Active Vocabulary

Date: 2015-10-07; view: 532.

Unit 3. Companies Involved in Drilling Work

C. Discussion

Topics:

1. People involved in drilling and their duties.

2. The contracting strategies for drilling a well.

3. Your duties when taking summer internships.

Drilling is complex; so complex that no single company is diverse enough to perform all the required work. Consequently, many companies and individuals are involved. Companies include operating companies, drilling contractors, and service and supply companies.

Operating Companies

An operating company, or an operator, is usually an oil company whose primary business is working with oil and gas, or petroleum. An operating company may be an independent or a major. An independent company may be one or two individuals or it may have hundreds of employees. Major companies, such as ExxonMobil, BP Amoco, or Shell, may have thousands of employees. Besides size, another difference between an independent and a major is that, in general, an independent only produces and sells crude oil and natural gas. A major, on the other hand, produces crude oil and natural gas, transports them from the field to a refinery or a plant, refines or processes the oil and gas, and sells the products to consumers.

Whether independent or major, an operator must acquire the right to drill for and produce petroleum at a particular site. An operating company does not usually own the land or the minerals lying under the land. It therefore has to buy or lease the rights to drill for and produce oil and gas from the landowner and the mineral holder. Individuals, partnerships, corporations, or a federal state, or local government can own land and mineral rights. The operator not only pays the landowner a fee for leasing, it also pays the mineral holder a royalty, which is a share of the money made from the sale of oil or gas.

Drilling Contractors

Drilling is a unique undertaking that requires experienced personnel and special equipment. Most operating companies therefore find it more cost effective to hire expertise and equipment from drilling companies than to keep the personnel and equipment under their own roof. So, almost everywhere in the world, drilling contractors do the drilling.

A drilling contractor is an individual or a company that owns from one to dozens of drilling rigs. The contractor hires out a rig and the personnel needed to run it to any operator who wishes to pay to have a well drilled. Some contractors are land contractors – they operate only land rigs. Others are offshore contractors – they operate only offshore rigs. A few contractors operate rigs that drill both on land and offshore. The contractor may have different sizes of rigs that can drill to various depths. A drilling contracting company may be small or large; it may own rigs that drill mainly in a local area or it may have rigs working all over the world.

Regardless of its size, a drilling company's job is to drill holes. It must drill holes to the depth and specifications set by the operating company, who is also the well owner. An operating company usually invites several contractors to bid on a job. Sometimes a good work record may override a low bid.

Service and Supply Companies

The operating company owns the well and usually hires a drilling contractor to drill it. But to successfully drill a well, the operator and the contractor need equipment, supplies, and services that neither company normally keeps on hand. So, service and supply companies provide the required tools and services to expedite the drilling of the well. Supply companies sell expendable and nonexpendable equipment and material to the operator and the drilling contractor. Expendable items include drill bits, fuel, lubricants, and drilling mud – items that are used up or worn out as the well is drilled. Nonexpendable items include drill pipe, fire extinguishers, and equipment that may eventually wear out and have to be replaced but normally last a long time. Likewise, supply companies market safety equipment, rig components, tools, computers, paint, grease, rags, and solvents.

Service companies offer special support to the drilling operation. For example, a mud logging company monitors and records, or logs, the content of the drilling mud as it returns from the well. The returning mud carries cuttings and any formation fluids, such as oil or gas, to the surface. The operator can gain knowledge about the formations being drilled by analyzing the returning drilling fluid.

In many instances, when a well reaches a formation of interest (usually, a formation that may contain oil and gas), the operator hires a well logging company. A logging crew runs sophisticated instruments into the hole. These instruments sense and record formation properties. Computers in the field generate special graphs, called “well logs”, for the operator to examine. Well logs help the operating company determine whether the well will produce oil or gas.

Another service company provides casing crews. A casing crew runs special pipe, casing, into the well to line, or case, it after the rig drills a portion of the hole. Casing protects formations from contamination and stabilizes the well. After the casing crew runs the casing, another service company – a cementing company – cements the casing in the well. Cement bonds the casing to the hole.

Most offshore rigs, and land rigs in very remote fields, require cooking and housekeeping services, since personnel live as well as work offshore or in isolated regions for long periods. The drilling contractor or operating company often hires an oilfield caterer to furnish these services.