Maximizing drilling effectiveness
Many executives and specialists working in the oil and gas industry are convinced that the amount of time you need to drill a well is defined by the technology used, and the level of experience of the people working with this technology. However, many companies spend hundreds of millions of dollars on technology without ever maximizing the value from the investment. According to David Smith, director of Oil Sector, Celerant Consulting, “In order to achieve this we believe that the sophistication of the technology and the experience of people have to be aligned with a coherent process and managed in a systematic way.”
He continued to say that more enlightened companies have realized that future cost and production gains are just as likely to come from people and process change as from “technology silver bullets.” Other companies need to follow this lead and invest as much in the process and management involved in well design and drilling programs as they do on cutting edge technology.
It must be stressed that even when companies have the right people skilled to use the most appropriate technology, translating this into major improvement in long-established drilling practices is still extremely difficult.
Companies tend to focus on action, gut feeling and fixing problems as they occur rather than taking a long-term view. Taking this approach causes problems from the start. The usual rationale offered is “every well is different so trying to plan for every eventuality or using data and experience from other wells is only useful to a point, there is no substitute for getting on with it.”
Producing an optimal well design and drilling program is a long and complex process, involving a wide range of people with different specializations and priorities. It needs to be managed with a similar level of attention and accuracy as drilling the well itself. Poor planning can escalate cost enormously and the root causes can be difficult to pin point.
Most drilling managers will proudly state that they have a well-established planning process, both for preparing the drilling schedule and for the planning of individual wells. The trouble is that in reality this planning process is seldom followed because insufficient focus is placed on planning. People who are supposed to be involved in the process early on are only involved in the later stages, or not involved at all. Deadlines are altered and excused; changes and additions are introduced at the last moment.
First step
“The first step is to review the existing optimal planning process. How does reality compare to company perceptions? Is the best possible process really in place? Compare it against industry best practice and check that it is indeed being fully adopted on the ground,” says David.
He continued to say that you must balance need and reality in the short-term with what would be optimal in the longer term. The best course of action is to take a parallel approach. In other words, buy time to develop by achieving some quick improvements in the existing planning process and set a target to test a longer term approach. Short-term improvements may be achieved by enforcing the existing planning process more rigorously or by focusing on specific problem areas, e.g. roles and responsibilities. For the longer term optimal solution, draw a very detailed end-to-end process flow.
Most oil companies use established oil well planning processes. The challenge is to ensure that the process is managed using appropriate control and that tensions between different departments are recognized and resolved.
“Those with the key skills and those with the power to change policy need to become your evangelists and supporters for change,” says David. “Only by involving both parties can you achieve an effective and sanctioned balance between pragmatism and perfection. The 100% solution is useless if it never gets implemented and adopted, and it is better to succeed with 80%.”
Good management practice
Managing is a real skill that must be taught and practiced. In David’s view, the measure of management quality is an organization’s ability to make good decisions. This starts from the ability of managers’ to define the set of measures they want to look at, how often they review them and who they review them with in order to make decisions.
“An important managerial skill is the ability to refrain from reviewing information you don’t need,” says David. All too often drilling managers want to see detailed information on what is actually happening on their rigs. This has positive aspects, but it can also limit the independence of subordinate engineers and supervisors, and confuses their responsibilities
David says, “Managers should look into the flows of information within their organization: How structured is it? Do people gain insight from the data that enables them to make good decisions? Is the data validated and reviewed by the people best placed to test its validity, as opposed to those who may be ultimately responsible but who may be situated far away from the source of the data?”
He continued to say that well managed organizations have clearly defined roles and responsibilities for each position. Not just a manual of job descriptions or nice charts on the wall, but real understanding amongst employees of where their responsibilities lie. A simple test is to ask a dozen people in different positions, “Who in our organization is responsible for what?” See how many different answers you get.
According to David, “Successful decision making requires four main conditions: people with the right knowledge and experience, people with the right attitude, clear divisions of authority, and a system to provide the required information to the people who need it.”
He continued to say that most breakthrough performance is achieved not through technology, but through changes in mindset or, in other words, through behavioral changes. These behavioral changes are achievable through a focused and determined organizational improvement campaign centered on the importance of improved planning, management and leadership development across the organization.
Of course, if you want to be successful in drilling you need to be on top of modern technological achievements. But that’s not enough. Any organization can hire the same suppliers as you. Real breakthrough in drilling can be achieved only through people and process change. The safety strategies of all major operating companies show fantastic results through commitment to such change. Imagine what could be achieved if a comparable amount of attention was focused on drilling performance.•
