Managing costs is critical for drilling operations to achieve profitability and sustainable growth. This article will delve into the factors that affect drilling costs and provide practical strategies to manage them. At Aurora, we are committed to providing actionable insights to support oil and gas operators in the effective management of drilling costs. Read on for a comprehensive guide on cost management in drilling operations.
Be aware of factors driving high costs
It’s no secret that drilling operations are costly. Higher rig rates, well and completion costs and process inefficiencies have contributed to an overall cost increase of over 200% since 2007. Moreover, there are further factors negatively contributing to drilling operations. Understanding these factors and how they could impact your operations is essential for effective cost management.
- Inadequate pre-well planning
Failing to follow a thorough pre-well planning process due to time constraints will likely lead to expensive repercussions further down the line.
- Inefficient drilling systems
Choosing the wrong drilling system can adversely impact operations, as the system will not deliver the desired performance.
- Drill bit and downhole tool wear
Drill bit and Downhole wear can impact the time taken for drilling, the accuracy of wellbore placement, and the effectiveness of drilling techniques, ultimately driving higher costs.
- Tool failures due to excessive downhole drilling dysfunction/ vibration
It may be tempting to try and ‘power through’, but the cost of tool failures and repairs will significantly impact the overall expenses, leading to rig downtime.
What can you do to manage costs?
We have found that around 90 – 95% of all common issues whilst drilling can be eradicated at the pre-project phase. Hence, we recommend investing time and money in this phase.
At Aurora, we offer a complete service to help you optimise operations. We can run our proprietary indexing models – AWOS, BE3, C3 – to provide detailed drilling system analysis. This process provides the most effective way to manage overall well cycle cost. It allows you to analyse all the available data and deliver detailed drilling solutions that systematically cover all potential hazards.
Investing in the pre-project phase eliminates costly knee-jerk reactions after starting the project. In a recent Central North Sea project, our Aurora team helped deliver over £1,000,000 in savings using our models and frameworks.
How does Aurora’s software help you manage costs?
Let’s talk about AWOS, our in-house proprietary software. AWOS is a cost-effective solution to support digital, data-driven decisions for optimised drilling performance. The software enables well planning, execution, and post-well phases, providing a high-level risk assessment analysis for the entire section, well, or wells being drilled. The AWOS platform highlights when the drilling system loses its efficiency at the pre-well planning stage.
The main benefit of AWOS is that it allows you to follow a proactive approach by starting the analysis from the pre-planning stage rather than when a costly drilling operation is underway. Based on the information gathered by AWOS, our team can advise you on any possible major changes needed before the commencement of drilling operations.
Then, we use our standalone benchmarking tools, C3 and BE3, to help avoid costly, unnecessary round trips caused by ineffective drill bit selection. These benchmarking tools assess drill bit durability and efficiency, a key factor for better drilling performance. So, we ensure that the correct drill bit selection is made in every drilling operation.
Key takeaways: Recommendations for managing drilling costs
- Develop a detailed pre-project analysis that covers geology, AWOS overview of past performance, and BE3 & C3 indexing analysis of the drill bits used.
- Use AWOS in real-time to help you ensure the energy in of a given drilling system delivers the efficiency out.
- Create a thorough plan. We can’t emphasise enough the importance of planning! Plan what to use, and then use what you plan.
By implementing strategies that strengthen the pre-project phase and utilising innovative software solutions like AWOS, oil and gas operators can improve safety, extend tool lifespan, enhance operational efficiency, and reduce downtime. Prioritising cost management can lead to sustainable profitability in drilling operations.
To discuss your current or upcoming drilling projects, contact our team of experts and find out more about the benefits of working with Aurora.