Sunday, May 15, 2011

Drilling Contractor expectations & Equipment onboard

Common Specificatlona in Drilling Contract to an offshore drilling operator, usually a day rate for a jackup is around US$100K region and may be higher if the rig is working in north sea where the rig design is of higher specification :-
1) Depth in feet
2) Commencement date
3) Formations to be penetrated
4) Hole size
5) Casing sizes to designated depths
6) Drilling mud properties
7) Logging program
8) Cementing program
9) Type of testing
10) Well completion program
11) Size, weight and grade of drill collars
12) Hole deviation restrictions

A) More emphasis should be placed on the rate of hole angle change than on the maximum hole angle.

Types of Drilling Contracts

1) Turnkey Drilling Contract
A) It requires the Operator to pay a stipulated amount to the Drilling Contractor upon meeting contract specifications.
B) The Drilling Contractor:
-provides all of the labor.
-furnishes most of the material (contract specific).
-controls the entire drilling operation independent of any supervision by the Operator.

C) Provisions Common to Most Turnkey Contracts
-Location of well
-Commencement date
-Adequate location
-Conductor pipe, should be arranged for and set by the Drilling Contractor
-Contract depth, given as depth to which the Drilling Contractor should drill
-Hole sizes, includes the surface hole

1. includes these items usually fumished by the DrillingContractor
-Fuel, ration, etc
-Surface pipe, and Intermediate pipe if required, clearly defined size, weight and grade
- API or non-API
- 3rd party testing equipment, logging unit, etc
-new, or if used, tested to (# ) psi
-cement (with additives)
-cement services
-maximum number of hours to wait before nippling-up (i.e. - set slips, cut off casing, etc.) operations are started
-Mud and chemicals
a. according to a mud program included in the contract
b. Specify who owns the mud at contract depth.

-Log type and Service Company
-All mobilization charges
a. move in
b. rigup
c. rigdown
d. move out

-Drilling the rat hole and mouse hole
-Cost of well control insurance
a. certificate
b) Straight hole specifications (e.g.)

-Unit to hole deviation per 500 feet, usually 3 degrees or less ?

- How frequently the DrillingContractor should survey the hole deviation
A. at least every 1000 feet ??

~ Clearly define when Daywork begins and ends (e.g.).
Daywork begins when:
A. a readable log is furnished to the Operator.
B. drilling reaches a certain depth.
C. drilling reaches a certain zone by cuttings, etc..
D. special operations such as drill stem testing and coring are done.

2. Daywork ends when:
A. blow-out preventers (BOPs) are nippled-down.
B. the tanks are cleaned.
C. the drill pipe is laid down.

A clearly defined deadline as to when payment is due :

1. This is normally handled through an escrow account at a bank that both the Operator and the drillingContractor agree to use.
A. a three-way agreement with the bank

2. The total Turnkey cost is held in an interest-bearing account.
A. The Operator receives the interest money.

3. All parties concerned sign a letter which spells out:
- the release of the contents of the account.
- other provisions of the terms of the agreement.

The Drilling Contractor is usually required to furnish evidence that all third-party bills are paid in full.

Below slides showing some of the machinery equipment inside the drilling rig  ( p/s : move your mouse to the photo, to see the title of each photo

The rig crew has to carry out their maintenance of machineries,etc and there will be periodic or yearly classification renewal inspections required onboard, eg. testing of safety, fire fighting equipment, lifting appliances, padeyes,etc and renewal of classification certificate will be given.

Class of the rig will be suspended and the Certificate of Classification will become invalid in any of the following circumstances:

i) if recommendations issued by the classification surveyor are not carried out by their due dates and no extension has been granted,
ii) if Continuous Survey items which are due or overdue at the time of Annual Survey are not completed and no extension has been granted,
iii) if the other surveys required for maintenance of class, other than Annual, Intermediate or Special Surveys, are not carried out by the due date and no Rule allowed extension has been granted, or
iv) if any damage, failure, deterioration, or repair has not been completed as recommended.

Class is automatically suspended and the Certificate of Classification is invalid in any of the following circumstances:

i) if the Annual Survey is not completed by the date which is three (3) months after the due date,
ii) if the Intermediate Survey is not completed by the date which is three (3) months after the due date of the third Annual Survey of the five (5) year periodic survey cycle, or
iii) if the Special Survey is not completed by the due date, unless the vessel is under attendance for completion prior to resuming trading. Under exceptional circumstances, consideration may be given for an extension of the Special Survey, provided the vessel is attended and the attending Surveyor so recommends; such an extension shall not exceed three (3) months. More information may be referred to the rule book of any of the classification society or clarification with the society surveyor, if need to.

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