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Rig intake needn’t be a gamble: answers for offshore drilling.

Phases of boom and bust, and somewhere in between, have shaped the offshore drilling business over the last ten years. So, what happens when US operators need to reactivate a rig? Have lessons been learnt?

“Operators have no leeway to get rig intake wrong,” says Johnny Benoit, LR's VP of Operations. “At OTC Houston all this week, we are explaining why its critically important that rig reactivation from a ‘warm’ or ‘cold’ stacked condition is more than just a standard equipment inspection or tick-box exercise.”

When the cost pressures are extreme, issues with rig equipment or the competency of the crew on board will quickly put a drilling project over budget. Even in a subdued market where drilling assets are cheaper to procure and the total daily costs to drill a well (spread rates) are less eye-watering, operators simply cannot afford hundreds of thousands of dollars because of project delays, non-productive time or unexpected costs.

Benoit explains: “The pattern of shorter drilling campaigns, which have shrunk from 4–5 years in length to months, will further cloud the long-term rig supply picture. That’s why it is important to make a small investment upfront in rig selection.”

A robust intake process is now a tried-and-tested approach, delivering significant savings later, and such an approach will continue to be vital to the industry.

“A rig intake process can be extensive and unpredictable, so this cannot come down to a number on a procurement spreadsheet,” says Benoit. “Understanding the technical and regulatory challenges helps operators successfully and cost effectively tender, select and accept a non-operational rig onto contract. We have seen this time and again, having supported over 500 clients to intake 15,000 rigs.”

Benoit suggests a five step approach:

1. Undertake a review of the rig’s status
Quick to execute, a desktop review will provide an understanding of the rig’s class status, depth of reactivation required and any remedial or deferred maintenance that is outstanding.

2. Review jurisdiction compliance
Regulatory bodies have shown an interest in rigs entering their respective regions, with increased focus on rigs which have been non-operational. 

3. Audit and implementation of the management systems
Operators need to assess the thoroughness and robustness of all management systems, covering HSE, emergency preparedness and crew competence. Readopting the various management systems is invariably a staged process by rig owners, and this should be of focus for any operator

4. Identify and manage risk
As soon as a rig becomes operational, the people operating it and the systems supporting it become equally as important. Risks can emanate from all or any of the three elements of people, systems and equipment (PSE).

5. Testing for rig acceptance
However long the rig has been out of operation, it is critical that a series of tests of both equipment and the rigs’ full systems form part of the acceptance phase.

Spurred on by the emphasis to drill wells more quickly, safely and cost effectively than ever before, drilling rigs have also advanced technically. Software controlled robotics and automatisation have emerged, as well as more complex downhole tools, improved dynamic positioning systems, extended capabilities and multi-purpose vessels.

“The transition from a manual to a digital offshore world is arguably the biggest breaking story in a decade,” highlights Benoit. “This brings both challenges and opportunities to operators and, like rig intake, the focus needs to be on a holistic PSE approach to reduce non-productive time, improve performance and enhance the safety of assets, personnel and the environment such as reducing pollution.”

Benoit adds: “What we are now experiencing is the start of the fourth industrial revolution, using digital and technology-based solutions, such as applying analytics to various data sets, to provide services beyond traditional core offerings. Operators are approaching us to help them embrace the use of data for smarter drilling, notably in the Gulf of Mexico where warm or cold stacked rig reactivation is less pronounced and assets tend to be of high specification. Our value-added support means we can be involved right from the start with the front-end analysis of a project to help with financial modelling and ensure operators gain a return on investment.”

Lloyd’s Register is promoting its drilling rig expertise and commercial innovation at OTC Houston from 6 to 9 May 2019 at Booth # 3761 or click here for more information.

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