Significance of Well Construction; Operational Efficiency in Remote Areas - Tullow Kenya's Remarkable Cost Reduction Journey
Authors: Peytchev Peter , Mawuli Elike , Reddaway Alexandra , Namuganyi Susan , Shahid Feroze , Sawyer Graham , Meempat Balu 
Published: January 2016

With only six wells drilled prior to Tullow Oil's entry into Kenya, limited knowledge of the subsurface geology and high uncertainties in geological properties presented an immense challenge to drilling operations in the country's remote rift basins. The associated mobilization and operational costs in a region lacking an established oil industry or related infrastructure resulted in ~$55MM onshore wells. Tullow Oil now operates five exploration blocks, all in and around the East African Rift System (EARS). Prior to the agreement, the blocks were held by Africa Oil with minor interests held by Lion Energy and Afren. The farm in agreement apportioned 50% equity to Tullow Oil in all the exploration Blocks and 50% equity to Africa Oil Corporation (AOC) in Blocks 10BB, 10BA, 13T and 12A. Block 10A has since been relinquished and Block 12B acquired with 50% equity. Tullow Oil is the nominated operator in all the other blocks.

In the Lake Albert Basins in Uganda, oil has been discovered in geological settings which are similar to geological settings in the Turkana Basins in Kenya, and particularly similar to those found at Ngamia-1/1A and at Loperot-1, the first well to be drilled in the Lokichar Basin, Kenya (1992). The geographical location and crust thickness provides a perfect potential petroleum system. The geological drilling hazards are not currently well understood due to the sparseness of drilling which has been undertaken and the compartmentalisation of the structure.

By approaching efficiency improvement from both a material and an operational performance aspect, the final cost of the wells drilled in Kenya and the time taken to drill and suspend them has impressively reduced. The cost per well has reduced to a quarter of the cost of early exploration and the comparative days per well time between early and current wells by 70%.

This paper outlines the journey and the challenges faced by Tullow Oil and documents the subsequent success of the step changes in design and operation in Kenya from exploration to appraisal in recent history. The paper shows the adoption of the slim well design, application of selected innovative technologies and specific enhancement of drilling practices, the philosophies of which have had a tremendous impact on the reduction on well operational costs, with increased drilling efficiency in smaller wellbore sizes and reduced major well material volumes of mud, cement and waste. Most importantly, this technical limit approach has not compromised the environment, health and safety (EHS) performance of the company. The paper additionally highlights the contribution of optimized bit selection, fewer section bit runs and elimination of pilot hole drilling offset by the availability of high resolution seismic data for shallow hazard evaluation. Other key areas discussed are mud weight strategies to mitigate hole instability, reduced rig mobilization duration between wells and maximization of offline activities for flat time reduction.