Case Study of a Joint Venture Between Two Drilling Contractors
Authors: Quintero Alan , Hampton Sam 
Published: December 2007

SPE and IADC Members

As the drilling industry becomes more competitive, one way to gain an edge is to combine the differing strengths of separate parties. Although this idea is not new, combining the efforts of two companies that could be considered competitors in some instances presents new challenges and opportunities.

In 1994, a challenging opportunity presented itself to provide a state-of-the-art, mechanized platform rig to operate offshore Australia. The project called for innovations in technical design combined with an in-depth knowledge of the special conditions necessary to work in Australia. To do this, Atwood Oceanics, Inc. and Helmerich & Payne, Inc. combined their separate strengths to provide a superior end product.

This paper will discuss the teamwork approach used in this project beginning with the bidding process and continuing through the fabrication phase. The management responsibilities of the partners will be explained with special attention given to the organization of the two-company construction team. Finally, keys to success in the integration of two corporate cultures will be discussed.

Introduction

In 1994, a major operator in Australia distributed a specification and tender package for the design, construction and operation of a sophisticated platform drilling rig. The new rig, which became known as Rig 200 (Figure 1), incorporates high-technology, semi-automated pipe handling and drilling equipment. Rig 200 presented two major challenges: building a rig with technology that had previously been mostly limited to applications in the North Sea (and for which expertise within the industry was in the infancy stage) in a cost effective manner, and operating this rig in the unique commercial, industrial and operating environment found in Australia.

The Strategy. During the tendering process it became evident that, to gain a competitive advantage, it would be advantageous for Atwood Oceanics, Inc. and Helmerich & Payne, Inc. to join forces.

In that connection, Atwood Oceanics, founded in 1968, brought more than 22 years of operating experience in Australia. Since 1974, Atwood Oceanics has drilled over 75 wells in Australia using a variety of drilling rigs. Of particular significance is the operation of Rig 19, a platform rig presently operating in Rig 200's future operating area. Rig 19 has successfully operated over seven years without a lost time accident and has set numerous drilling records in the area.

Helmerich & Payne was founded over 75 years ago and brings a record of many years of innovation within the drilling industry. Helmerich & Payne owns and operates 11 offshore platform rigs. Many of the creative solutions championed by Helmerich & Payne through the years have been incorporated in the design of Rig 200, including new solutions in mud pump unitization and rig modularization.

To take advantage of the strength of the two companies, a joint proposal was submitted to the operator.

The Bidding Process

The technical and commercial aspects of the bid proposal were developed concurrently as described below.

The Technical Proposal. A joint team was assembled in Helmerich & Payne's, Tulsa, Oklahoma offices to develop the conceptual design used in the Rig 200 proposal. The team assembled was organized as shown in Figure 2.

In a team approach, members of both Helmerich & Payne and Atwood Oceanics literally sat around a table to sketch out general layouts for the rig. Important items were identified early in the process and became keys to a successful rig design. These were:–safety of the operation;–the ergonomics of the rig floor and operability of the mechanized equipment;

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