OMV: Technology key to halving cost, doubling the number of wells drilled

By Joanne Liou, associate editor

From operations onshore Romania to offshore New Zealand, challenges come in all shapes and sizes for OMV E&P, but the Austrian-based operator is showing no sign of slowing down. “The reality is we’re going to halve the cost and double the number of wells drilled,” Jaap Huijskes, member of the Executive Board and Managing Director of OMV, stated. “I’m not looking for 5%. I’m not looking for 10%. If we can halve the cost of the wells, we will double the number of wells that we drill.”

There is not a one-size-fits-all solution, he acknowledged, and he believes the key to overcoming the challenges that range from drilling to logistics to regulatory requirements is technology. Further, “a key theme for these new technologies is that we need to reduce the risk of operations and that we need to reduce the cost of operations,” Mr Huijskes stated at IADC World Drilling 2014 in Vienna on 18 June.

The operator is applying advanced technologies to overcome the challenges of its diverse portfolio. To cut drilling costs and improve efficiency onshore Romania, for example, it has deployed 13 3/8-in. drilling with casing to more than 700 m; the company also has run 20-in. drilling with casing to approximately 500 m. “It works for us. It works from a cost efficiency and a risk management perspective, and we will be pushing this further in terms of length and complexity,” he said, adding that there are plans to apply steering capabilities to its casing while drilling applications.

Another region where technology has improved operations is in the Kurdistan region of Iraq, where OMV encounters a difficult and high-cost environment. The operator’s best well to date, according to Mr Huijskes, was a discovery well that was drilled using foam drilling in shallow sections. Other technologies OMV is looking to include multistage stimulation, automation, extended-reach drilling, and managed pressure drilling/underbalanced drilling.

OMV’s annual capital operating expenses is estimated at approximately $4 billion, with 40% going toward drilling, according to Mr Huijskes. “I’m quite happy to spend the $4 billion,” he added. “We have a new set of projects, new set of challenges.”