Download - Sonatrach Well Costing
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
Introduction to Hydrocarbon Exploitation
2005 Abalt Solutions Limited. All rights reserved
Development Phase
Well Costing
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Well Economics
Maximizing revenue by:
Increase in probability of finding
hydrocarbons.
Controlling costs of Drilling and
Production. Planning and Design of wells to produce
at optimum flow rates with respect tosafety and reliability.
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Drilling Contracts
Day Rate Incentive
Bonus per foot
Significant component of contractors revenue.
Well drilled according to drilling programme.
Contractor can advice on type of bit (not decide onit)
Faster the drilling, more effective
Requires high level of Supervision and adherenceto Operators Policies.
Operator has control of drilling Provides material and equipment to drill the well
except rig.
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Drilling Contracts
Footage Contract
Rate per foot to pre determined depth, after
which day rate format.
Contractor supplies bits.
Operator can take control anytime and revert to
day rate. Contract specifies conditions for good well
integrity.
Suitable where downhole risks such as lostcirculation are low.
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Drilling Cost Categories
Fixed Costs: Wellheads, bits, site preparationetc.
Unit Costs: Bulk Barite , cement etc.
Day Rate Costs: rig hire, rental tools etc.
Some companies use Tangible and Intangible
Costs
Tangible costs are Unit and fixed costs.
In Tangible costs are day rates.
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Drilling Cost Categories
To Minimize Drilling costs-
Specify fit for purpose materials for well
Minimize NPT
Optimization of drilling times with respect tosafety and reliability
Competitive prices on materials Minimize overheads.
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Day Rate Costs- Land Rigs
1500Mud Logging services
5000Electric Logging
1200Mud engineering services
2500Cementing services
50,000Rig(2000 HP)
25,000Rig(1000 HP)
Cost/day($)
The Costs above are a rough guide and depend upon market
conditions and locations.
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
The Authorisation for expenditure is the budget for a welland prepared and signed by a senior manager from theOperator.
It contains
Project Description
Summary of expenditure
Partners shares
Well breakdown costs
AFE
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Drilling Time estimate
Drilling time on hole, circulation, wiper trips ,tripping , side tracking , directional work and
hole opening.
Flat times spent on running and cementingcasing, make up BOP and wellheads.
Testing and completion times
Formation evaluation time
Rig up and down
Non Productive time (NPT)
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Well Costs
Rig Costs
Tangibles
Services
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Well Costs
Rig Costs Cost of hiring drilling rig and associated equipments.
Depends upon rig rate per day ($/day)
Rig rate depends upon :
Type of rig
Market conditions
Length of contract
Days on well
Mobilization and Demobilization of rig
Supervision Other charges
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Well Costs
Tangible Costs Refer to products used on the well.
Casing Tubing Completion equipment Wellhead accessories Bits Core heads Cement products Mud products Solid control consumables Fuel Other supply materials
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Non Productive Time
Any time that has been spent for routine orabnormal operations which are carried out as a
result of failure.
It is important to realize that each step should
follow preceding step without delay.
Each step should take least possible time with
good practise.
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Non Productive Time
Classification of NPT
Repair Time
Rectification time
Client time
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Non Productive Time
Repair Time
Time spent on repairs on the rig and
related equipment during which drillingoperations is shut down.
Any operation that might be carried out
to place the well in safe conditions beforeattempting repair and on completionreturning the well to former status.
Waiting on spare parts, weather orpersonnel before normal drilling
operations are carried out.
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Non Productive Time
Rectification time
Time spent in overcoming downhole
problems that delay operations.
Some of the operations are :
Freeing stuck pipeFishing lost cones
Squeeze cement
Well kill operation
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Development Phase
September October 2005abalt solutions limited - 2005
INTRODUCTION TO HYDROCARBON EXPLOITATION
DrillingTechnology-WellCosting
2005 Abalt Solutions Limited. All rights reserved
Non Productive Time
Client Time
Time spent on operations requested byclient that was not included in the drilling
program earlier.
These are not NPT, but indirectly linkedand might affect the AFE.
Operations are
Plugging back
Extra coring
Extra logging