December 2018

Drilling advances

Sleepless in the Gulf
Jim Redden / Contributing Editor

With up to 30% of the deepwater Gulf of Mexico considered a high-pressure, high-temperature (HPHT) environment, the protracted lead times for developing and certifying drilling technologies for service in elevated temperatures and 20,000-psi pressures can leave operators reaching for Melatonin.

“It’s the number-one thing that keeps me up at night,” says Eric Sirgo, general manager of deepwater projects for Chevron Gulf of Mexico operations. “You know what the journey has been like in the (development of) 15K BOPs.”

“I actually have a lot of comfort around the facility aspects, such as the subsea components and trees. I’m not as worried about that as I am about the drilling components. We have a lot of focus on that topic right now,” he said in an Oct. 31 keynote address to the World Oil HPHT Drilling, Completions and Production Conference in Houston.

Indeed, a slew of new design standards enables subsea trees to be HPHT-serviceable without a wholesale makeover, said Parth Patjhak, OneSubsea senior engineer for subsea trees, during a subsequent panel discussion on creating a safe operational environment for HPHT Gulf wells. “We can apply these standards to existing trees for HPHT standardization,” he said.

Sirgo’s presentation came the morning after U.S. Secretary of the Interior Ryan Zinke held a series of meetings in New Orleans with federal regulators and operators in the deepwater and shallow-water Gulf of Mexico. In the face of disproportionate resources being diverted to the Permian basin and other short-cycle theaters, the competiveness of the Gulf reportedly topped the agenda. Chevron, alone, is investing more than $4 billion/year in the Permian, Sirgo said.

“I think the regulator and the secretary are watching the (Gulf) basin quite closely. They know the Permian is attracting huge amounts of capital. They want the Gulf to be more competitive, so I think they have to look at the royalty structure and the partnering structure. They have to look at a number of things. They’ve actually taken some nice steps on the shelf to try and preserve those investments and resources,” Sirgo said, referring to the lowering of federal royalty rates from 18.75% to 12.5% during July 2017, for waters shallower than 657 ft.”We also have to understand the journey the regulator has been on over the past decade. We can’t ask them to merely try something; we have to do it right and that takes time,” he said. “In working on the HPHT qualification process, we’re going to go slow to go fast.”

Staying relevant. Deepwater players are mainly in agreement that the U.S. Bureau of Safety and Environmental Enforcement (BSEE) gave the Gulf a leg up by relaxing what had been considered over-arching well control regulations. While not specifically addressing the rule changes, Sirgo said, “Chevron is pretty content where we’ve gotten to, but we have to be careful that we don’t stray too far and make our basin non-competitive, and we can easily do that with some of these regs.”

“It absolutely has to be safe, but we have to be careful with things that we’ve already proven are safe, so we don’t grind them into the ground to make them 50 times safer,” he said. “But, this is an interesting time and space for the regulator, as well.”

Panelist Roy Bleiberg, V.P. of engineering for the American Bureau of Shipping (ABS), agreed that safety is “the common denominator” between all offshore participants, but said regulatory uncertainty puts original equipment manufacturers (OEM) at a decided disadvantage. “The technology, itself, is often not under any uncertainty, but the regulatory regime is. What is new is how you go about complying,” he said.

The standardization dilemma. Meanwhile, the majors have long promoted standardization of equipment and processes as a key step toward putting deep water on a competitive plane, and Sirgo agrees that the industry needs a supply chain that can deliver “a product that is sort of a one-size-fits-all.” However, as one audience member pointed out, the “big box service companies” are eager to take on the massive revenue-generating projects, leaving smaller companies to fill in the technology gaps, at higher risks and less returns.

Sirgo said operators are willing to help find solutions for those gaps, once the missing “interconnected pieces and parts” are brought to the floor. “At the end of the day, everyone is trying to make money, both the suppliers and the producers. So, we have to figure out the intersection between standardization and making money and moving technology forward.”

Standardization, however, must extend beyond the equipment to the end-user, said panel moderator Andrew Dingee, founder and president of ADEnterprise, described as a safety management consulting and leadership firm. “The guys who manufacture HPHT equipment need to consider the guy who’ll be using it,” said the former military and commercial pilot, and noted aviation safety expert.

From both safety and performance perspectives, closed-loop managed pressure drilling (MPD) is one rapidly evolving technology that could become a standard for deepwater drilling, said panelist Robert Ziegler, global deepwater advisor for Weatherford International. “I would say that within the next 10 years, three-quarters of all deepwater rigs will be incorporating MPD, similar to what we’ve seen in the onshore market.”

The reason, he said, can be attributed to a glaring drilling fissure, particularly when constructing HPHT wells. “We have become very, very good at destroying rock, and there are no major breakthroughs to be expected there. But, we need to improve our ability to drill wells without kicks and without losses.” wo-box_blue.gif

About the Authors
Jim Redden
Contributing Editor
Jim Redden is a Houston-based consultant and a journalism graduate of Marshall University, has more than 40 years of experience as a writer, editor and corporate communicator, primarily on the upstream oil and gas industry.
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