Preparations for the next oil boom

• ON LOW PRICES: “When oil prices are low, most oil companies reduce their drilling activities; this always affects Well Services. The main challenge we face is maintaining rigs that are stacked. This will help to prevent major expenditures when the oil price goes up and will allow drilling activity to start more effectively.”

• ON DRILLING: “Even though rig rates have decreased over the past two years, drilling on land and offshore on the west-coast has not increased. Presently, there are no rigs drilling on the west-coast and only two rigs drilling on land, one of which is Well Services’ Rig 4 drilling for Lease Operators, and the other is Petrotrin’s Rig 1 which is drilling in their fields.”

Brash also discussed the modernisation of its training courses. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Anthony Brash below.

What are the current challenges that Well Services Petroleum Company has faced in fighting to overcome the environment caused by low oil prices. What opportunities have presented themselves?
When oil prices are low, most oil companies reduce their drilling activities; this always affects Well Services. The main challenge we face is maintaining rigs that are stacked. This will help to prevent major expenditures when the oil price goes up and will allow drilling activity to start more effectively.
Another challenge is retaining qualified employees. Laying off employees forces them to seek other means of employment that is more stable during this volatile period in the oil industry. There are opportunities in the purchase of additional rigs and spares for our present rig inventory. This opportunity is evident in the weekly auctions across the United States of America where rigs and equipment are sold for 10% of their actual values. Well Services was able to purchase an additional rig for its land fleet, a Cabot 900, capable of drilling to 10,000 feet [3,048 metres]. Presently, this rig is being refurbished at the Well Services Machine Shop in Otaheite, Trinidad.

Given the reality of low oil prices, how can the country’s offshore-drilling sector address the growing need for efficiency?
Offshore drilling rigs have been forced to reduce their drilling rates as much as 50% during low oil prices. We were forced to reduce our salaries by 20%, and unfortunately, we reduced our man power by 45%. Downsizing will naturally make any business more efficient. This efficiency is gained by weeding out the non-productive employees and keeping more highly motivated and skilled employees.
Low oil prices also attract lower royalties and taxes for operators who have land and offshore fields. This should incentivise operators to drill during periods of lower oil prices in order to take advantage of better rig rates and pay fewer taxes or no taxes at all.

Do you expect more drilling contracts to be amended between operators and drillers?
Even though rig rates have decreased over the past two years, drilling on land and offshore on the west-coast has not increased. Presently, there are no rigs drilling on the west-coast and only two rigs drilling on land, one of which is Well Services’ Rig 4 drilling for Lease Operators, and the other is Petrotrin’s Rig 1 which is drilling in their fields.

Well Services provides a comprehensive set of training courses. How have these programmes evolved over the last couple of years?
Well Services has been offering training courses for the last thirty years. All of the courses are IADC certified and the drilling school has an actual rig floor simulator for its WellCap and BOP [Blowout Preventer] certification courses. Technology has finally caught up with Well Services, and we are presently offering the new WellSharp certification at our drilling school in Otaheite, Trinidad. Eventually, the older WellCap certification will be phased out.

In the years ahead, what strengths and weaknesses do you think will benefit local drilling companies in comparison to international players?
With volatile oil prices, drilling contracts presently and in the future will only be short-term contracts, six months to one year. Short-term contracts will not be attractive to international drilling companies, as their mobilisation and drilling rates would be too high to compete against local operators. Obviously, the local companies will still not be able to compete in the deep offshore acreages. However, they will be competitive in the shallow fields. As mentioned earlier, the weakness of the local drilling companies will show up in the quality of its employees, as more skilled employees will start to work with foreign operators for better rates and greater job security.

What potential do neighbouring countries, such as Guyana, represent for companies like Well Services?
Well Services has drilled on land in Guyana and for their neighbour Suriname both on land and offshore. In the future, Well Services will continue to be a provider of drilling services for both countries, as the company’s rates are competitive and it already has a successful a history with both countries.

Apart from Rio Claro, where do you hope to see Well Services in Trinidad in the next two or three years?
Hopefully within two years, the oil prices can get back into the USD-70-per-barrel range. This would incentivise operators and state-owned Petrotrin to resume drilling on land and offshore. With a proper maintenance programme on our stacked rigs, Well Services will be ready for the next oil boom.

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