Tubing Seal Assembly, PBR
4 Anti-Erosion Device SSD

 Blast Joint
 Flow Coupling
5 Others
 WLEG
 Perforated Joint
 Control Line
 Tubing Hanger
Producing Zone 2 Blast Joint
Btm Packer
Bottom No-Go Nipple
Perforated Joint
WL Entry Guide
Producing Zone 1

PRODUCER COMPLETION SCHEMATIC

Drilling Organization Example

73
Rig Crew

– Two crews on board

work 12 hour shifts
– Driller is in charge -
Plan and execute drill
floor operations
– Front line for safety

74
Drilling Costs
Drilling Time vs. Depth

Actual

Plan
 Well Montage
Mud,
Depth, m Casing Casing / P Type/ Cement Risks/
LOT/FIT, Directional Bits
Formations design Test Weigh Tops, m Hazards
SG
TVD MD SG
Air Gap 43
128
30” conductor,
Soil Units WT 1.5” Merlin Deviated
D (driven)
(Reactive clays) N/A 1.23 N/A Conductors N/A Unstable zone
Landing ring – (+/- 3 deg)
SU1-SU8 317.5 mBRT
370 370
24” 156 ppf X- Ultradril 22” x 28
Apsheron To Top of +/- 10 deg @ Rock Unstable zone
56, XLF WBM 1.19 1.38
(Calcareous 482 482 SG
Liner the shoe Bit/UR
20” 147 ppf Ultradril 22” x 26
clay) X-56, BOSS/ WBM PDM Rock Unstable zone
1.52 To Mud line
702 704 1200psi 1.33SG Bit/UR
Surakhany 16” 84 ppf
Potential HP gas, oil or
(Mudstone with L-80 Dino 17 ½ x 20”
50m below water flows w 1.4SG
Sandstones VAM / SOBM/ 1.8
3000psi 1.44 SG previous shoe RSS UR/PDC from thin sandstone
stringers) Bit stringers w 1.40 SG

1470 1790
Sabunchi Potential HP brine flows.
(Mudstones 13 3/8” 72ppf
SOBM/ WB instability issues
interbeded with thin L80 Hydril 14 ¾” x 17”
1.54 SG 100m inside (hole pack offs, mud
RSS
sand stringers) 521/ 4000psi 1.61 UR/PDC
previous shoe losses,excessive drags in
Bit high angle Wells
Balakhany 2215 3030
WB instability issues. Risk
(V-X Sandstones) 9 5/8” 53.5ppf 12 ¼ x 13 ½ of diff.sticking across Bal
SOBM/ 150m inside
T-95 Vam Top/
1.45 SG N/A
previous shoe RSS UR/PDC VIII/X sands.Potential
Pereriv A 3073 4675 4500psi Bit hydrocarbons influx at
virgin pressure

Fine to B 8 ½” OH for ESS or

Differential
SOBM/ 8 ½” x 9 ¼”
moderate C OHGP Completion 1.38 SG
N/A N/A RSS UR/ PDC Bit
sticking in
sands high angle
D
E 3152 5257 Wellbore
AFE - What Is It?

• AFE - “Approval For Expenditure” or Authorization

for Expenditure
• This is generally a detailed cost estimate which is
submitted for management approval to allocate
money.
• Controlling costs, including estimating future drilling
costs, is a large part of the Drilling Engineers’
responsibility.

78
 Item £ Cost No days Length Total
basis

Rig cost
catering
£40,000
£1,000
day
day
60
60
£2,400,000
£60,000
Rig costs
Modifications £100,000 well £100,000
Conductor £200 foot 250 £50,000
13-3/8" casing £150 foot 2500 £375,000
9-5/8" casing
7" Liner
Conductor accessories
£50
£30
£2,000
foot
foot
well
8500
3500
£425,000
£105,000
£2,000
Drilling Hardware
13-3/8" casing accessories £4,000 well £4,000
9-5/8" casing accessories £4,000 well £4,000
7" Liner accessories
5" tubing
Tubing accessories
£2,000
£50
£2,000
well
foot
well
11500
£2,000
£575,000
£2,000
Tangible Costs
Downhole safety valve £50,000 well £50,000
Completion packers £30,000 well £30,000
Subsea Christmas trees £500,000 well £500,000
Nipples
Control line
£10,000
£5,000
well
well
£10,000
£5,000
Completion Hardware
Completion Crossovers etc £10,000 well £10,000
Mud Chemicals £50 foot 11500 £575,000
Cement and additives £30 foot 11500 £345,000
Electric Logging £30 foot 11500 £345,000
Perforating £100,000 well £100,000
Directional drilling and surveys £5,000 day 40 £200,000
Rock bits
PDC/Diamond bits
Drilling Consumables
£80,000
£200,000
£1,000
well
well
day 40
£80,000
£200,000
£40,000
Intangible Costs
Mud Engineers £800 day 60 £48,000
Casing Crews £2,000 day 20 £40,000
Cementers £800 day 60 £48,000
Mud Loggers £1,000 day 40 £40,000
MWD Engineers
Fishing Services
Liner Hanger engineer
£5,000
£500
£1,000
day
day
day
20
60
5
£100,000
£30,000
£5,000
Variable Costs; people and
Filtration [completion phase]
Miscellaneous Drilling Rentals
Geology office services
£1,000
£2,000
£1,000
day
day
day
20
60
60
£20,000
£120,000
£60,000
consumables…etc.
Onshore office services £5,000 day 60 £300,000
Drilling Supervision £1,000 day 60 £60,000
Wellhead serviceman £1,000 day 12 £12,000
Onshore materials man £300 day 60 £18,000
Cuttings ship to shore £5,000 day 60 £300,000
Packer crew personnel £1,000 day 6 £6,000
Completions Engineer £1,000 day 25 £25,000
Daily Transport Costs £5,000 day 60 £300,000
Standby Boat £3,000 day 60 £180,000
Total AFE Cost £8,306,000
 IMPORTANCE OF BUDGETING

Goal:- deliver the Well to agreed technical

and financial specifications
Thus; must know the TRUE cost of each service
to effectively manage our business
Cost control = managing the well cost
Well Cost = verification of actual cost Vs
estimated cost, based on an agreed scope of
work
 Types of Cost - Fixed

• Costs in an estimate are generally divided into 5 major types.

• FIXED costs do not change with well depth or duration.

• Examples;

 Surveying the rig location

 Mobilizing the rig to the wellsite

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 Types of Cost - Depth Dependent

• DEPTH DEPENDENT costs change with well depth. The

deeper the well, the greater these costs become

• Examples;

 Casing and accessories

 Drill bits

 Drilling fluid

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Types of Cost - Time Dependent

• TIME DEPENDENT costs change

with well duration.
• Examples;
 Drilling rig day rate
 Supply boats and helicopters
 Salaries and consultant fees
 Fuel

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 Cost of Drilling Rigs
Offshore Onshore
Daily Rig Cost
1998 $90,000
1999 $40,000
2006 $95,000 Daily Rig Cost
2018 $65,000 1998 $60,000
(Single year contract) 1999 $30,000
2006 $30,000
2018 $25,000
(Single year contract)
Ultra Deep
Daily Rig Cost
1998 $180,000
1999 $180,000
2006 $200,000
2018 $160,000
(Single year contract)

JMA 84
Types of cost - overheads

– OVERHEAD costs are not incurred at the wellsite.

They may be shared among several operations and a
portion of the cost is allocated to each well. Tend to
be time dependent.
– Examples;
• Office costs including secretaries, stationary etc.
• Logistic bases and supply depots.

85
Types of cost - contingency

CONTINGENCY costs provide for problems.

– The contingency cost = cost of problem x probability
of occurrence.
– Examples;
• Stuck pipe
• Fishing

86
5 Cost Types - Recap

Five different cost types were described;

1. Fixed

2. Depth dependent

3. Time dependent

4. Overhead (or Support)

5. Contingency

87
Risk Management in Drilling

IDENTIFY ASSESS RECORD

risks exposure risk register

REDUCE MANAGE
exposure remaining
risk

88
 Identify Risks
Risk = probability of event leading to injury, loss of assets or
environmental damage
 Well Design (inputs not accurate, loads not accounted for)
 Drilling Programme (problems; stuck pipe, losses)
 Environmental (weather, infrastructure)
 Simultaneous Operations (impact of one operation on another)
 Equipment failure (loss of time, control)

 Historical analysis (what happened previously)

 Uncertainty (e.g. geological)
 Management (move the goalposts! Drill a bit deeper…)
89
Assess Exposure (each risk)

IMPACT

 HIGH impact = Multiple Fatalities or Cost > $10M

 MEDIUM HIGH impact = Fatality, Permanent Disability or
Cost $1m - $10m
 MEDIUM impact = Lost Time, Temporary Disability or
Cost $100K - $1M
 LOW impact = No Lost Time, First Aid case, cost <
$100K
Risk has two elements, the probability of the risk
occurring and the impact if it does occur.
 Assess Exposure

PROBABILITY
How likely is the event to occur?
 High = very likely, often
 Medium = possible, sometimes
 Low = very unlikely, hardly ever

Use historical data, expert opinion, guesswork

91
 Exposure Matrix
This is used to identify which risks need to have resources spent to
reduce them further. Anything high or very high needs particular
attention to reduce probability and impact.

Combine Impact and Probability

to get Exposure
 Very High

 High

 Medium

 Low

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 Risk Register
For all risks remaining that are not eliminated completely, an entry should be made
in the risk register. This documents each risk and makes available to all concerned
all information on the risk.

1. Hazard description
2. Hazard effect
3. Exposure (impact, probability)
4. Assumptions
5. When is the hazard possible
6. Prevention
7. Recognition
8. Mitigation/Cure
9. Risk owner
10. Action plan (when/where/who)
11. Date of next review 93
 Reduce Risk to ALARP

ALARP = As Low As Reasonably Practicable

Reduce the Probability of Occurrence;

 Identify and address the Root Causes

Reduce the level of Impact;

 If the event does occur, what could be done to reduce the

cost or likely injury to personnel?

94
 Manage Remaining Risks

 Define the risk register review interval (at least at start of each operational
phase).

 Review action plans for “active” risks.

 Check assumptions are still valid.

 Ensure all actions are captured in Design or Operational procedures.

 Identify new risks which have occurred.

 Close all non-active risks.

 Keep risk register up to date.

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 Other Risk Management Tools

Wellsite Management
 STOP system  HAZID
 Job Safety Analysis  HAZOP
 Permit to Work  Management policies
 Pre-job Safety Meeting  Safety Case
 Weekly Safety Meeting  Safety Alerts
 Standard procedures,  Training
manuals
 MSDS (material safety data
 Alert system for identified sheet)
hazards
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Loss Prevention Measures

 Competency assurance of personnel (training, mentoring,

testing etc)
 System of documentation and approval of decisions and
calculations
 Use of policies, procedures, manuals
 Peer review of designs and programmes
 Effective team working and communication
 Proper change procedures in place
 Use of contractors with QA (quality assurance) systems
 Bridging of safety systems
97
Main Hazards in Drilling Operations

1. Slips, trips and falls.

2. Trapping body parts between moving objects or in
power tools.
3. Lifting equipment failure – loads dropped.
4. Exposure to high noise levels.
5. Exposure to chemicals.
6. Failure of equipment containing high pressure.
Note: all these hazards can be prevented
98
Thank You