Oilfield services companies operating in North America have no plans to scale back research and development (R&D) into their ever-better software and hardware offerings, and some are eyeing 3D printing as an option for the future.
The ability to capture onshore resources through horizontal drilling and hydraulic fracturing continues to evolve onshore and is expanding into the offshore. In addition, the trend to ultra deepwater and the Arctic in search of more elusive hydrocarbons has kept R&D departments one of the big drivers for revenue. It's not revolving around only stimulations and wellbores.
Earlier this month General Electric's (GE) oil and gas division announced plans to invest in 3D printed metal fuel nozzles for natural gas turbines. 3D printing techniques allow complex shapes to be created layer by layer without screws or bolts, which allows more precise designs.
For instance, at a GE Oil & Gas pipeline inspection plant in Newcastle, England, monitoring robots (pigs) already are being designed by 3D printing, resulting in completions in 12 hours versus 12 weeks. Most of custom-designed pigs, used offshore and onshore, are about four-five inches in diameter and an inch or two in height, said Chief Technology Officer Eric Gebhardt. "It's the right size to put into some of the additive manufacturing."
GE researchers also are working on ways to use the technology for electric submersible pumps for the oil and gas industry. Full production of 3D fuel nozzles, if they achieve certification, isn't expected for at least a year, said GE Oil and Gas executive Lorenzo Lorenzi. However, the need to develop new materials "is pretty high. We need new grades of nickel-based materials and high-temperature resistant materials."
It may take at least two or three years to achieve higher throughput on some of the oil and gas parts and more than five years "to go past one-off manufacturing," he added.
Hal Printing Out Drilling Parts
Halliburton Co., the top oilfield services provider in North America, has been testing 3D printing technology on a smaller scale to produce drilling parts. In every case, R&D is focused on improving drilling techniques and reducing costs, executives said recently.
In the United States, advanced onshore technology means a continued investment in upgrading multi-well pad options because pad drilling accounts for more than half of Halliburton's domestic activity, said COO Jeff Miller.
The Houston provider has a long list of drilling offerings, including Frac of the Future and Battle Red. Cypher, a seismic-to-stimulation service, launched late last year and today more than two dozen programs are in place, with production improving on average by 20%, Miller said.
In one pilot program, Halliburton tested the service on underperforming wells in the Barnett Shale. "The first step was to build an earth model from existing seismic, log and core data, as well as production results," said Miller. "This phase identified a number of sweet spots, including several that have been bypassed in the initial well placement...
"By understanding where to drill and where to land the wells, the second phase yielded over a 50% uplift, and estimated ultimate recovery per well, or EUR, and the average Cypher well produced at a level beyond the best pre-existing wells." By the end of the third phase, Cypher "had more than doubled the average EUR per well..."
Competitor Schlumberger Ltd., the No. 1 global provider, spends the bulk of its R&D investments in North America "because this is where I think technology will have a significant impact in terms of how the market is going to be shaped going forward," said CEO Paal Kibsgaard. What they sell in North America will sell overseas.
Among other things, Schlumberger is field testing a fracturing diversion that may be used in new and existing wells. In "high-precision fracturing," Schlumberger engineers cross-addressed each cluster and finished jobs using advanced fluid coupling. Results to date have been remarkable, said the CEO.
BH’s "Important, Young Technologies"
North American operator Baker Hughes Inc., the No. 3 oilfield services provider, commercially launched 129 products and services in 2013, "important, young technologies," said CEO Martin Craighead. He highlighted an AutoTrak Curve rotary steerable drilling service, Talon PDC drillbits and the FracPoint systems, all now used in North American shale plays.
Baker last year pumped up its R&D investments to focus on emerging technology, also with an eye to North America, which has "strong potential to accelerate earnings," particularly in the onshore, said the CEO.
"Innovation, entrepreneurialism and experimentation are some of the hallmarks of the North American shale revolution, and it created a rich set of service options," said Craighead. "Optimizing production from shale is not a one-size-fits-all operation. It requires a portfolio of capabilities to provide basin-specific and well-specific customization. We believe our customer community within the unconventional plays will increasingly require products and services that not only drive efficiency, but more important, enable them to improve initial production rates and their EURs per well."
Many North American customers continue to use traditional plug and perforation (perf) completions, "the same method used to complete some of the early shale wells. And yet, this is a method that hasn't evolved much since the beginning of the shale revolution."
So last year Baker assembled a team of completion experts, many of whom had helped develop some of its earlier innovations. The collaboration resulted in new plug and perf technology, Shadow Plug, which now is being launched.
The large-bore isolation device was developed for Baker's proprietary FracPoint System, a nanotechnology suite. The plug is set, the well perforated and then the well is isolated. "Once the well stimulation is complete, the ball disintegrates away, leaving behind a large flow-through [initial drill] ready for production and eliminating the need to mill out the plugs," said Craighead.
Extending Laterals, Reducing Time, Cost
"From a customer perspective, this technology provides a number of advantages, such as the elimination of costly milling time, reduced cost and time phase to complete a well and the ability to reach longer laterals beyond the current limitations of coiled-tubing. And all of these advantages allow our customers to bring their well on production even sooner."
Field testing of Shadow Plug with select customers has been ongoing for several months. Based on early results, the commercial launch, originally scheduled for later this year, was accelerated to the first quarter. Also newly launched is ProductionWave, a family of services tailored to boost production and reduce lifting costs in artificial wells.
"In the first six months since launch, sales have been very strong with installations in every major U.S. basin," Craighead said of ProductionWave. "Of these new installations, more than half were installed on wells where rod lifts have previously been the only artificial lift system available."
The new technologies often are an overlooked part of revenue growth, Craighead noted. Innovations not only help the producers using them, but for oilfield service operators, they provide price advantages because technology, often proprietary, can be packaged together. Operators that offer a suite of software and technology solutions tend to have more leverage in pricing and better contracting with customers. Nobody wants to use a single-point solution. They want an end solution.
Now that the service providers have finessed drilling techniques enough that fewer rigs result in more production, the focus today is on completions innovations.
Technology advantages allow operators to "disconnect from the rig count a bit," said Craighead. Baker's Shadow Plug, for instance, "sells at a premium and that premium is being tested upwards, not downwards, because of the value that it's providing. So the biases on revenue, to me, are all going in the right direction: to the right."