Epiroc drills down in the face of oil and gas volatility

Against the backdrop of an oil and gas industry craving low cost and high-volume drill rigs, Epiroc has unleashed its DH350.

Volatility is an all-too-familiar part of the oil and gas industry that has required the development of equipment that protects companies against changing market conditions.

Last month alone showed why the industry has earned a reputation for volatility due to its unpredictable nature.

Oil prices spiked suddenly in mid-September after drone and missile attacks hit oil facilities in Saudi Arabia, triggering a major disruption in global supply of the resource.

While prices have settled in the weeks since, fears of repeated attacks in Saudi Arabia – the world’s second largest producing country of oil – have the industry ready for further short-term fluctuations.

The Saudi Arabia incident is, however, just the latest episode of volatility in the oil and gas industry, which has been an unpredictable environment for much of the past decade.

As PwC’s 2019 Oil and Gas trends report explains, “A combination of erratic and sometimes inscrutable commodity price fluctuations, ambiguity about the future of fossil fuels and increasingly contentious trade negotiations around the world are upending traditional supply and demand fundamentals.”

Oil and gas companies and their suppliers have responded to these market conditions by identifying ways to protect operations from volatility.

In February 2016, for example, the industry faced a challenging situation as oil prices dropped to record lows after a surge in global production caused supply to considerably outpace demand

Between 2014 and 2016 the oil and gas landscape dramatically transformed as changes in exploration practices unlocked vast volumes of oil, according to Matthew Buttacavoli, engineering/product line manager – deep hole drilling rigs at Epiroc.

Buttacavoli says the industry’s response was to identify new ways to drive down operational costs, while maintaining production levels – logic that would lead to improving profit margins.

For original equipment manufacturers (OEMs), the changing marketplace increased demand for low cost and high-volume equipment.

OEMs focussed on designing drill rigs with autonomous capabilities, improved mobility and reduced footprint as ways to meet the evolving demands.

The changing strategies served as inspiration for Epiroc’s DH350 drilling rig, a project that has this year come to fruition.

The drill rig is tech advanced and setup for automation.

Epiroc’s rig is the culmination of years of market analysis, innovation and hard work, according to Buttacavoli.

“When we started the project to develop a new rig, we looked at the market at the time, this was 2014 and so we started right before the oil prices dipped significantly,” Buttacavoli tells Oil & Gas Industry News.

“We looked at what was happening in the market in terms of depth of drilling and making a really mobile drill rig to make projects more efficient.”

Epiroc’s aim for the DH350 was to simplify drilling activities by removing the amount of human contact necessary during operations, while also developing a rig that is mobile in terms of transportation and assembly.

Previously, rigs often required more than 40 loads, as well as cranes to fully assemble. However, the DH350’s mast, substructure and pipe handling systems allow for ‘rig-up’ without the use of cranes while minimising the number of hands on operations.

The removal of lighting and handrails means the rig’s design offers a single-piece substructure that further reduces the number of loads required to transport to a desired location.

Building on this, the telescoping mast is transported as a complete assembly on a purpose-built trailer that is provided by Epiroc, incorporating an on-board hydraulic power unit used to transition the mast from the transport trailer to the substructure during rig-up.

The growing demand for mobility coincides with an increasing trend towards multi-well pads, which has oil and gas companies craving equipment that has reduced component size which does not affect operational capability.

DH350’s hydraulic power unit is placed across its substructure unlike conventional rigs that use prime-movers.

This placement eliminates the need to feed power cables, hydraulic lines and other material, reducing the overall footprint of the rig’s design.

With increased pressure on oil and gas companies to provide safe operations, Epiroc focussed on how to remove operators from engaging in hazardous activity.

“The DH350 has safety features that reduce operator contact while also keeping them interested,” Buttacavoli says.

“We have studied the market carefully about what oil and gas companies want and a safe and mobile rig was at the top of their priority list.”

Indeed, the development of a hands-free pipe handling system maximises crew member safety.

This coincides with the integration of a hydraulically-actuated iron roughneck, power slips, and the presentation of pipe to the work floor ultimately reduces physical interaction between crew members and the rig, making it inherently safer.

An attractive feature of the DH350, given the current age of innovation, is its potential for future automation, offering the improvement in terms of safety and operational efficiencies.

Epiroc’s DH350 drill rig.

Using a combination of integrated positioning sensors, hydraulic controls and simplified human machine interface (HMI) on the DH350 platform, the opportunity for streamlined automation of rig operation arises.

A phased implementation of a computer-controlled drilling system would allow the driller to monitor the drilling system’s performance rather than control it, giving the driller the opportunity to focus on efficiency rather than the physical task itself.

Epiroc’s latest release comes as oil and gas companies are increasingly exploring the unchartered depths of both on and offshore wells.

“We looked at the depths being drilled and decided we would target 15,000 feet,” Buttacavoli explains. “If we did this, we figured we would capture 60-65 per cent of wells being drilled at the time, it was the sweet spot.”

The culmination of Epiroc’s journey to release the DH350 to the market has paved the way for a design that has been streamlined to maximise rig mobility, reduce spatial footprint on location and maximise crew safety.

While its features have been motivated by the latest market trends, the logical progression in future development is the implementation of fully hands-free automation throughout all stages of the drilling process.

It marks a dynamic period as companies within the industry look to capitalise on new innovation and technology available that allows them to explore greater depths at reduced costs.

Buttacavoli presented the DH350’s capabilities at the Australian Drilling Industry Association’s D RILL 2019 conference in Darwin in September, with focus on the application of automation in mobile oil and gas drilling rigs.

Epiroc will support the rig in Australia with its national service coverage, which includes two thirds of staff involved in service across 17 Australian branches. The OEM offers factory-trained technicians and access to global networks for troubleshooting and urgent parts delivery.

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