Preview Abstract

Selecting bit when you have multiple bit vendors giving their proposal can be a challenge for the operator.

To justify the bit selection can be hard for the drilling engineer in a multiple vendor situation.

The purpose of this paper is to show a systematic approach on how to select PDC bit based on quantitative measure by using a simple scorecard.

When the drilling organization has agreed on the overall drilling objective for the well a scorecard is used as decision criteria for selecting bits. To quantify the input for each bit a drilling simulator was used. The simulator can, based on a rock strength prognosis for a well, predict the rate of penetration and bit wear for each bit based on the bit design. For other criteria which are more difficult to obtain e.g. ability to create dog leg a qualitative ranking was used. In the two field examples shown from the North Sea the method has worked well to give a reliable and transparent bit selection method. Using a scorecard also reduced the ambiguity among the bit company representatives on how the selection process was done.

Introduction

Bit selection is one of many activities the drilling engineer needs to do. The drilling engineer which himself often isn’t an expert on bit design has to relay on the recommendations from the bit manufacturer experts. However, to choose between the different bit manufacturers recommendations can be hard. Often selection is based on previously bit manufacturers experience in the field or based on the bit manufacturers’ success with a new design elsewhere in the world. The decision criteria for selecting bit are often vague. And after the decision is made it is hard for the drilling engineer on an objective basis justifying the bit selection, both to the internal organization and also to the other bit companies who lost the tender. Oil companies have chosen different approaches to try to overcome this problem. In some cases the service companies has got the responsibility for bit selection by engaging the service companies optimization engineers. The operator doesn’t need worry about the bit selection but the drawback is that the operator still keeps all the financial risk for the bit selection and ultimately the drilling operation.

Another approach is to let a bit company be a preferred supplier with a contract for the next year or more. Such a contract includes elements of incentive based pricing so that the service company can gain from the improvements in drilling and has incentives to do so. However, in a complex drilling operation such pricing strategy may create a new challenge on how to correctly identify the actual cause for improvements or failures, and how to handle them in contractual terms. To give an example, a price incentive based on ROP increase can be destroyed for the bit company if other BHA equipment fails. Such situation can turn into a battle between the different service companies on which company should receive the pricing penalties or bonuses instead of working on the technical root causes of the problem.

In the end the oil company has to decide on how to balance technical and financial control. This paper describes a method to improve the process of PDC bit selection by creating a more transparent method of bit selection and also improve bit performance based on the principles of a balanced scorecard when a tender procurement practice is chosen.

The bit selection scorecard

Balanced scorecard is a strategic management system which has gain widespread usage in the last 15 years1,2. It is a tool for companies to communicate, measure performance and steer activities in alignment with the company strategy. Balanced scorecard main purpose is to overcome the limitations of only doing financial tracking when evaluating the company strategy. In a company the balanced scorecard breaks the strategy into the four different perspectives of financial results, customer appearance, internal business process and learning and growth1.