Pipe-Racking Systems: Are They Cost Efficient?
Authors: Jacques M.E. , Horst N.W. 
Published: December 2007

Summary
The development of pipe-racking equipment on offshore rigs is reviewed. A method is developed to evaluate the economic return on investment. Using an available industry-computer program, a typical well profile is selected and a sample analysis is conducted to illustrate the process. For most large offshore drilling operations, payback may be expected in about a year.

Introduction
It is generally accepted that the first floating vessel completely dedicated to offshore drilling in areas not accessible to bottom-supported rigs was the drillship CUSS-1 owned by a consortium of Continental Oil Co., Union Oil of California, Shell Oil Co., and Superior Oil Co.1 In 1956, this rig was equipped with the first practical mechanized pipe-handling system. Since then the mobile rig fleet reached nearly 1,000 vessels and more than 100 racking systems have been built and installed. The industry learned that racking systems were usually good to have, but were expensive to acquire and to own. They were bought for a variety of reasons, all of which were claimed to be economic. Yet today there are virtually no performance data and no known analyses that can tell owners whether their decisions were good or if future investment should be made in this type of equipment.
This paper suggests a method of analysis that permits the evaluator to use his own experience of operational cost and performance factors. An existing computer program, designed to evaluate well drilling costs, illustrates the method, and a sample analysis is carried out. Although the model example shows a very attractive investment payback of about 1 year, the figures are much less important than the methodology and the experience-based costs that the reader will use in his own analysis. All cost and performance factors are arguable. The purpose of this paper is to expose the relevant factors and let the reader judge how significant they are to his own situation.
It is helpful to look first at the history of racking systems, their development and performance, their usage in today's rig fleet, the variety of available racking machines, and some considerations in their selection.

Historical Perspective
In 1956, CUSS-1 was equipped with the first practical mechanized handling system, which was a horizontal lay-down system, handling stands in racks on the aft pipe deck. A mechanized pipe ramp transported the stand to well center, where it was picked up by the elevators. Meanwhile, parallel development had resulted in a vertical system that would handle stands within the derrick in a more traditional manner. A working prototype was installed on Humble Oil Rig No. 30 in the late 1940's and successfully drilled more than 75,000 ft.2
Nearly 20 years passed before any type of fully mechanized system allowing handsoff tripping was commercially worthwhile. During this time, the only type of tripping assists were various designs of rig-floor manipulator arms used primarily for pushing and guiding heavy pipes around the drill floor.
The evolution of mechanized pipe racking began in earnest in 1968 when The Offshore Co. installed a vertical pipe-racking system on one of its turret-moored Discoverer drillships.3 The basic motivation was to eliminate the difficulty of manual pipe handling caused by vessel motion. The success of this equipment led to many other drillships being fitted with similar machinery, including several horizontal systems similar to the CUSS-1.
In 1973, the Norwegian rig Smedvig West Venture became the first semisubmersible to be outfitted with a fully mechanized racking system.4 However, in this case, the rationale for installation differed from that of drillships. For this heavy semisubmersible built for drilling in the Norwegian North Sea, equipment was justified on the basis of offsetting the effects of high winds and cold temperature, not vessel motion. This too was successful and was followed by a number of North Sea class rigs being similarly outfitted.
It was not until 1980 that different designs of vertical rackers offered alternatives in vendors and operation. This was prompted by a third factor: national regulations, primarily Norwegian. These regulations stipulated that rigs working in their jurisdictional waters would be equipped with a fully mechanized pipe-racking system, power slips, and mechanized means for making, breaking, and spinning tool joint connections for reasons of personnel safety. The various arrangements of systems also produced a fourth tangible benefit, trip-time savings.