Industry studying fluids management, long-term effects of synthetic muds

Sept. 1, 1999
Fluid firms trying to meet global standard

Two of the biggest issues in drilling and completion fluids over the past year are the closer look given to the long term environment effects of synthetic oilfield drilling and completion fluids and integrated approaches to wellsite fluids manage ment. Advantages of using an integrated approach to effectively manage all aspects

of a given fluids program is becoming more apparent.

Environmental issues have always played a key role in the development and use of oilfield fluids, but the interest has increased significantly in the "regulatory 1990s." Also, the accelerated expansion of the oil industry into deepwater pushed existing technologies to the limit, and brought about extensive use of oil based muds.

Environmental standards

With minimal global standards available, national governing agencies in the various oilfield operating areas around the world developed their own rules and regulations for oilfield operations. For example, the Nigerian Department of Petroleum Resources (DPR) regulates the oil industry environment and approves drilling fluids before use in Nigeria.

Approval processes involve conducting toxicity and biodegradability tests to assess the impact of the fluid in question when discharged (along with cuttings and spent mud) in the environment. It is yet to be seen what minimum standard other neighboring West African countries will follow.

Mud companies around the world continue to design environmentally sensitive drilling and completion fluids.
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The increase in the use of synthetic muds in the Gulf of Mexico has generated discussions on the environmental impacts of discharged mud cuttings. Discussions and evaluation processes have reportedly been initiated between the U.S. Minerals Management Service (MMS) and Environmental Protection Agency (EPA). Close collaboration of these two federal agencies has been sparse in the past, but this trend may be changing. One good benefit of this collaboration could be a shorter evaluation period, usually an extended and inconvenient amount of time.

The North Sea's UK and Norwegian sectors continue to see lots of activity in environmental regulatory issues. The long-term effects of discharged synthetic mud cuttings, is getting focused attention.

Regulators have progressively tightened the rules governing the discharge of oils, chemicals, and rock cuttings in North Sea waters. In order to continue to drill and discharge cuttings to the seafloor, a number of synthetic-based drilling fluids (muds) were developed as an alternative to mineral oil and diesel based fluids.

These fluids give a similar technical performance to mineral and diesel-based muds, and were intended to have minimal impact upon the environment. However, it has subsequently been found that some of the fluids actually have a substantial impact on the environment, and have since been subjected to regulation.

Fluid management

One of the major changes during the past year on the operational side of the fluids business is an integrated approach to fluid management. The trend is changing how companies are structured and present themselves to customers, which has led to the buzzword in corporate America - "solutions."

Large and small companies have restructured to better service customers in this new "customer needs" environment. This has been applied to the oil and gas industry in many different ways - the drilling/completion fluids business is no exception. In an industry growing rapidly, and spreading into remote areas, this type of operational structure allows for more flexibility and synergy of services.

Some service providers have formed independent groups, specifically for managing entire integrated service projects. All aspects of project management are addressed, with multiple services being managed by one team. Operators are continuing to give more control of operational engineering and management to service companies.

The main purpose of the focused groups is to optimize the planning and decision-making processes of these added responsibilities. Other benefits to operators include more efficient Health, Safety, and Environment management at rig sites, easier financial billing and accounting, and fewer assets and personnel required for project management.

The trend has fostered a smaller, integrated technologies approach for addressing single well site management projects. The difference in this approach is more focus on technology management, as opposed to total project management. One service provider has gone so far to include waste fluids management with fluids engineering design.

Emphasizing a planning-to-production approach, this management philosophy is highly applicable when drilling in remote, hard to access locations and in sensitive wilderness and wildlife areas. The approach allows service providers to address their clients' demand for greater unification of existing miscellaneous well services. The alignment of goals with their clients' allows for a "pay for performance" pricing strategy - proving to be favorable for both the service and operating companies.

Other examples of this trend are prevalent in the industry as "alliances." This technique was introduced in recent years to better align service providers and operators in addressing specific operational problems. Usually specific to a geographic region and client, it has proven to be an effective technique at optimizing operational efficiencies, and laying the foundation for what we today see in integrated services.