One of the major challenges facing drilling operations engineering and management today is the prevention of costs and schedule overruns. The nature of drilling operations with the diversity of parties involved in the different tasks from well conception up to the completion, the more and more sophisticated technology used, the pressure of time, the increasing regulatory of safety and environment requirements, the inflating costs in addition to the big uncertainty of this activity make difficult meeting the financial and timing targets set for the premeditated financial resource allocation.
The first objective of this paper is to provide the drilling manager with an efficient cost management and control tool that facilitates the management of the expenditures, and enables to take informed decision and corrective actions on the right time, by providing better understanding and awareness of the actual exposure to the cost overrun risks.
Cost control techniques can be adapted to the well construction process by using the information gathered from the offset wells to mitigate the effect of the uncertainty of nature. Many studies have been made on this issue; they can be classified into deterministic and probabilistic approaches. For the latest, little work has been carried out and it is still not widely and comprehensively used in practice in spite of its powerfulness.
The methodology used in this study consists, firstly, of analyzing data from offset wells to simulate and reproduce real life scenarios of possible cost outcomes based on Monte Carlo simulation combined with risk analysis to be applied in the planning phase of new wells, and secondly, of applying a real time control and continuous improvement processes in the execution phase. This paper illustrates the case study of Hassi-Messaoud oilfield in Algeria. This type of model facilitates the management tasks and save time and efforts, particularly when dealing with intensive drilling operations in major fields.