Statoil adopts integrated, trilateral partnership in search of ‘perfect wells’ on Johan Sverdrup field

Operator leverages shared incentive system that links compensation of rig, service providers to well delivery as part of efforts to reach 70% recovery for the field

By Eva Vigh, Editorial Coordinator

Operated by Statoil, Johan Sverdrup is one of the five largest oil fields on the Norwegian Continental Shelf (NCS), holding an estimated 1.9 billion to 3 billion BOE. In March 2016, Statoil began pre-drilling eight producer wells on the field, with the goal of delivering “perfect wells,” or wells delivered in the minimum possible time, that would contribute to a 70% recovery goal for the field. To achieve this, the company opted for an integrated, trilateral partnership among the operator, drilling contractor and service provider. “When we set out on a quest to deliver perfect wells, we knew that we could not do this alone. We delivered it together,” Jákup Øregaard, Drilling Manager at Statoil, said in a presentation at the 2017 OTC on 3 May.

Under this partnership model, all the main drilling and well services are integrated into one contract and one delivery, through an integrated drilling and well service (IDWS) contract with a single service company. There is also a separate rig contract, which requires services from the drilling contractor that go beyond the traditional scope, including casing/tubular makeup and wellhead fatigue services. Additionally, a new rig-based position, the main service provider’s offshore service pusher, was created to manage all the service providers and ensure smooth operations, Mr Øregaard said. “We had an interdependency between the contractor and the service provider, which makes success,” he said.

Further, a joint operations team was established, bringing together the contractor and main service provider earlier in to the planning process. The team worked together to discuss challenges and align goals and tasks under one vision.

Although contractual incentives are not new, the Johan Sverdrup contract uses a shared incentive system to further align the team’s goals and drive operational performance. The contract links the rig contractor and the IDWS provider’s compensation to total well delivery, which is tied to actual performance, such as delivering a well ahead of schedule.

The contract offers a welfare bonus that is shared equally between the drilling contractor and the IWDS provider. Services, for example, are compensated by actual performance, such as meter rates based on the meters drilled. Statoil intends this bonus to be used for the welfare and development of the employees involved with the project.

“The welfare bonus goes to the people who have actually executed the work on the rigs and in the workshops,” Mr Øregaard explained. The bonus is obtained for each day a well is delivered under budget and ahead of targets. The rig and IDWS providers can also earn a company bonus on each well if it’s delivered ahead of agreed-upon targets. The targets are adjusted for each well to drive continuous improvement and encourage the team to apply lessons learned from one well to the next. “We also see that with the new contractor model, we don’t spend as much time on logistics,” Mr Øregaard said.

During the campaign, eight producers were drilled. All of the wells had the same basic structure and were as standardized as possible. In each well, a 46-in. section was drilled and a 36-in. conductor was installed. Then, a 26-in. section was drilled and a 20-in casing was run, cemented and tested. Next, a 17 ½-in. section was drilled and a 13 5/8-in. casing was run, cemented and tested. Lastly, a 12 ¼-in. section was drilled and a 9 5/8-in. liner run and cemented. The wells were completed with  6 5/8-in. sand screens and gravel-packed in an 8 ½-in. open-hole section. The middle completions were installed with a remote operating plug. The wells have been temporarily suspended using a downhole plug. Their final tiebacks and completions will be run after the Johan Sverdrup drilling platform is installed and operational in 2019.

The eight-well campaign was finished eight months ahead of schedule. Part of the drilling campaign’s success can be attributed to Statoil’s integrated approach, Mr Øregaard said. Fifty-five percent of the cost reduction achieved so far have come from standardization and simplification of operations, with an additional 25% attributed to the efficiency measures achieved from the trilateral partnership, he said. The sixth-generation semisubmersible used in the campaign showed improved slip-to-slip connection time for stands of drill pipe, dropping from an average of 1.9 min in June 2015 to an average 1.1 min in December 2016. Further, zero HSE incidents occurred. DC