Six or seven years ago, only 10% of oil rigs in the United States were used to drill horizontal wellbores. Now, more than 60% of oil and gas projects require horizontal drilling. Why? The U.S. oil and gas industry is trending towards shale and other unconventional resources – and wells reaching these resources are drilled horizontally once the proper geological layer is reached (shown in the image below). Horizontal drilling is used in all of the major shale plays.
The discovery of shale oil has created a fundamental shift in the United States oil and gas industry. This shift has transformed the current U.S. onshore rig fleet. Rigs are being built with higher horsepower to break through shale, and more crude oil rigs are in use than natural gas rigs (shown in the chart below).
In this blog post, we will discuss the new technology prevalent in rigs built for shale oil drilling.
New Rig Technology
The type of rig that dominated land drilling just a few years ago is relinquishing its role in favor of larger, higher-tech designs with more horsepower. These new rigs typically allow a 2-3 man team to do the work of a 7-8 man crew on the older models. Many rig contractors are in the process of upgrading their fleet.
The new fleet of rigs is being equipped with the following:
- Rotary steerable systems (RSS), which incorporate measurement-while-drilling programming that gives data to operators standing on the surface and allows them to steer the drill below.
- Alternating current rig power systems, which give the rigs better top-drive motor speed and enhanced torque.
- Rig automation – although fully automated rigs are not widely in use, automating specific processes is becoming commonplace. Proponents of automation say that these rigs will deliver shorter drilling times and lower well costs.
- Multi-well pad drilling capabilities include drilling, completing, and producing up to 12 horizontal wells from one drilling page using the new rigs. This practice reduces costs through shared expense for construction, equipment, and facilities. It also reduces the environmental footprint of drilling.
- Rig “walking” capability is the ability to move a rig from one wellbore to the next. This practice can save 2 days of tearing down and reconstructing a rig.
Horizontal Drilling Creates Demand for Higher Horsepower
In addition to featuring the latest technology, the newest rigs are typically much more powerful. For years, 600-750 horsepower rigs were the benchmark for conventional, vertical wells. However, shale wells require rigs of a higher horsepower to break through the shale. Now that the majority of onshore drilling operations utilize horizontal drilling, the majority of rigs are being built in the 1,000-1,499 and 1,500-1,999 horsepower classes. Rigs in these classes account for 60-65% of rig fleet and for almost 90% of newly built rigs.
Some of the smaller rigs are still being used in drilling – both in conventional projects and to drill the initial, vertical section of a hole before bringing in a larger rig for the horizontal drilling. This practice has resulted in savings of $50,000 to $100,000 per well. Still, there is now a surplus in the number of smaller rigs and in the fourth quarter of 2011, three large drilling contractors announced retirement of a total of 157 rigs of this size.
Refer to the image below for more details on horizontal drilling and hydraulic fracturing.
The Future of Drilling Rigs
Only the most efficient and up-to-date rigs will be able to be used in the near future as technology continues to reflect the new trend in shale play drilling. Most new onshore rigs will be equipped with the best technology and a higher horsepower than rigs in the past.
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