Posted on 01/04/2008 10:07:23 AM PST by thackney
Baker Hughes' center is dedicated to tools for harsh environments
Finding oil in the deepest waters of the Gulf of Mexico and other offshore regions is one thing. Pulling it out of a tiny hole 5 miles below the seafloor is another.
In response to the latter challenge, Baker Hughes has just opened the first phase of a $41 million research center in northwest Houston devoted to designing tools that can operate in deep-sea rock formations and other harsh environments.
The center, scheduled for completion this summer, is among the first of its kind in the world, and will address what some view as a technology gap between today's equipment and what will be required to produce oil from those regions in the future.
It also finds Baker Hughes, the world's third-largest oil-field-services company, betting the industry's recent push into deeper waters will be a bigger source of business in coming years.
"From a worldwide environment, we're finding ourselves getting pushed into more hostile environments to develop oil," said Gary Flaharty, director of investor relations for Baker Hughes.
"And the technology to complete those wells by and large doesn't exist today."
Baker Hughes is one of several Houston companies that make the valves, pumps and fluids necessary for extracting crude from deep waters.
Technical challenges With crude prices nearing $100 a barrel, those deep-water regions have become more attractive places to invest. Yet technical challenges remain.
In the Gulf of Mexico, for example, oil companies are excited about an area of ancient rock beds known as the lower tertiary trend, hailed as the biggest discovery since Alaska's North Slope in the late 1960s.
Yet reservoirs there are 30,000 feet under the seafloor in places and are hidden under nearly 10,000 feet of water. Getting to the rock means sending drills into densely compacted formations, where high heat and pressures are straining equipment.
"Certainly, there's always a need for tools that can go in both higher pressure as well as higher temperature environments," said Gregory Simmons, manager of deepwater exploration for Oklahoma City-based Devon Energy, which has a stake in four discoveries in the Gulf's lower tertiary trend.
At Baker Hughes' new research center, engineers are already working on those more robust tools, even as the facility's second phase is still being built around them.
One area of emphasis is well completion — the final step in preparing an already-drilled well to produce oil.
It involves the installation of specialized tools down-hole that regulate the flow of hydrocarbons from the reservoir to the surface.
"Trying to put a completion in that can handle those pressures and temperatures that will last for 15 to 20 years, it's a strain on the metals, the alloys, the electronics, the down-hole elastomers," said Baker Hughes' CEO Chad Deaton, referring to rubbery materials.
"Completing those wells is a whole new story," he said after a presentation at an energy conference in Houston in December.
Eight test areas That's why Baker Hughes is testing everything from alternative materials that hold up under high heat to electronic systems that are better able to respond to changing down-hole conditions by remotely adjusting valves from computers at the surface.
The research center includes eight test areas called cells that simulate extreme down-hole temperatures up to 700 degrees and pressure of 40,000 pounds per square inch.
Two of the cells are 75 feet tall, with 20-inch concrete walls and a 7,000 pound steel door.
Today, the industry's definition for high temperature is 350 degrees or greater, and high pressure is 10,000 pounds per square inch or more. But the facility aims to create tools that are able to operate at temperatures and pressures that are at least double those levels.
"We built this thing for the future," said Oscar Herrera, director of engineering services for Baker Oil Tools, a division of Baker Hughes.
Recruiting tool Baker Hughes also built the center as a recruiting tool for the best engineering talent. To that end, it has equipped the facility with a state-of-the-art machining room that allows prototypes to be built on-site rather than in manufacturing plants out of town.
The room allows engineers to make changes quickly and get tools to market faster. The facility also has 3-D printers that can make plastic replicas of tools before they are cast in steel, as well as "visualization" rooms that can monitor the status of equipment, wherever it is in the world, from Houston.
"People want to work in a high-tech environment, and that's what we're providing here," said Bob Bennett, vice president of technology for Baker Oil Tools.
Baker Hughes calls the facility's first phase, now with about 200 people, the Center for Technology Innovation.
It incorporates an existing office building but adds the machining shop and test cells. The second phase will boost employment to 600 and contain the headquarters for the company's ProductionQuest unit, other Baker Oil Tools offices and test labs for both divisions.
Those employees will likely be busy from the moment the center is done.
Deep-water regions will bring Baker Hughes "significant opportunities" in the next few years as more deep-water rigs become ready for service, Deaton said.
By 2011, 66 floating rigs and ships that can drill in water depths greater than 5,000 feet will be added to the worldwide rig fleet, said Tom Kellock, head of consulting and research at offshore specialists ODS-Petrodata in Houston.
By comparison, just 68 of the world's 703 rigs are now capable or will soon be capable of drilling in water depths greater than 5,000 feet, he said.
"This new generation of equipment will allow oil and gas companies to pursue opportunities that have been off-limits until now due to the water depths and environmental and down-hole conditions involved," he
3...2....1....Environmentalists condemned....blah blah blah
The world’s 703 rigs? There are only 703 rigs in the entire world?...........
Offshore rigs not including workover rigs? Probably ~700 is a good number.
If you want, here you can scroll through the entire list of 1,194 rigs, what kind they are and where they are located.
Sorry for the double tap.
I would have thought there would have been ten times that number at least! No wonder the oil is so expensive. Not enough rigs to get at it!........
Keep in mind that modern offshore drill rigs are not cheap to build or operate. And they take years to build.
For example:
Atwood Bags Drilling Contract from Chevron for Newbuild Rig
http://rigzone.com/news/article.asp?a_id=54825
The contract provides for an operating dayrate of approximately $470,000...
The new rig will be constructed at Jurong’s shipyard in Singapore, with delivery expected to occur in early 2011.
AOPL estimates the total cost of the rig (including administrative and overhead costs and capitalized interest) will be $570 million to $590 million.
BTTT
Red, I do not know how much you know about the industry, so please don't be insulted if I bore you with the basics. There is a lot of exploration and development going on on land, too.
With horizontal drilling we have been routinely drilling multi-lateral wells which drain the oil from a couple of square miles up in this area (Williston Basin).
Offshore plays tend to be much more productive, and they have to be to pay off.
Here, rig time and all other services on location (directional drilling, geological supervision, fuel, drilling fluids, etc.) all together runs about $50.00 per minute--over 35-60 days.
Offshore the costs are multiples of that, so when they go looking, they are looking for wells that put out thousands of barrels of oil per day, in a large enough field to develop economically (as many as 30 or more wells from a single platform).
Here, we commonly drill wells which produce hundreds of barrels of oil per day, but that would not pay their bills offshore.
So, it is rare that land based drilling is as spectacular in output as offshore wells, but there is more of it.
I was basically referring to ocean rigs since that was what the article was about. I’d thought that just Mexico and the US alone would have had that many rigs in the water, not counting North Sea and wherever else there is oil under the ocean floor. I am amazed the number is so low, IMHO.......
Once the well is drilled, you move the rig to another location.
Sorry I misunderstood.
And basically one company that does it...RIG - Transocean.
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