Digging a little deeper

In a region where temperatures can exceed 50˚C and the harsh terrain of the desert impedes manoeuvrability, the Middle East is a challenging environment – yet one that is currently a hub for drilling activities. Traditionally, the region’s rig count has been only a fraction of that found further afield. For example, in 2006 there were more than 1800 rigs drilling for oil and gas in North America with just 221 in the Middle East. However, as more Arab countries actively explore for oil and with an increasing number planning to further develop their existing reserves, the total rig count has skyrocketed. Aramco, for instance, has significantly upped its interests in the area and increased its rig count from 35 in 2002 to 130 last year. Indeed, heavy construction is now underway in the region as countries race to replace and modernise crumbling and outdated oilfield infrastructures, often in collaboration with Western firms through partnerships and joint ventures.

Drilling contractor KCA Deutag has been at the forefront of these developments, and now has operations in Oman, Pakistan and Saudi Arabia, with the company re-entering the latter in 2006 after an absence of 11 years. According to Ian Lane, Southern Business Unit Director of the international drilling contractor, one of the most interesting developments in the region of late is how domestic operators are looking to the expertise of Western companies – particularly as a result of a newfound rush for gas rather than oil. “National operators are looking to international contractors to undertake complex gas field development projects,” he explains. “Countries previously ‘closed’ to new international operators, such as Oman and Saudi Arabia, have been opening up to new operating company entrants and drilling contractors, including Indian and Chinese contractors.”

Having supplied rigs for the South Rub Al-Khali Company (a consortium formed by Shell, Total and Saudi Aramco) and Saudi Aramco, Lane highlights how there has been increased demand for highly mobile and more efficient drilling rigs capable of drilling wells to 15,000ft or more. He has also noticed an increase in the number of EOR techniques being employed. “There are various enhanced oil recovery projects being undertaken, using steam/polymer injection, for example, and a modest increased uptake of ‘mechanisation’ in support of improved safety management,” he says.

An example of a solution to enable mobility is the company’s Nomad-class drilling rig, which is supplied to Algeria in North Africa to work for BP/Sonatrach. “The T-211 is equipped with special transportation carriages which allow the derrick and drill floor substructure to be moved as complete assemblies over flat terrain conditions, thereby reducing the rig disassembly and assembly times,” says Lane. “These assemblies can also be disassembled into smaller rig packages for moves over sand dune conditions.” As a result, the T-211 only takes five days to move up to 10km between well locations over flat terrain.

Higher performance

The ability to drill, faster, deeper, cheaper and cleaner is a top priority for operators who need to deliver quality returns as quickly as possible. The web-based Enhanced Drilling Reporting System (EDRS) enables the performance of rigs to be closely tracked. This system is found on all of KCA Deutag’s rigs operating in the Middle East, and allows operators to make an evaluation based on the regular input of key performance data, such as non-productive time, tripping and nippling up and down times. “This information is then fed back to rig crews and is used to plan and implement performance improvements, maximising efficiency, reducing downtime and helping operators to drill faster and more safely,” explains Lane.

Providing a safe environment for training is another priority for the company, and one of the ways this is effectively achieved is through an innovative Drilling and Advanced Rig Training (DART) drilling simulator. The benefit of this approach is that crews can be trained to operate a rig in a safe environment, without compromising ‘live’ operations. Outlining the advantages, Lane explains how DART simulators have helped minimise operational downtime in the start-up of new drilling rigs. “They transform inexperienced local personnel into well trained and competent drilling and maintenance crews within a relatively short period of time prior to operations commencing,” he says.

Testament to the company’s commitment to safety is its recent success in being named Shell International Exploration & Production’s Top HSE Performing Drilling Contractor of the Year for 2007 at a recent awards ceremony. Shell highly commended the company, citing its “continuous nurturing of a safety culture among all its crews, combined with a robust set of safety tools and systems” as key contributors to its excellent safety record in all operations for Shell.

Skills shortage

A challenge that continues to dominate the industry is that of the skills shortage. With a decreasing labour pool, competition for workers is fierce as operators and contractors fight to attract those with the necessary talent and expertise. Sensing the potentially negative effect this might have in the future, the company has put some measures in place to ensure it retains valuable staff and attracts new ones. “We have a strategy of developing national staff through fast-track and regular-track development programmes,” says Lane. “These programmes apply to junior and senior rig crew and maintenance teams, as well as to management and support functions. This is complemented with the recruitment of graduates and technicians from international sources, and entry-level drill crews from within the countries in which the project is taking place.”

Further challenges affecting the industry come as a consequence of having to work in remote locations. Lane explains that in these areas, the logistics chain is as stretched as the rest of the supply chain, so mobilization and other supply challenges increase. “Meeting these challenges means increasing your inventory of rig spares and ensuring that vendors of hi-tech gear can provide the required support,” he says. “Security can also be an issue in some remote places and generally communications is more of a challenge in the middle of a desert, for example.”

During a recent project, which involved operating a 3000HP rig in a remote desert location in Saudi Arabia, the company encountered a number of the common problems experienced through working in the region. Two of the key challenges included the logistical headache of the desert rig moves, which consisted of 180 loads covering a distance of up to 1400km, along with the supply chain management of the ongoing drilling operations. “The key success factors in developing and maintaining a high health, safety, environment and quality (HSEQ) focus and improving operational performance were ensuring we provided additional rig training and coaching resources, and had an integrated planning approach among the client and all contractors,” recalls Lane.

Looking to the future, he remains upbeat and enthusiastic about the outlook for the company through 2008 and beyond. “Our outlook for the global drilling industry in 2008 is very bullish,” he enthuses. “Activity levels remain at an all-time high in all regions where KCA Deutag has a presence. Our view of the medium and long-term outlook for our industry remains one of opportunity and continuing growth.”

Middle East operations

KCA DEUTAG has a long track record of successful operations in the Middle East, and is currently working in Oman, Saudi Arabia and the UAE.

United Arab Emirates

The company’s Southern Business Unit is located in Jebel Ali, UAE, and incorporates various support functions including procurement, HSE, HR and business development. The company has used various fabrication facilities in Jebel Ali as part of its extensive rig upgrade and fleet extension strategy. Recent projects include rig T-210, destined to work for PDO in Oman; the T-209, which has a contract with Shell in Nigeria; and the T-19, which has recently been mobilised for a contract for Verenex in Libya.

Oman

KCA Deutag has been operating continuously in Oman since 1964. It currently has eight rigs under contract in Oman for PDO, including T-51, a 3000hp-drilling rig that is among the heaviest of all the rigs working for any company in the Middle East. The 2000hp rig T-210, recently refurbished in the UAE, started its long-term commitment with PDO in early 2007.

The firm’s Middle East rig fleet has been designed and constructed for drilling operations in the desert where temperatures can exceed 50˚C, and all rigs are mounted on trailers for speed and ease of movement. The company is fully committed to its ‘Omanisation Programme’, designed to progressively increase the percentage of Omani citizens employed in enterprises located in Oman and build up the national reservoir of skills.

Saudi Arabia

The company was active in Saudi Arabia up until 1995, and 2006 marked its return to the Kingdom. Rig T-79 started operations in June 2006 for the South Rub Al-Khali Company (SRAK) – a consortium formed by Shell, Total and Saudi Aramco – in the Empty Quarter in the heart of Saudi Arabia. The concession is located in a harsh environment, with the nearest road 500km away.

Rig T-67 commenced operations in July 2006 for Saudi Aramco under a three-year contract. This fast-moving desert rig has most of its heavy loads trailerised, minimising move times.