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With Automation in Hand Drillers Demand a Raise

Source: Hess.
Hess’ Bakken play has become a test site for using six drilling rigs with many automated functions to drive a process improvement program.

Drilling automation advances now appearing on rigs would seem to offer a great opportunity for service companies to demand a raise. The likely answer from oil companies, though, remains no.

The argument that oil companies need to pay for much needed technology advances collides with a brutal North American onshore rig market where shrinking demand keeps a lid on fees, according to drilling and service company experts on a panel at the recent SPE Annual Technical Conference and Exhibition.

The cost-cutting pressure has been on since the oil price crash that started in 2014. In this survival-of-the-fittest market, high-efficiency, modern rigs have won out. While the number of rigs working in the Permian Basin is down 20%, the number of wells and feet drilled is little changed. As a result, the bottom line for drilling contractors has suffered because the survivors are reducing the number of days of pay per well.

Drilling rigs with digital control systems that can consistently drill a curve faster, and smoother than a directional driller can, are an example of digitally controlled systems appearing on rigs. New contract terms rewarding service companies for delivering those efficiency gains are not part of that advance.

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With Automation in Hand Drillers Demand a Raise

Stephen Rassenfoss, JPT Emerging Technology Senior Editor

01 February 2020

Volume: 72 | Issue: 2

No editorial available

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