drilling through a world of change - society of petroleum ...single shot acid bottle surveying totco...

© 2013 Baker Hughes Incorporated. All Rights Reserved.

© 2013 BAKER HUGHES INCORPORATED. ALL RIGHTS RESERVED. TERMS AND CONDITIONS OF USE: BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES THAT THE DOCUMENT TOGETHER WITH ALL INFORMATION INCLUDED THEREIN IS THE CONFIDENTIAL AND

PROPRIETARY PROPERTY OF BAKER HUGHES INCORPORATED AND INCLUDES VALUABLE TRADE SECRETS AND/OR PROPRIETARY INFORMATION OF BAKER HUGHES (COLLECTIVELY "INFORMATION"). BAKER HUGHES RETAINS ALL RIGHTS UNDER COPYRIGHT LAWS AND TRADE

SECRET LAWS OF THE UNITED STATES OF AMERICA AND OTHER COUNTRIES. THE RECIPIENT FURTHER AGREES THAT THE DOCUMENT MAY NOT BE DISTRIBUTED, TRANSMITTED, COPIED OR REPRODUCED IN WHOLE OR IN PART BY ANY MEANS, ELECTRONIC, MECHANICAL, OR

OTHERWISE, WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF BAKER HUGHES, AND MAY NOT BE USED DIRECTLY OR INDIRECTLY IN ANY WAY DETRIMENTAL TO BAKER HUGHES’ INTEREST.

Drilling Through a World of Change Putting Science into our Decision-making Process

Allen Sinor Vice President, Global Accounts

Baker Hughes

25 July 2013 Gulf Coast Section

2

Increasing Demand in a

Changing World

Demand, Price & CAPEX

3

50

55

60

65

70

75

80

85

90

95

100

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900 1

97

5

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

Oil

Dem

an

d a

nd

Pro

du

ctive

Ca

pa

city (m

bd

)

Ca

pe

x in

$ B

illio

ns (

20

10

$)

/ R

AC

C (

20

10

$)

Source: Barclays, Bloomberg, IEA, BHI Estimates

CAPEX

Oil Price

Demand

Capacity

Worldwide Outside NA NA

2012

Oil Price - $89/bbl

CAPEX - $539 billion

Demand – 90 mbd

Capacity – 93 mbd


Our Global Population Has Exploded

4

US Department of Commerce

US Census Bureau

2013 – 7.1 Billion

Population Growth Throughout History


Our Global Population Has Exploded

5

US Department of Commerce

US Census Bureau

The World Gains One Person every

13

SECONDS!

© 2013 Baker Hughes Incorporated. All Rights Reserved. 6

Beijing, China 21,000,000 People


Seoul, South Korea 11,000,000 People


Sao Paulo, Brazil 12,000,000 People


The U.S. is now No. 2 in Energy Consumption

The Wall Street Journal,

July 19, 2010

9


Global Energy Consumption Change Non-OECD countries will account for 86% of the

increase in global energy use in the next 20 years

OECD- Organization for Economic Cooperation and Development

10

© 2013 Baker Hughes Incorporated. All Rights Reserved. EIA 2012 Outlook

37%

20% 8%

26%

9%

US Energy Consumption

Petroleum and Other Liquids

Coal

Nuclear

Natural Gas

Renewable Energy

U.S. Energy Information Administration

Annual Energy Review 2011

11

2035

32%

20% 9%

26%

13%


The Drivers for Learning

(and Quickly)


Our customer base is evolving


IOC NOC Independents

13


We need to plan better

14

Gulf of Mexico, circa 2004

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

$0 $20 $40 $60 $80 $100 $120 $140

Well Cost, $MM

TD

, ft

. B

ML

Pre-drill AFE Actual Cost

Planned Cost- $44MM

Avg. Actual Cost - $71MM

World Oil Casing While Drilling Technical Conference, March 2004

“Close Tolerance Liner DrillingTM and Liner Requirements for Deepwater Applications”


Our learning is inconsistent Learning Curve Case Studies

35

Sequence

Days

Applying New Technology Losing Key Personnel Forgetting Curve

Sequence

Days

0

50

100

150

200

250

0 5 10 15 20 25 30

No Learning

Days

Sequence

0

25

50

75

100

0 1 2 3 4 5 6 7

Fast Learning

Sequence

0

25

50

75

0 5 10 15 20 25 30 35 40 45 50

Slow Learning

D

ays

1977 1984 0

25

50

75

100

0 1 2 3 4 5 6 7 8 9 10 11 12

Sequence

0

10

20

30

40

0 10 20 30 Sequence

Days

SPE 15362- The Drilling Performance Curve

0

100

200

400

500

0 5 10 15 20 25 30

Days

300

15


And, failure is not acceptable

16

2010 Deepwater Horizon Disaster

April 2010

Died: 11 workers

Lost: Deepwater Horizon

Spilled: 200,000,0000 gal

Mkt Cap Loss: $100 Bn

Industry Impact:

ONGOING

17

A

Is Needed!


The “big three” reasons for change

18

#1 The cost

of failure

Jan 2012

Offshore Nigeria

K.S. Endeavor Jackup

Gas kick, 12-1/4” hole

2 died / 152 evacuated

Relief well June 18th

Mar 2012

Offshore UK

Elgin/Franklin Platform

P&A activities

Gas leak- 200,000 m3/d

238 worker evacuated

Six months for relief well



19

#2

People make

mistakes

We can train our brain-

“Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it

deosn't mttaer in waht oredr the ltteers in a wrod are, the

olny iprmoetnt tihng is taht the frist and lsat ltteer be at the

rghit pclae. The rset can be a total mses and you can sitll

raed it wouthit porbelm. Thsi is bcuseae the huamn mnid

deos not raed ervey lteter by istlef, but the wrod as a wlohe”

-But miss details due to routine



20

#3

Less Risk


The Evolution

of Drilling


A little bit of drilling “history”

2000 B.C.

Sichuan Province

China

1800’s

Cable Tool Drilling

Late 1800’s

Offshore California

35 ft Water

1900’s

Rotary Drilling

22

Percussive

Iron head, bamboo pipe

2009

Deepest Offshore

2013

Deepest Water

GoM- 35,050 ft MD

India- 10,385 ft Water


Rig Types and Daily Costs

Jackup Rig

Avg. Day Rate

$95,000

Land Rig

Avg. Day Rate

$12,000 - $20,000

Drillship

Avg. Day Rate

$452,000

Semisubmersible Rig

Avg. Day Rate

$365,000

23


Drill Bit Innovation… In-Bit Sensing

MultiSense™

24

1909

Howard Hughes

Two cone

“Fish Tail”

1920’s

TriCone™

1950’s

Carbide Tricone™

Hybrid Drill Bit

Kymera™

Next Generation PDC Bit

Talon 3D™

Casing Drilling

EZCase™


Moving in the Right Direction

25

1900 1960 1970 1980 1990 201020001910 1920 1930 1940 1950

Entirely Vertical /Blind"Straight Holes"

MagneticSingle Shot

Acid Bottle Surveying

Totco DriftTool

StabilizedRotary BHA's

HardwoodWedges

GyroscopyTechnologyDevelopment

SteelWhipstocks

Relief Wells

Multilateral in Russia

Mud Motor

Jetting Method

Surface readoutGyro

Bent Housing Motor

Measurament Wile Drillin (MWD)

Rotary Steerable Systems

Gyro MWD

Adjustable Gauge Stabs

Horizontal Drilling Viable

North Seeking Gyro

Magnetic Steering Tools

Extended Reach Record 40,604'Gyro Steeting

Tool


Why Horizontal Drilling?

Lower environmental impact

Reduced capital expenditure in offshore fields

Access to offshore reserves from land

Optimized productivity and field recovery

Improved recovery factor

Increased flow of heavy oil from offshore fields

26


Developing a Reservoir Drilling and

Completion Model


Well Construction: Conventional Directional Drilling


Well Construction: With RSS or RNS


Multi-Pad Development Drilling

30


Technology Enablers

Vintage

Area

Contacted

(ft2)*

Reservoir permeability

Gas Oil

Ve

rtic

al

Open Hole 1800s 200 10 100

Perforating 1920s 500 10 100

Fracturing 1940s 3,200 1 10

Big Fracs 1980s 240,000 0.01 0.1

Ho

rizo

nta

l

Open Hole 1980s 8,000 1 10

Bi-Wing Fracs 2000 1,200,000 0.001 0.01

Complex Fracs 2005 10,000,000 0.0001 0.001

Many-Stage Complex 2009 20,000,000

0.00001

0.0001 40-stage frac 2011 28,000,000

Source: EOG Estimates BH Estimates

Evolution of completion technology

31


Vertical Fractured Well

1880s 200

1920s 500

1940s 3,200

32


Horizontal Fractured Well

1880s 200

1920s 500

1940s 3,200

1980s 240,000

1980s 8,000

2000 1,200,000

33


Long Horizontal, Multi-Stage Frac

1880s 200

1920s 500

1940s 3,200

1980s 240,000

1980s 8,000

2000 1,200,000

2005 10,000,000

2009 20,000,000

34


40 Stage Frac

1880s 200

1920s 500

1940s 3,200

1980s 240,000

1980s 8,000

2000 1,200,000

2005 10,000,000

2009 20,000,000

2011 28,000,000

35


What Lies Ahead?


The Future?

37

It is no longer about drilling

“further / faster”

Instead,

Risk mitigation

Global knowledge

Automation


© 2013 BAKER HUGHES INCORPORATED. ALL RIGHTS RESERVED. TERMS AND CONDITIONS OF USE: BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES THAT THE DOCUMENT TOGETHER WITH ALL INFORMATION INCLUDED THEREIN IS THE CONFIDENTIAL AND

PROPRIETARY PROPERTY OF BAKER HUGHES INCORPORATED AND INCLUDES VALUABLE TRADE SECRETS AND/OR PROPRIETARY INFORMATION OF BAKER HUGHES (COLLECTIVELY "INFORMATION"). BAKER HUGHES RETAINS ALL RIGHTS UNDER COPYRIGHT LAWS AND TRADE

SECRET LAWS OF THE UNITED STATES OF AMERICA AND OTHER COUNTRIES. THE RECIPIENT FURTHER AGREES THAT THE DOCUMENT MAY NOT BE DISTRIBUTED, TRANSMITTED, COPIED OR REPRODUCED IN WHOLE OR IN PART BY ANY MEANS, ELECTRONIC, MECHANICAL, OR

OTHERWISE, WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF BAKER HUGHES, AND MAY NOT BE USED DIRECTLY OR INDIRECTLY IN ANY WAY DETRIMENTAL TO BAKER HUGHES’ INTEREST.

Drilling Through a World of Change Putting Science into our Decision-making Process

Allen Sinor Vice President, Global Accounts

Baker Hughes

25 July 2013 Gulf Coast Section

drilling through a world of change - society of petroleum ...single shot acid bottle surveying totco...

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