2013 OTC Spotlight on New Technology Awards

The Offshore Technology Conference has announced the 15 winning technologies that will receive the 2013 Spotlight on New Technology Awards recognizing innovative technologies significantly impacting offshore exploration and production.

Winning technologies are selected based on five criteria:

• New: The technology must be less than two years old.

• Innovative: The technology must be original, groundbreaking and capable of revolutionizing the offshore E&P industry.

• Proven: The technology must be proven, either through full-scale application or successful prototype testing.

• Broad interest: The technology must have broad interest and appeal for the industry.

• Significant impact: The technology must provide significant benefits beyond existing technologies.

ABB’s Onboard DC-Grid is an innovative marine technology that uses direct currents to transport energy to different consumers onboard the vessel. It enables variable speed operation of generator sets, significantly reduced fuel oil consumption, improved emissions reduction, reduced maintenance and new operational modes with a more responsive vessel system.

Baker Hughes’ FASTrak logging-while-drilling (LWD) fluid analysis sampling and testing service provides knowledge of reservoir fluid properties that enhances critical decision-making about the reservoir. FASTrak addresses the growing need to acquire fluid samples in LWD environments, such as horizontal or extended-reach wells, resulting in significant time and cost savings.

DOW NEPTUNE Advanced Subsea Flow Assurance Insulation System, developed by Bayou Wasco Insulation, Dow Oil & Gas, PIH and Trelleborg Offshore, is a simple, robust, end-to-end flow assurance solution offering enhanced performance safety with its two-layer application. It protects equipment, line pipe and field joints across a wide application and in-service temperature range, which runs from-40°C to 160°C, or -40°F to 320°F, withstanding hydrostatic compression greater than 400 bar.

FMC Technologies and Sulzer Pumps have developed a high-speed, helico-axial multiphase subsea boosting system optimized for subsea applications. This system combines field-proven pump hydraulics from Sulzer Pumps with FMC Technologies’ permanent magnet technology from Direct Drive Systems for less maintenance with greater speed, efficiency and power.

GE Oil & Gas has developed the next-generation technology for shearing and sealing wellbore tubulars. The patent-pending Blind Shear Ram is designed for use with GE’s ram blowout preventers in offshore drilling. It provides an industry-first capability to shear some 6 5/8-in. drill pipe tool joints while achieving a wellbore seal holding up to 15,000-psi pressure differential.

GE Oil & Gas’ RamTel Plus provides operators with a direct method of determining ram position. The ROV Display allows the ROV to read stack sensor data, including wellbore temperature and ram position subsea indicators.

FMC Technologies’ Condition and Performance Monitoring (CPM) is a surveillance system that enables proactive maintenance of subsea production and processing systems associated with a 24/7 collaborative expert environment for diagnosis and problem solving. CPM combines continuous monitoring of sensors and subsea instrumentation with a historic database to identify fault condition and deviations from normal operating conditions.

Reelwell’s RDM-Riserless system enables drilling in 9,843 ft (3,000 meters) water depths from third-generation drilling units due to the reduced weight related to omitting the riser. This is possible because the cuttings are transported to surface inside the dual drill string, i.e., the dual drill string acts as the riser.

Wärtsilä has developed a system to turn VOCs or associated gases that were previously considered as waste into a source of energy. The Wärtsilä GasReformer enables self-sustaining power generation for the offshore operation. It provides cost savings and environmental sustainability.

SBM Offshore’s Drilling Riser Trip Saver is a rail-mounted transport system that relocates a suspended drilling riser with a drilling riser tensioner system and surface blowout preventer in place. The apparatus and method for drilling multiple subsea wells consecutively saves time and cost and reduces risk by avoiding removal of the suspended drilling riser from the well bay.

Bredero Shaw’s Mobile Robotic Cutback System is an innovative end machining technology for insulated pipe. It replaces manual processes that form the cutback, including wire brushing, grinding and scraping. The technology is safer, quieter, requires less labor and produces consistent high-quality cutback profiles while generating recyclable waste.

WeST Drilling Products’ Continuous Motion Rig (CMR) is a fully robotized rig and offers continuous drilling operations. CMR reduces overall drilling time by up to 50% and facilitates managed pressure drilling. CMR substantially reduces downhole problems associated with differential sticking and pressure fluctuations and eliminates personnel safety risk.

Statoil’s remote-controlled hot tap operation consists of a robot welding a T-piece on to the pipe while gas is flowing through it. Afterwards, a remote-controlled drilling machine will drill holes in the producing pipeline, with no effect on pressure and production.

Superior Energy Services’ Complete Automated Technology Systems (CATS) is an onshore and offshore completion services rig that uses remote-operated or pre-programmed robotics to control various completion components, including a snubbing unit, BOP/well control stack, pumps, circulation tanks, top drive, closing systems and pipe handling systems as part of one unit.

Welltec’s Well Cutter enables efficient drill pipe and casing recovery without explosives. No shavings are generated, a smooth surface re­mains after the cut and e-line conveyance ensures accurate depth control. Click here to read about the Well Cutter from the Sept/Oct 2012 DC.

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ASTM subcommittee to develop hydraulic fracturing standards

By Katie Mazerov, contributing editor

ASTM International has formed a subcommittee to develop standards for hydraulic fracturing. Subcommittee D18.26, which held its first meeting in January, includes 230 volunteer members from operating companies, service companies, geotechnical and geo-environmental firms and regulators, said Robert Morgan, director of technical committee operations for ASTM. Member companies include BP, Chevron, Chesapeake Energy, Schlumberger and Halliburton.

The committee has identified several areas of focus:

• Site investigation;

• Site construction;

• Permitting;

• Drilling;

• Fracturing and stimulation;

• Drilling fluid characteristics;

• Waste management of completion fluid;

• Site monitoring and well abandonment; and

• Cementing and grouting.

The standards are strictly voluntary. Once they are developed, they will be ASTM standards that can be used in the marketplace and potentially cited in federal regulations, which currently reference some 2,500 standards.

“One of the reasons ASTM has been so successful is that it gets industry involved in the process and brings the regulatory community to the table to develop standards everyone can live with,” Mr Morgan said. “The process allows industry to be proactive rather than have a governmental entity determine what the standards should be. ASTM is an open and transparent organization, and anyone who has an interest in the process can get involved.”

The subcommittee, formed after an exploratory task force reached out to industry stakeholders, also works closely with related organizations to avoid duplicative efforts. One of the first endeavors of the task force was to review existing API documents related to hydraulic fracturing. “If another organization is meeting a marketplace need, ASTM typically does not get involved,” Mr Morgan noted. “We looked for voids in the API documents where ASTM standards could supplement the work that has already been done.

“Another objective in this effort is that ASTM does not want it to come across as an environmental watchdog activity but rather as a way to make the practice of hydraulic fracturing safe and efficient,” he continued. For example, one issue discussed at the initial meeting was proppant shape, which can make a significant difference in keeping fractures open for better flow of hydrocarbons.

The standards development process could potentially take more than a year, depending on the complexity of the topics being addressed. “The process depends on the urgency of the needs the members have identified,” Mr Morgan said. “The ASTM process has a proven history, and one of the reasons it has lasted so long is because of the professionals involved. This is a level playing field where everyone has an equal say.”

For more information on how to get involved in Subcommittee D18.26, please visit www.astm.org/COMMIT/D1826.htm.

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Craighead: E&P in ultra-deepwater is like ‘going to mars’

By Joanne Liou, associate editor

Martin Craighead, president and CEO, Baker Hughes

In the not so distant past, with deepwater exploration still in its infancy, the fear of shrinking oil and gas supplies frequently ran high. Today, however, industry has embraced the challenges of deepwater and continues to push beyond to ultra-deepwater. “We live in a world where we now see a future field with energy prosperity,” Baker Hughes president and CEO Martin Craighead stated at the International Petroleum Technology Conference in Beijing in late March. “There are two primary drivers of this new prosperity: unconventionals and deepwater.”

Addressing the latter, Mr Craighead focused on ultra-deepwater, likening E&P in that frontier segment to reaching the moon. “Today, our customers are asking us to help them solve problems of the ultra-deep frontier, which is so much more challenging and exciting. It’s like going to Mars.”

Baker Hughes is working with 10 customers who collectively intend to drill approximately 300 deepwater wells over the next decade in the GOM, representing about $30 billion initially to extract resources from the Lower Tertiary, Mr Craighead explained. Technology breakthroughs associated with completions and sustained production from frontier targets, such as the Lower Tertiary and Jurassic formations, will be key to industry’s success. “Engineering excellence and innovation and outmost reliability here, I believe, will be potentially rewarded far greater than anywhere our industry has ever worked before.” According to a Baker Hughes customer, a 1% improvement in recovery on some projects can translate into an additional $3.2 billion, Mr Craighead stated.

With approximately 45 active rigs, 11 of which entered the region over the past year, the GOM remains the fastest-growing deepwater market in the world, he said. “An additional three or four will be commissioned this year, and moving from traditional deepwater to the ultra-deep frontier holds both great challenges, as well as great potential prosperity, if those challenges can be met.”

The formations are consolidated, and with reservoir pressures exceeding 30,000 psi and temperatures ranging from 350°F to 400°F, large stimulation treatments will be required to establish reservoir productivity. “In fact, stimulations in the Lower Tertiary projects must be carried out across multiple zones; some particular cases covering as much as 3,000 ft of vertical reservoir,” Mr Craighead said. “In addition, each zone will require up to half a million pounds of proppants.”

Further, the wells face a high risk of unwanted solids, which can damage completion systems, compromising its reliability. “Every component in these systems must be designed to a whole new level of reliability,” Mr Craighead said. Operators are requiring fully redundant subsea and well boosting systems, for example, with a life expectancy in excess of 10 years, he added.

Electrical submersible pumps (ESPs) have been operating reliably in deepwater environments for years, but the next frontier will require these ESPs to run in HPHT conditions and sit idle for as long as five years before activation. “Once it’s turned on, it better work and work for a long time,” Mr Craighead said.

The ESP system must be fully compatible with the well completion hardware, which will have its own set of complexities in the ultra-deepwater environment. “The laws of physics are forcing us to re-engineer highly complex systems that have typically been designed for the dry environment. Each component of these innovative intelligent production systems must be waterproof like never before and designed to withstand the pressures that come with 10,000 ft of water.”

Well depths and operating conditions will also challenge fiber-optic technology. To connect upper and lower completions and provide continuous automation downhole, two fiber-optic streams must precisely align – each thinner than a strand of hair – and maintain the photon productivity over the entire length of the wellbore, Mr Craighead explained. “The price at stake in this new frontier, nevertheless, is enormous.”

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Ship shape

Jurong Shipyard, a subsidiary of Sembcorp Marine, has orders for nine jackups and four semisubmersibles at its yard in Singapore. Sembcorp is also building a new yard, Estaleiro Jurong Aracruz in Brazil, that’s scheduled for completion by the end of 2014. Contracts already include seven drillships for Sete BrasilBy Katie Mazerov, contributing edito,

Ultra-deepwater drives thriving activity, higher-capacity rig designs at established shipyards as Brazil makes a splash

By Katie Mazerov, contributing editor

The world’s offshore rig fleet is getting a makeover. The recovering global economy, healthy commodity prices, a burgeoning ultra-deepwater market and plans to venture into more harsh-environment fields have converged in a perfect storm of newbuild activity at the world’s major shipbuilding yards. Add to the equation an aging jackup fleet and a push by operators for rigs with state-of-the-art technologies and increasing automation, builders are touting a bullish outlook reminiscent of the boom years of 2004 to 2005, when the newbuild trend began, only to be interrupted by the global recession.

Post-recession, the newbuild story has again picked up with strong demand for high-specification jackups, semisubmersibles for harsh-environment drilling and drillships that can accommodate heavier subsea equipment for high-pressure, ultra-deepwater reservoirs in the Golden Triangle – Gulf of Mexico (GOM), West Africa and Brazil.

Above and below: The OSX Açu Shipbuilding Unit in São João de Barra, in the northern sector of Rio de Janeiro, is scheduled to begin operationAs this year. The company believes it will be the largest shipyard in the Americas. It will cover 3.2 million sq meters and have a 2,400-meter waterfront, expandable to 3,525 meters. Hyundai Heavy Industries has a 10% stake in the project.

“A trend that is quite clear on the rigs being designed for high-pressure, ultra-deepwater drilling is the increase in derrick ratings, with both the drawworks and the derricks getting bigger and heavier,” said Karsten B. Meling, sales director for National Oilwell Varco (NOV). “Derrick ratings have gone from 1,000 tons to 1,250 tons of maximum lifting capacity, but on the new drillships being ordered, we’re seeing dual derricks, with each drill center having a rating of 1,400 tons that can lift 1,250 tons in the elevator that hangs below the top drive, and both centers with active heave compensated drawworks.”

At the center of this evolution is anticipation of the 20,000-psi blowout preventer (BOP), which in turn is impacting the weight of all related systems and equipment. “Today’s vessels have BOPs rated for 15,000 psi, and the systems related to that rating have a certain weight,” Mr Meling said. “Four years from now, BOPs will be rated for 20,000 psi. They will be three to four meters taller and weigh between 150 and 200 metric tons, more than the current 15,000-psi stacks, resulting in the need for increased capacity of the BOP-handling equipment, riser and derrick.”

These changing needs are resulting in increased levels in specific designs from both the shipyards and firms such as Moss Maritime and Friede & Goldman (F&G), following a period where standardization of many features played a key role in delivering on-time and on-budget jackups and drillships from some shipyards, said NOV’s David Reid, chief of sales and senior vice president for global accounts. “That previous trend meant investment companies were able to fund growth cycles, allowing them to take risks to invest on speculation in jackups that were attractive to drilling contractors,” he said. “Standards have not been as prevalent in semisubmersibles unless they are led by a specific driller who repeats a unique design.”

Beyond rig design trends, another change is on the horizon. Brazil is revitalizing its shipbuilding industry in a big way, with 11 shipyards currently under construction in attempt to meet the production needs of what is poised to become the world’s largest offshore market. Brazil’s move deeper into the rig-building industry is in line with the government’s desire to bring work into the country, said Mr Reid, who also serves as IADC’s division VP of drilling and well services. He notes that many of the Brazilian shipyard ventures have formed partnerships with the more prolific rig-building companies.

OSX, a subsidiary of Brazilian conglomerate EBX Group, has formed an exclusive partnership with Korean shipyard Hyundai Heavy Industries (HHI), which has a 10% stake in developing the massive OSX Açu Shipbuilding Unit in São João de Barra, in the northern sector of the state of Rio de Janeiro. OSX operates in the naval and offshore segments and provides integrated solutions for the oil and gas E&P sector.

“Hyundai, a global leader in naval construction, is providing OSX with state-of-the-art technology and know-how, bringing the latest-generation Asian technology to Brazil,” said Carlos Bellot, CEO of OSX. The São João de Barra facility, which is scheduled to begin operations in the first half this year, will be the largest shipyard in the Americas, with 3.2 million sq meters. It will have a steel-processing capacity of 180,000 tons/year, expandable to 400,000 per year, and the capacity to integrate up to 11 floating production storage and offloading (FPSO) units and eight wellhead platforms simultaneously, with a 2,400-meter waterfront, expandable to 3,525 meters.

Although OSX is not currently building any drilling rigs, the company’s portfolio encompasses FPSOs, fixed platforms, special vessels and oil tankers for Petrobras and OGX, as well as service companies like Malaysia-based SapuraCrest and Kingfish do Brasil, according to Mr Bellot. Of the 23 orders, 18 vessels are scheduled to be built and/or integrated at the OSX shipyard.

For the near term, however, HHI has scaled back its outlook for demand in Brazil. “The Brazilian market is developing differently than what we had expected,” said Kang Young-Seog, senior vice president for HHI’s Ship Sales Department. “Petrobras announced recently that it will be concentrating more on existing field production capacity rather than exploring the pre-salt areas, as they had planned earlier. Therefore, we don’t expect high demand from the Brazilian market, at least for awhile, unless Petrobras changes its strategy.”

Due to the large number of rigs currently under construction around the world, with many still seeking contracts, Mr Kang also anticipates contractors taking a “wait-and-see” position for the time being. “I understand that 47 out of 75 drillships under construction globally have secured contracts, meaning 40% remain unchartered,” he noted. “Therefore, our outlook on demand depends on how early and the terms drillers can secure charter contracts for newbuilds deliverable in the year to come. Longer term, however, I think the deepwater newbuild market will be bright due to continuing high oil prices, providing incentives for operators to invest in deepwater exploration.”

Hyundai Heavy Industries’ (HHI) Offshore Yard is located next to its main shipbuilding yard in Ulsan. HHI is focusing on building new commercial vessels and offshore-related vessels such as drillships, semisubmersibles and FPSOs.

HHI currently has 13 drillships under construction for Diamond Offshore Drilling, Rowan Companies, Noble Drilling and Fred Olsen Energy, along with  two semis for Fred Olsen and Seadrill.

“Drillers are seeking drillships that can drill deeper than 10,000 ft and accommodate heavier subsea equipment, such as 20,000-psi blowout preventers,” Mr Kang said. “They also prefer purpose-built and operation-friendly designs, like the HHI-Gusto P10000 we are building, that reduce downtime.” The rig is capable of operating in water depths up to 12,000 ft and features two complete ram BOP systems. It is equipped

No. 1 Drydock is one of 10 drydocks at the HHI shipbuilding yard in Ulsan, South Korea. The dock is 2,200 ft (672 meters) long, 302 ft (92 meters) wide and 44 ft (13.4 meters) deep. HHI has 13 drillships and two semisubmersibles under construction.

with a 165-ton, heave-compensated crane to enable deployment of subsea production equipment. HHI also has developed a wider beam design, the HD 12000, which features an eco-friendly, high-capacity new hull form for deeper waters and

heavier subsea equipment.

“When it comes to semis, it is obvious that drillers prefer robust rigs, suitable for operating in harsh environments like the North Sea, Australia and Canada,” Mr Kang continued. “With this market trend in mind, we took a semi design, the CS60, from Moss Maritime, to build two semis, one at our Gunsan Shipyard, the other at Hyundai Samho Heavy Industries, our sister

company in Samho-eup,” an administrative division in southwestern Korea.

HHI, which has 10% ownership in the OSX Açu Shipbuilding Unit in Brazil, sees increasing demand for drillships that can drill deeper than 10,000 ft (3,048 meters) and accommodate heavier subsea equipment.

HHI’s customers typically have their own technical requirements and operational philosophy, customizing their newbuilds with features to give them competitive and operational advantages, he added. “Once they standardize their own fleets, they are not inclined to take other rig designs for the purpose of avoiding any inconvenience in the rig operation and maintaining commercial advantage,” Mr Kang said. The company is seeing a heightened focus on safety, with drilling contractors asking for such features as upgraded and/or spare BOPs for well control systems on newbuilds and even existing fleets.

Jurong Shipyard, a subsidiary of Sembcorp Marine, ventured into rig building in 2003 and has since delivered a series of semisubmersibles, including 12 units of the F&G ExD design, two units of the Bingo 9000 design, and two units of the Moss Maritime CS50 MKII harsh-

environment design. It has also completed several jackups, including four units of the Pacific Class 375 design and a Gusto MSC CJ70 harsh-environment unit.

Current orders include nine jackups, comprising six F&G JU3000N units, two F&G JU2000E units and a Gusto MSC CJ70 harsh-environment unit, and four semisubmersible rig projects. In

addition, more than $6.3 billion in contracts has been secured for the Brazilian market by Sembcorp Marine’s new yard, Estaleiro Jurong Aracruz, currently under construction by Jurong Shipyard in Espirito Santo and scheduled for completion by the end of 2014. Its contracts include seven drillships worth $5.3 billion for Sete Brasil to be chartered to Petrobras, as well as module construction and integration for two FPSOs for the Petrobras-led consortium Tupi BV.

“The construction of Estaleiro Jurong Aracruz will substantially strengthen our capabilities in meeting the needs of Brazil’s offshore sector in developing the giant pre-salt oil and gas reservoirs,” William Gu, general manager for Jurong Shipyard’s offshore division, said. “We have two decades of experience servicing Brazil’s oil and gas industry, and the new yard will further reinforce our position as a leading player and key partner for the country’s E&P sector. There is a huge demand for platforms in the region, and we are extremely pleased to be part of this significant growing industry.”

Maintaining market position

Above: Rig building accounts for 50% of revenues for Singapore-based Jurong Shipyard. Its parent company, Sembcorp Marine, is building the Estaleiro Jurong Aracruz yard in Brazil. Below: DSME currently has 15 deepwater units under construction, including five semisubmersibles and 10 drillships, at its shipyard in South Korea. The company has seen an uptick in demand over the past year, both in actual newbuild activity and in inquiries for new rigs.

Sembcorp Marine also is building a new 206-hectare (0.8 sq miles) shipyard in Singapore’s new port development, Tuas View Extension. First-phase construction, which spans 73.3 hectares (.28 sq miles), is under way and scheduled to begin operations in the second half of this year. The yard will more than double the group’s current ship repair, conversion and offshore capacity of 1.9 million deadweight tons, and will provide faster turnaround time, increased productivity, improved logistics, efficient workflow and introduction of new automation.

Mr Gu sees the current market turnaround as a trend going forward due to strong fundamentals in the offshore arena. Demand in all sectors is up, and he sees a shift among major drilling contractors to order more rigs on speculation, rather than wait for a contract. “The push is coming from the major operators who want rigs that are less than five years old,” he said. “Contractors want to maintain their market positions by replacing aging fleets with higher-capacity assets that can accommodate features such as high-pressure BOPs.” This is in contrast to the years preceding the recession, when the spec rig market was driven by investors, he noted.

He also sees a remaining niche for lower-specification models even as high-spec rigs gaining popularity among operators. “We have a broad mix of customers, with some wanting more automated features and others not. It depends on where they are drilling,” Mr Gu said. “More automation means the crews need to be well-trained, and that can mean higher operating costs.”

Jurong Shipyard anticipates a continued uptick in rig building in the next 12 to 18 months, he indicated; good news since rig building accounts for more than 50% of the shipyard’s revenues.

The jackup market is especially strong in Asia Pacific, Mexico, India, Southeast Asia and the Middle East. Jurong Shipyard is also seeing more demand for heavy-duty, harsh-weather rigs, Mr Gu said, noting that some Arctic exploration will commence this summer.

The shipyard is building a second Gusto MSC CJ70 harsh-environment jackup for Seadrill, with delivery set for Q4 this year, and a harsh-environment Moss Maritime CS60 ultra-deepwater semisubmersible for North Atlantic Drilling, with delivery scheduled for Q1 2015. The semi, being designed for year-round drilling, will have a water depth rating of 10,000 ft, a maximum drilling depth of 40,000 ft and the ability to operate in -25°F and strong winds. Other projects include an intervention semi for Helix in the GOM and two accommodation semis for Prosafe, for North Sea harsh-environment conditions.

Jurong Shipyard also has a robust upgrade and conversion business, currently upgrading one semisubmersible for Diamond Offshore Drilling and converting two FPSOs. “Some choose to convert and upgrade as the turnaround is relatively faster compared to newbuilding. To them, time is money,” Mr Gu said, adding that Jurong Shipyard is the only yard in the world constructing newbuilds and carrying out rig conversions at the same location.

Deepwater investment

DSME, whose shipyard is located on the southeastern tip of the Korean Peninsula, is anticipating a return to the jackup market after receiving inquiries for high-end, heavy-duty jackups for harsh-environment drilling.

Daewoo Shipbuilding & Marine Engineering Co (DSME) has seen an uptick in demand over the past year, both in actual newbuild activity and in inquiries, for deepwater and ultra-deepwater rigs, said Justin Y.S. Joe, general manager and head of offshore marketing, drilling. “Many drilling contractors want to retire their older, inefficient semi and jackup fleets, and we believe they will be investing more capital in deepwater drilling units,” he said. “This is especially true for the large and mid-size drilling contractors, but the smaller companies will need to replace their older units, as well.”

DSME currently has 15 deepwater units under construction, including five semisubmersibles and 10 drillships. Mr Joe attributes the increasing demand to indicators that suggest prices will remain strong, a result of industry’s focus on deepwater drilling.

“We’ve seen newbuild orders and inquiries continue to increase, especially in the fourth quarter of 2012 and the first quarter of this year,” he said. “Newbuild orders aren’t at the levels of 2011 but definitely are coming in at a higher pace than in 2009 and 2010, when the industry experienced the downturn due to the recession and subsequent fall in oil prices.” In 2011, DSME saw a 10-fold increase over 2010 in the number of inquires from potential clients, then an additional 30% increase in inquiries in 2012.

“We think the number of orders this year will be similar to where they were in 2012, mostly from existing clients but also from new customers ordering rigs on speculation and new players who want to be part of the ultra-deepwater market,” Mr Joe continued. “Our analysis shows that many of these units won’t be drilling in ultra-deepwater reservoirs yet, but companies want to be ready for that market when it starts to take off.”

Taking a long-term view, customers are requesting rigs to accommodate dual derricks, dual BOPs and 20,000-psi BOPs. “In 2004 and 2005,

With 36 jackups and six semisubmersibles under construction at its yard in Singapore, Keppel Offshore & Marine is anticipating strong demand for newbuilds driven by sustained high oil prices, new exploration and a shortage of high-spec rigs.

when the newbuild boom started, rigs featured primarily single-derrick designs, but dual-drilling packages are now the trend,” he noted. “Operators may not require the dual BOP packages and 20,000 psi now, but they want to have that capability in the future.” Of the rigs under construction at DSME, half will be delivered in 2014 and half in 2015. Most of the drillships targeted for 2014 delivery will be contracted this year, he said.

Mr Joe also sees an emerging market for harsh-environment mid-water semisubmersibles. “Normally, harsh environments require semis, not drillships,” he said. “The existing aging mid-water semi fleet needs to be replaced, and it is unlikely that stacked units will return to the market due to safety, cost and efficiency reasons.

“The newer and relatively lighter semisub designs for mid-water will be required for this type of drilling,” he continued. “In addition, there will be more interest and demand to drill in Arctic areas, with some operators moving into this sector already. We may see some newbuild activities for the Arctic area in the near future.”

While DSME has not been active in the conventional jackup space for many years, the company is anticipating a return to that sector after receiving a number of inquires for heavy-duty jackups for high-end markets in harsh environments, Mr Joe indicated.

 Upgrading jackup fleet

Keppel Offshore & Marine, another established company in the offshore rig-building space, has 36 jackups under construction and is anticipating strong demand for newbuilds driven by sustained high oil prices, exploration in new arenas and a shortage of high-spec rigs. “Analysts are estimating that the jackup market will

The R&D team at Keppel has developed new technologies to support E&P in deeper waters and harsher frontiers, such as an Arctic jackup being co-designed with ConocoPhillips.

remain undersupplied over the next two years, and there is still high demand for high-spec jackups,” said Wong Kok Seng, managing director, offshore, for Keppel Offshore & Marine and managing director of Keppel FELS. “Even after accounting for some 80 deliveries by 2015, more than half of the world’s jackup fleet will be over 30 years old, driving the replacement cycle for further rig orders and upgrades.

“Post-Macondo, the industry is more acutely aware of the importance of safety and reliability,” he continued. “This has resulted in a rig replacement cycle being driven by operators’ growing preference for newer, high-spec rigs that boast strong safety and efficiency features.”

Other features include longer leg lengths, from 350 ft to 400 ft; bigger spud cans for soft soil conditions and harsh climates; accommodations for up to 150 people; higher hookloads for the  drilling package; better escape means and protection from the drill floor; and an increase in mud pit tank capacity and design density. The company also is manufacturing CJ70 jackups, six DSS 38E semisubmersibles, one semi tender drilling rig and two floating accommodation vessels. Rig modifications are specific to site conditions, and upgrades are done to meet new contract requirements and regulations in specific markets.

Left and above: NOV supplied controls systems, top drives, iron roughnecks and drawworks for both the Seadrill West Callisto jackup and the ENSCO DS-6 drillship. Both the drawworks and derricks are trending bigger and heavier on newbuilds, with derrick ratings going from 1,000 tons to 1,250 tons of maximum lifting capacity. New drillships are also often coming with dual derricks.

PEMEX’s recent announcement to increase its jackup fleet and ongoing business from Brazil, particularly in the repair, maintenance and rig upgrade sectors, as other indicators of demand. Keppel also is building several harsh-environment jackups for the North Sea and is seeing interest in expanding fleets in the Caspian Sea, Asia Pacific and West African markets.Over the past decade, Keppel has invested more than $1.5 billion in expansion and upgrades of its shipyards, including the addition of new floating docks in some yards, and enhancing facilities with increased technology and automation, including automated pipe shops. The company also is embarking on the phase two expansion of the Keppel Nantong shipyard in the Jiangsu Province of China to increase the yard’s capacity for offshore projects.

DSS is a trademarked term of Keppel FELS.

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Automated control system integrates preventive and predictive maintenance functions

Integrated Drilling Equipment’s second-generation, automated Centurion drilling system has been installed on a rig for Lewis Energy in the Eagle Ford play.

By Katie Mazerov, contributing editor

Integrated Drilling Equipment (IDE) has introduced the second-generation, automated Centurion drilling control system on a new 1,500-hp AC Sparta rig for Lewis Energy in the Eagle Ford Shale.

The new system, developed by IDE’s Automation and Controls division, combines preventive and predictive maintenance functions, such as coriolis flow meters, to measure real-time drilling fluid density, mass flow and temperature and pressure readings. It is designed in an open architecture software platform to deliver real-time information and control to drilling contractors, operators and service companies.

“Using this type of platform enables service companies to employ specialized applications for control of the auto-driller and pressure control aspects of rigs,” IDE CEO Steve Cope said. “The use of customer-supplied applications allows for optimal rate of penetration while maintaining zone management and the safety of personnel and machinery.”

The software technology used with the Centurion system also eliminates the need for customers to learn another interface, he added. Information can be accessed onsite and offsite via the  internet or by using a personal computer, smartphone or tablet.

“With this system, we’re taking existing technology and implementing it in a new way on land-based rigs to increase efficiency, accuracy and predictability,” said Charlie Piper, IDE vice president of technical products. “For example, the system can perform oil analysis to give us the real-time properties or viscosity of the diesel powering the rig so we know how much life is left in the diesel before it needs to be changed,” he said. Data from the new system to better understand the trigger points for preventive maintenance and measure the system’s economic viability is being collected and analyzed at 60- and 90-day intervals.

The Centurion system package for the Lewis rig is outfitted with a full package of options, including an integrated, self-aligning satellite system with high-speed broadband; offsite access to all systems; full communication systems with voice over IP; telephone; IP camera and DVR system; fire and gas detection; real-time logging, and offsite data collection and reporting. “By using our own satellite system, we are able to collect and aggregate the data and transfer it quickly to our monitoring facility,” Mr Piper added.

The Sparta Drilling System, one of IDE’s engineered rig packages offered in 500-kip, 750-kip and 1,000-kip (a kip is 1,000 lbs of force) load ratings, features a modular self-elevating mast and a substructure with an integrated walking system. It is designed to be fast-moving for efficient rig moves from pad to pad and well to well. The rig also features the latest AC variable frequency drive technology, proprietary drilling controls and automated options.

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Environmentally friendly proppant technology to improve hydraulic fracturing efficiency

Preferred Sands uses non-phenolic, resin-coating technology at its plant in Genoa, Neb. The technology is designed to be more environmentally friendly and efficient than conventional phenolic-based resins and has been introduced in five US basins, including the Permian, Bakken, Mid-Continent, Utica and Eagle Ford, and in central Alberta, Canada. Preferred Sands plans to open a second processing plant in May.

By Katie Mazerov, contributing editor

Preferred Sands has launched a non-phenolic, resin-coating technology designed to be more environmentally friendly and efficient than conventional phenolic-based resins.

The technology, developed in collaboration with Dow Chemical Company, has been introduced in five US basins, including the Permian, Bakken, Mid-Continent, Utica and Eagle Ford, and in central Alberta, Canada, said Preferred Sands founder and CEO Michael O’Neill. The product has been used by more than 50 operators in more than 100 wells.

“This innovative process allows for coated sand to be produced in a manufacturing process that requires less energy while minimizing environmental impact compared to current phenolic resins,” he said. “It also provides the industry with an outstanding performance-to-cost value, enabling users to substantially improve operations while still curtailing expenses.”

The resin was developed to meet three critical needs of the oil and gas industry. “Not only does it perform well under a range of conditions and depths, it is also cost-effective and contributes to the sustainability of the drilling process,” Mr O’Neill continued.

Phenolic-based resins, which contain phenol and formaldehyde, can leach into well water or impact viscosity or cross-linking fracturing fluids used to place the proppant, he explained. In addition, partially cured phenolics often fully cure before the fracture has the opportunity to close and force particle-to-particle contact, thus are unable to create a strong consolidation or bond.

The non-phenolic products do not bond until they achieve closure stress, so they can hold all the bond strength ability to consolidate in the fracture, resulting in greater efficiency and reduced cost.

The technology marks two new product lines for the company, each addressing specific well conditions. The RCS Garnet is designed to control flowback in low-temperature reservoirs and includes a built-in ability to bond at low temperatures that does not require additional chemical treatment. “Phenolics came out of the foundry industry and were made for very hot temperatures, so they struggle to perform at lower temperatures,” Mr O’Neill explained.

Activators, which can be added to conventional phenolic resins to help them create a low-temperature bond, often cause the surface of the resin to deform under stress and so perform with mixed results. “Weakening the surface lowers the conductivity of the phenolic,” Mr O’Neill said. “The RCS Garnet doesn’t require an activator, so it holds its strength and conductivity and will bond all the way to down to below 80°F,” he said.

A conveyor belt transports sand before it is coated with Preferred Sands’ non-phenolic resin technology.

The RCS Pearl was developed to deliver better bond strength and flowback protection in hotter, deeper wells. Preferred Sands expects to introduce two additional products in September, Mr O’Neill said. The company also will open a second processing plant in May and has been approached by operators in several countries interested in using the non-phenolic resin technology. Germany and several other European countries don’t allow phenolics to be pumped into wells.

“The future of hydraulic fracturing is going to be about who delivers the most value for clients and the greatest technical efficiency, and the ability to innovate and create new products,” Mr O’Neill said. “For hydraulic fracturing to be sustainable for the long term and stand up to scrutiny, industry needs to continually look at improving all aspects of the process.”

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