Chevron’s McHugh: Industry needs better awareness of MPD benefits before it can become a go-to solution

By Kelli Ainsworth, Editorial Coordinator

As the drilling industry moves into deeper waters and increasingly challenging pressure regimes, finding ways to make wells more economic is crucial, said Kimberly McHugh, General Manager of Drilling and Completions at Chevron. “We have to find ways to improve the costs of our wells through reduced cycle time and design. MPD does that for us,” she said in a presentation at the 2016 SPE/IADC Managed Pressure Drilling and Underbalanced Operations Conference in Galveston, Texas, on 12 April. Although the benefits of MPD are well known ­– from earlier kick and loss detection to reducing NPT to allowing operators to “drill the undrillable” – more work is needed to make it the go-to solution for operators. This work includes promoting the benefits of the technology but also making it more affordable, Ms McHugh said.

Chevron recently deployed MPD in a land drilling operation and reduced NPT in the project from 72 days to 12 days. Specifically, NPT due to lost circulation was reduced from 16 days to five hours, and NPT related to stuck pipe fell from 16 days to just one day. Well control-related NPT was eliminated. In all, this saved the operator approximately $25 million. “Managed pressure drilling is a technology that improves the detection and allows for a faster response to a well control event,” Ms McHugh said. “I don’t need much more reason than that to continue to progress it.”

The challenge for operators is that many of MPD’s benefits are hard for service providers to quantify upfront. Operators who haven’t been challenged with losses or stuck pipe in a particular field, for instance, may not see MPD as a value-adding investment. “If you haven’t experienced a problem when you’re drilling in an area, we tend to say it’s not a problem so we don’t need the technology,” Ms McHugh said. Since MPD systems are expensive, it makes it even easier for companies that haven’t seen the benefits of MPD firsthand to forgo using the technology.

Decades ago, this was the case with the top drive, she pointed out. “Remember, 30 years ago, we could not fathom the value. They were too expensive to install, too expensive to maintain and too expensive to use. Yet, the efficiency and the safety factors of top drives were well known.” Now, it would be almost unheard of to drill without a top drive.

To get MPD to where top drives are now, Ms McHugh said, the industry must do more to spread awareness of MPD’s benefits beyond just drilling the undrillable. “If you try to go out there and look up the economics of MPD and try to get some information, what you’re going to find is the reservoir you couldn’t have drilled without it,” she said. “There’s very little on there on preventing lost circulation or stuck pipe in areas where you could drill the well, but you’d have a lot more problems. We’ve got to get more of that information out there.”

In addition, she said, because the cost of equipping rigs for MPD can be prohibitive for some companies, especially in this environment, the industry has to find outside-the-box ways to make increase affordability. One possible approach is to get creative with contract structures. “We’re using the standard contracts for this type of equipment. If you’ve got a piece of equipment out there and you have to pay for it when you’re not using it, that makes it really difficult to swallow.”

Improving the technology and costs of MPD are essential, she said, because it might be a necessary tool for many wells of the future. “We have reserves and reservoirs impossible or extremely challenging that will be needed to supply energy to the world,” Ms McHugh said. “We must continue to develop this technology for deployment in the offshore environment, with rigs equipped for it, strong competency of the people to run the equipment and more reliable equipment. We’ve also got to work on how we align our contracts for this work to make it economic.”