The Drilling Champion of Shale Gas
Improving operational consistency key to reducing costs
At the recent Global Shale Gas Forum in Berlin, Germany, Dr. Gerhard Thonhauser, Managing Director at TDE Thonhauser Data Engineering GmbH Set, said he wanted to translate what shale gas drillers were currently doing in Europe into the “industrialization” of drilling, explaining that consistent drilling operations led to lower costs.
“There are about 98 rigs in Europe, including those not adequate for this type of work to do shale gas, but let’s assume we want to produce 10,000 wells,” said Thonhauser, who is also the Chair of Drilling & Completion Engineering of the Department of Mineral Resources & Petroleum Engineering at Montanuniversität Leoben in Austria.
He spoke of the different scale of activity in Europe and pointed out the lack of skilled labor to get the job done.
“Even eight hundred wells is a massive endeavor, but in North America it’s nothing,” Thonhauser said. “You’re going to have to man these rigs. You don’t find these people on the street these days. To run a rig, you need 50 people. So for 100 rigs, you need 5,000 professionals or so.”
“The challenges in Europe are clearly the cost,” he explained. “If we can get an average cost from the ‘mom and pop’ wells and combine it with the complex drilling environment in Europe, we can come up with some numbers.”
He proposed the drilling of 10,000 wells in Europe, each of which would be have 10 fracks. “You’re going to need a lot of infrastructure,” said Thonhauser. “How much diesel does a rig need per day – maybe 10-15 cubic meters today, so that’s a lot of fuel.”
“We’re going to need water to do all these frac jobs, and the water will have to be re-filtered and re-used.”
“Can you drill more cheaply?” he asked. “Why do we always get more expensive? The wells are getting much more expensive. Is there a drive to get cheaper? Is the motivation there? I see that cost is really driving us to go to the edge.”
Thonhauser explained that a method exists which has been used to measure total well duration, defining productive time/non productive time for hydrocarbon drilling operations.
“They identified lost or down time. Do you know what the percentage was? 20% - and it has been at this level for the last 20 years. There is also ‘hidden lost time’, which can total another 20%.”
Through evaluation of key performance indicators (KPIs), Thonhauser said it was possible to find and eliminate down time to make drilling operations 40% cheaper.
“Some companies have done this very well,” he commented. “If you wanted to harvest that, it gets very interesting when you talk about 10,000 wells. It’s a lot of money if you can whittle the down time down to 10%.”
He said there was much hidden potential in operational factors, and provided an offshore rig as an example.
“How do you set the target and how do you stay on target?” queried Thonhauser. “It’s a big surprise that we don’t know where we stand.”
He provided a “Formula One” example. “If a driver wins the Grand Prix, but next time he loses, why? Only if you go into detail will you find out what your crews are doing, etc.”
The devil is in the details for optimizing shale gas drilling ops as well, according to Thonhauser.
“Using manual drilling morning reports with the activity breakdown for drilling performance analysis leads to the following drawbacks: analysis based on subjective human observations, a coarse level of detail, so it needs a well defined operations classification system.”
Thonhauser showed a recommend workflow for a drilling rig; the potential problem in application, he said, was data quality.
“When you start automating this, when you have detailed data – whether it’s water consumption - things you can convert to hard data – you can start comparing data,” he explained.
One example he provided was slip-to-slip connection pipe assembly for drilling rigs and the time it takes. “How long does it take to put them together, pull them apart?”
Forty-five hours of drilling time, he said, could be translated to US$ 2 million dollars, so savings in assembly time were a must.
“So you end up with some kind of rig ranking, and if you have 100 rigs you don’t want some that take three times as long to do the same work.”
Thonhauser added, “Drilling operators do not like to be measured like that, because it becomes transparent what they do.”
Some companies, he said, had turned to incentive type schemes to get a “buy-in” from drillers.
He said it was necessary to plot that performance. “As soon as you know where you stand you can improve operational consistency narrowing the distribution by more consistent operations around the best practice.”
Thonhauser said it was then a question of who took the risk, adding, “If the operation takes 60 instead of 50 operational days, you pay that.”
“I have people telling me ‘drilling is an art, not a science’. There is a manufacturing element of what we do and rig automation is going in that direction,” he said.
Thonhauser showed “operations fingerprinting” and what happens when drillers save five minutes on 3,000 wells.
“These types of observations in such an environment trigger technology,” he said.
He also spoke of the importance of standardizing equipment. “If 100 rigs are exactly the same, there’s one storage facility for the same parts - but every rig that is built today is in correspondence with the specs that exist today. So there’s a lot of potential in this, an opportunity to build this up, with new rigs, I would build a dedicated fleet at an extremely low cost,” said Thonhauser.
“An important step would be to know what others are doing,” he continued. Even in the inner drilling community, if one asks how good a rig is in Australia, people don’t know. It’s never been looked into.”
“Even if we go slow on this, we’re going to end up with a fleet of that size. The business is not going to develop without going full speed with all the energy that you have,” he told delegates at the Global Shale Gas Forum.