In 1993, Qatar General Petroleum Corporation (QGPC) conducted a comprehensive review of its Offshore drilling operations and cost under the then existing day rate contracts for the three offshore jack-up rigs under hire. The results of the study indicated that substantial cost saving could be achieved through the implementation of integrated footage contracts, such that most of the hole sections are drilled under footage; giving the rig contractor footage incentives to drill vertical and deviated hole sections. Similar "integrated" footage contracts had been successfully employed by QGPC in their onshore operations (vertical wells) for several years.

In August 1994, the first integrated footage contract for Offshore Operations was implemented. Some 25 wells have been drilled and side-tracked under integrated footage contracts since. Following the success of the first footage contract, two subsequent additional jack-up rig contracts were awarded on a similar contract strategy.

The paper focuses mainly on the differences in rig charges, intangible drilling cost and overall drilling performance under the integrated and day work contracts, as most of the tangible cost have remained relatively constant.

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