Drilling decisions made before a rig reaches location make a significant contribution to an oil company's financial success. Of value to the company is not the ability to drill wells, but the ability to plan with confidence in the knowledge of what is possible. In spite of this, operators have tended to over-work day to day decisions about drilling out of proportion to their significance. Recognition of this fact has resulted in the present wave of contracting initiatives. A major challenge for the industry is to achieve the necessary transfer of responsibility without compromising the operator's license to operate. These changes will compel the service sector to develop a new culture of technical integrity and continuous improvement. To operate safely, measure performance and manage drilling risk, the transformation will oblige the service sector to adopt many technologies presently owned by oil companies.


An oil company is an organisation devoted to managing risk. Its core business is the acquisition and exploration of acreage. Its task is then to appraise and develop any prospective structures.

Each link of this chain involves decisions related to drilling. Questions about the logistics in remote areas, the feasibility of year-round drilling in extreme water depths may all influence the ability to identify likely prospects during the exploration phase of a concession - or whether the concession is worth acquiring in the first place.

Decisions about drilling influence many of the choices for a field development scheme. Examples are: the number of platforms, reach of wells, their time and cost, risk exposure to the consequences of a blowout or difficulty of drilling. Drilling knowledge can make a major contribution to the effective management of a field during its development phase. For example: the opportunities for "designer" wells to drain small accumulations, the feasibility of placing a long reach well Into a small fault block or the feasibility of logging, completing or working over a particular well profile. Decision making at this level clearly adds value to the organisation.

The key contribution of drilling knowledge to an oil company's financial success is in formulating plans that lead to an operation taking place. So, while drilling is a core skill for an oil company, it is not the ability to drill wells that matters but the ability to make decisions in the knowledge of what is possible.

Whilst also responding to low oil prices, the industry has implicitly recognised the validity of this viewpoint. The industry is reconstructing the relationship between operators and contractors. The change is necessary and will be beneficial for the business. It is inherent in a successful future for the industry.

The purpose of this paper is to examine some of the issues emerging from this movement. In particular, to explore the ideas of "License to Operate", technical integrity, continuous improvement and the contribution which drilling technology can make to these areas. Finally, it will discuss how competence in both of these areas is an essential prerequisite to the skills needed for integration and risk management.

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