Key automation: Advance of oilfield services in Nigeria

Nigeria

With domestic and international companies actively operating in Nigeria’s onshore and offshore fields, the introduction of new technologies will continue to play an important role in the countries hydrocarbons industry. TOGY spoke to Femi D. Thomas, the managing director of Weatherford in Nigeria about drilling services provision in Nigeria from underbalanced drilling to managed pressure drilling (MPD).

Nigeria’s upstream oil and gas industry is entering a period of unprecedented dynamism, with international oil companies focusing increasingly on offshore deepwater plays while local operators are growing through recently divested and acquired onshore and shallow water assets. At both ends of the spectrum, the advent of key technologies that improve operational efficiency, safety and cost savings will be a key driver of growth.

TRANSFORMERS: Oilfield services companies are at the heart of these transformational practices. With more domestic companies filling the gaps with niche services and driving down prices in certain product or service areas, such as tubular services, fishing and re-entry, international companies are targeting higher-end sectors with a technology-oriented value proposition.

“In 2015 and 2016, the market will see a shift in dialogue towards using more sophisticated technologies. We support and encourage local services companies to operate in lower product sectors, as this pushes us towards new opportunities and spurs innovation,” Femi D. Thomas, the managing director of Weatherford in Nigeria, told TOGY.

KEEP CALM AND DRILL: One key technology penetrating the market is managed pressure drilling (MPD). The technology consists of a rotating control device, an annular rotating flow diverter that seals around the drill pipe while drilling, allowing for constant surface backpressure to be held, which translates to an on-demand equivalent circulating density for the driller.

If the system detects an influx of gas or liquid, it will automatically adjust the surface backpressure to compensate and circulate out the influx, while keeping the bottom-hole pressure constant so that drilling can continue without having to shut-in the well.

Having an automated system that gives operators the ability to change their equivalent mud weight instantly, allows for drilling across the full pressure gradient, including situations where their is unknown, high or abnormal pressure under formation, wellbore instability, differential sticking and narrow pore/franc drilling windows.

“Prior to this technology, operators would have to wait one month to ensure that the well did not take a kick influx and spend several days to weight-up and circulate their mud systems in the event that an influx was encountered,” said Thomas. “MPD gives you an on-demand mud weight and bottom-hole pressure, greatly reducing the time spent dealing with the mud systems. With MPD, you can go closer and actually drill at the pore pressure,” he added.

Additionally, MPD systems can detect an early influx and deal with it automatically, quickly and safely. Direct financial benefits come in the form of reduced insurance rates and far less non-productive time for deepwater offshore rigs. With offshore deepwater rigs costing in the region of $1 million per day, the ability to continue drilling and reduce downtime despite the influx of gas or liquids can lead to significant cost savings for clients.

NO SIZE FITS ALL: While international oil companies engaged in deepwater exploration and production stand to gain from the usage of MPD, local players in swamp and land-based plays can benefit through a more customised and tailored approach.

“For domestic companies with less financial resources and engaged in less technologically intensive plays, the key is to come up with innovative pricing structures by either bundling services together or adopting an integrative approach,” said Thomas.

Weatherford’s indigenous operator programme, for example, seeks to tap into this opportunity; the company has placed a well engineering and project management engineer with Pillar Oil – an emerging domestic company,” said Thomas.

“MPD is not a one-size-fits-all technology. It is scalable. It is about finding a package that can suit the needs of a domestic operator, including cost and provide some measure of efficiency, safety and reliability,” he added.

Value-based billing and alternative fee arrangements are also becoming more commonplace. To incentivise clients to adopt new technology, service companies may choose to defer some of their costs to allow their client to see the value of the technology in the long run.

SPREAD THE WORD: Adoption of MPD and other key technologies would be a significant shift in market practices, according to Thomas. “Nigeria has been an oil-producing country since 1958. The market is fairly sophisticated and well developed. Unfortunately, there is a tendency to think that if we have not had a Macondo-type blow-out, though the market has seen some close calls, we never will,” said Thomas.

“There is a significant amount of work that needs to go into educating rig and drilling managers about the importance of new technology that has the potential to cut costs and make drilling safer and more efficient,” concluded Thomas.

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