February 2014
Columns

Executive viewpoint

From discrete services to integrated operations
Patrick Schorn / Schlumberger

 

A growing number of oil and gas companies—especially operators of costly unconventional and deepwater megaprojects—continuously seek ways to improve efficiency, reduce cost and mitigate risk. The ever-increasing scale, speed and complexity of operations today call for new approaches. One approach is to increase the level of integration over the various facets of the project with the goal to improve financial indicators such as “dollars per BOE.”

Historically, operators tender most of their oilfield service separately and suppliers submit separate pricing for each of their services. As a result, any potential benefit from integration within the tender is lost, and additional benefits from new technology and engineered workflows may be ignored.

As the pace and complexity of operations grow, the traditional approach—typically known as “discrete” services—becomes increasingly unwieldy, inefficient and expensive. To control costs and minimize downtime, operators may solicit tenders for “bundled” services, lumping together several related discrete offerings from a single supplier for a lower total cost. While this “bundled” approach may reduce the price, it often fails to boost efficiency, especially when all the product lines and, in many cases, the individual service providers continue to function independently.

Given the magnitude of the challenges facing the industry today, both onshore and offshore, what we need are truly integrated operations. What is an “integrated” operation? Put simply, it is one in which the interactions among the parts are fundamentally different than they have been in conventional discrete or bundled services operations. In integrated operations, all the products, services and personnel are streamlined and coordinated—across the usual domain boundaries—as if they were a cohesive system with a single objective.

As an industry, not only do we need to integrate services in field operations, at the well site, but we also need to integrate technologies and engineering workflows back in the office. The ultimate integrated operation would be one in which both parties—oil company and service provider—work together as one. The elimination of duplicate tasks, for example, between oil company and service provider would reduce cost and benefit both parties.

Last spring, for example, Schlumberger formed a strategic partnership with Forest Oil to jointly develop its Eagle Ford shale acreage in Gonzales County, Texas. Forest Oil wanted to maximize reserves, accelerate production and enhance the economic value of its asset. Schlumberger was looking for an opportunity to integrate the full range of its technologies, workflows and services across all aspects of unconventional drilling, completion, production and reservoir management.

So we decided to join forces. Even our technical and operations personnel are integrated, leveraging one another’s strengths and making collaborative recommendations on the use of technology in the field development. Results achieved to date are promising. Well costs are down by 15%, since the strategic partnership began. Drilling times have decreased nearly 5%. Together, we have realized additional efficiencies in fracture stage rates, and figured out how to get all the fracture plugs in a well milled out in a single day. And we are just getting started.

Not all integrated operations need to take place on such a grand scale. Elsewhere in the Eagle Ford, for example, the integration of geological and reservoir modeling workflows, advanced horizontal logging tools and innovative completion design technology is dramatically improving the production performance.

Of all the wells in a study that were completed geometrically, fewer than 64% of the perforations contributed to production. The rest had a negligible contribution and were essentially not optimally placed.

However, by using an integrated workflow termed “Unconventional Reservoir Optimized Completions (U-ROC),” turnaround times decreased sufficiently to allow engineers to catch up with fast-paced completion operations. By integrating geological, geophysical, petrophysical and geomechanical models, they could finally space perforation clusters geologically—that is, in zones of similar quality that would fracture equally and contribute equally to production. In the first eight laterals completed this way, perforation cluster efficiency jumped to an average of 82%. Compared with offset wells in the area, production rates from geologically completed laterals were in the top quartile.

Consider another recent integrated operation, this one in the deepwater Gulf of Mexico. The operator was planning to drill a high-risk exploration well, with limited offset data, to a measured depth of more than 25,000 ft. In this costly drilling environment, the primary goals were to minimize trips due to hole cleaning, BOP testing, tool failures or wellbore issues. Ideally, the operator wanted to drill each hole section shoe-to-shoe in one run. With only two months to develop the complete plan, a multi-domain team of experts rapidly integrated workflows and modeled multiple scenarios, optimizing the drilling bottomhole assembly design, bit selection, drilling parameters, hydraulics, logging tools and real-time monitoring operations. All hole sections were drilled flawlessly in a single run, without any extra trips, saving the operator considerable rig time, and a well cost of $18 million under budget.

It is a challenge to overcome the inertia of old, familiar ways. It takes a conscious decision and strategic vision to begin integrating technologies, workflows, services, disciplines and organizations that have long been segregated, or merely bundled. wo-box_blue.gif

About the Authors
Patrick Schorn
Schlumberger
Patrick Schorn is president, Operations & Integration, a position he assumed in July 2013. Prior to his current role, Mr. Schorn held various global management positions including president for Production Group; president for Schlumberger Well Services; president for Schlumberger Completions; and marketing manager for Well Services. He holds a BS degree in oil and gas technology from the University Noorder Haaks in Den Helder, The Netherlands.
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