A Drilling Contractor's Approach to New and Emerging Technological Innovations in the E & P Industry
Authors: Karmous Kal , Wilson Peter , Davidson Colin , Simpson Mike , Springett Charlie , Donald Gordon 
Published: December 2007

This paper describes the philosophy and methodology used by a Drilling Contractor to systematically evaluate the potential impact of innovative technologies emerging in today's market place. The range of innovative technologies evaluated extend from equipment and processes that can impact drilling productivity, to innovations that can impact the traditional business models in the various service segments of the Exploration and Production, E&P, industry.

The desire to reduce field development costs, improve field recovery, and improve field economics has fuelled the acceleration of the E&P Industry's introduction of innovative technologies into the market place. The sheer breadth and depth of these new and emerging technologies require a systematic approach to evaluate the potential impact on a Drilling Contractor's existing equipment and service arrangements. The evaluation process must consider the value-added opportunity that any specific innovation may bring to the industry as well as any potential threat it may pose to the contractor's existing service. Innovative technologies with applications and influences on both down hole and/or on drilling facilities need to be carefully examined by the Drilling Contractor, so that informed decisions can be made with respect to the incorporation of technology into the contractor's future plans.

Effective investigation requires a dedicated technology resource. The investigation should tap into specific expertise within the greater organisation. Value engineering is an important component of the investigation. Value engineering has been around since 1961 when the term "value" was synonymous with reduced costs. Today an effective value analysis includes quality as an important component of the cost / benefit equation used to evaluate innovative technologies. An innovative technology can be defined as a new process or component that aims to provide better value by taking existing technology or tools to a higher level of "quality performance". "Quality Performance" is defined as superior performance based on quality principles. Innovative technologies can be as simple as a new tubular connection type or as large and complex as a new hull design for a deep water semi-submersible.

The areas that should be considered when completing a Value Analysis of a new technology include: Performance advancement (productivity)Cost reductionRisk reduction in SafetyPersonnel HealthEnvironmentExisting business processesPersonnel skill set requirements

The use and adaptation of new technology can influence changes in the traditional working boundaries within the E&P service sector. Drilling Contractors today are faced with the possibility that an innovative technology may threaten a current or future market share of their core business. Alternatively, an innovative technology may represent an opportunity to expand into a new business area or to improve an existing one. The systematic evaluation of all innovations as they are proposed should be an essential part of the successful Drilling Contractor's business. This paper suggests one way to grade each innovative technology based on a matrix composed of severity of the technology effect verses the probability of its development. A structured process analyses and monitors innovative technologies to ensure that the Contractor's ultimate business interests and the need for optimized deliverability in the overall E&P industry are aligned.