SPE-171796-MS Applications of Wintershall’s Drilling Complexity Index (DCI) in the Well Delivery Process Blaise G. Nzeda and Juergen H. Schamp, Wintershall Holding GmbH Copyright 2014, Society of Petroleum Engineers This paper was prepared for presentation at the Abu Dhabi International Petroleum Exhibition and Conference held in Abu Dhabi, UAE, 10 –13 November 2014. This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright. Abstract Wintershall has developed a Drilling Complexity Index (DCI), which is a tool that is used to measure the complexity of a well. It is an early warning indicator and a measurement of how easy or difficult a specific well can be delivered. The DCI can be used at any phase of the well delivery process; from the pre-screening or conceptual phase through the detailed design phase to the execution phase. Wintershall’s HQ based Best Practice unit for Well Engineering (ESW) used well data from existing databases to compare the DCI to other complexity indexes. Furthermore, ESW analyzed the impact of the DCI on key performance indicators (KPI) such as non-productive time (NPT), cost per meter, and meter per day. This paper will present the work performed and the results that show a strong impact of the DCI on all the above cited key performance indicators. This DCI tool was initially planned to be used by drilling teams to plan wells. Following its successful development and roll out in the drilling groups, Wintershall looked at ways to expand its use and quickly realized that its usefulness extend beyond the drilling groups. This paper will further describe how the DCI can be used for the following purposes: ● ● ● ● ● ● Predict NPT of drilling projects based on DCI Determine the time contingency for a well Determine the cost contingency of a well Trigger peer-assists, well examination and staffing of well projects Support role in the project approval process Portfolio management The work which will be presented has accelerated the acceptance and the utilization of the DCI tool within Wintershall, and represents a significant improvement in assessing the inherent risks and hazards and potential consequences for exploration/appraisal/development wells. Well Complexity Against common belief Drilling, Completing, Testing and Stimulating a well is a non-intuitive, complex and risk-prone process which requires the precise integration of many technical and scientific E&P disciplines (e.g. Drilling & Completion Engineering and Operations, Geosciences, Reservoir Engineering, 2 SPE-171796-MS Figure 1—The process of drilling & completions as a sequence of “digging” and “constructing” operations Production Engineering, Facility Engineering, just to name a few. . .). Precise mathematical and computational engineering disciplines are on the opposite side of drilling operations, which are more interpretative and subjective. Furthermore, environmentally catastrophic and potentially deadly hazards are always lurking. This present a continuous threat until the well is finally completed and handed over to production operations or, as for exploration and appraisal wells, plugged and abandoned. Therefore rigsite operations represent a complex process with many controllable, but also many uncontrollable variables involved. John de Wardt has recently compared the drilling process with a sequence of digging, constructing, digging, constructing, and so on. . . until the target formations are reached. Each hole section which needs to be drilled represents a sequence of digging, while the plateau times with formation evaluation and casing running operations represent the construction process. These processes are repeated for each hole size with decreasing hole diameter. Upon closer look it becomes visible that the comparison of drilling operations with the mining digging process and industrial construction processes is limited, as both industrial processes are characterized by much more certainty in their ingoing parameters. The digging and construction in drilling operations – especially in exploration wells - is characterized by a much larger amount of uncertainty, as the upcoming geologic formations, pore pressures, fracture gradients and temperatures in the borehole are only vaguely known. Overpressured or fractured loss zones, squeezing salts or swelling clays may be encountered while not in the initial forecast. Figure 1 depicts the actual situation using a common Days vs. Depth diagram to make this point. SPE-171796-MS The construction of the casing is also framed by (1) limited accessibility and space on the rig floor and (2) unknown hole conditions (washouts, ledges, etc.) in which the casing is lowered, set and cemented. All these factors and many more add to the complexity of the well, which also increase the potential (or risk) of things going wrong at any time. These risks need to be adequately captured in the well costing process – through adequate contingency time and funds allocated to the project. Furthermore, these risks should be addressed in the well design process with technical alternatives, risks mitigations and contingency options. This overall existing complexity has been described in the so called drilling complexity index, which Wintershall has studied in great detail and described and ranked in a previous paper (Nzeda, Schamp, & Schmitt, 2014). As the company found many imperfections in existing complexity models, it was decided to come up with a proprietary model. 3 Figure 2—Low Complexity Figure 3—Medium Complexity 1. Green for Low Complexity well with DCI value between 0 and 2.9 (see Figure 2) Figure 4 —High Complexity Well 2. Yellow for Moderate or elevated Complexity well with DCI between 3.0 and 5.9 (see Figure 3) 3. Red for High Complexity well with DCI value between 6.0 and 10.0 (see Figure 4) The index tries to quantify the level of technical and geological complexity inherent to a well to be drilled. The main factors are: ● ● ● ● ● ● ● Type of well (e.g. exploration, appraisal, development, onshore, offshore, ERD, HTHP) Rig specifications (e.g. rig type, water depth, rig capability, operative situation, etc.) Well trajectory (e.g. TVD, MD, HD, inclination, azimuth, targets, etc.) Pressures & temperatures (e.g. max. MW, overbalance, drilling margin, etc.) Casing program (e.g. number of casings, critical setting depths, etc.) Formation issues (e.g. stability, special activities like underreaming, etc.) HSE considerations (e.g. pressure rating of BOP stack, location, discharges, H2S, etc.) The calculation of the DCI is achieved via a relatively simple spreadsheet, which takes very little time (15-30min) to be filled out. A verification and approval/endorsement of the results by the Drilling manager is mandatory and part of the workflow. For more details on the development of Wintershall DCI, read following SPE paper (Nzeda, Schamp, & Schmitt, 2014). Figure 5 shows the input matrix of the tool: DCI and KPI Relationships While the previous section has described the basic use of the DCI in the Well Delivery Process, the following section will explore the physical meaning and dependency of the well complexity (expressed in the DCI) in relation to common KPIs and well parameters. 4 SPE-171796-MS Figure 5—Input Matrix of DCI tool (excerpt) For that purpose Wintershall Drilling’s Best practice unit studied and analyzed worldwide well data from more than 21,000 wells drilled between 2008 and 2012, which were available via the Rushmore Reviews membership. A spreadsheet used to dissect the data had 159 data columns, so a total of more than 3.3 million data points where processed and analyzed. As it was impossible to calculate the DCI for all these wells, a strong correlation parameter was needed for the statistical analysis. This link was found between the number of casing strings of a well and its DCI. As published in a previous paper (Nzeda, Schamp, & Schmitt, 2014), there is a strong correlation between number of casing strings of a well and its DCI. Subsequently, this relationship was used for the analysis of the dataset. The following figures illustrate how the well complexity is intrinsically linked to certain well performance metric KPIs. Figure 6 shows the clear link between DCI and the wells NPT. While a lot of common sense is embedded in these results, it is notable how clearly these correlations show up. Basically, a well non productive time (NPT) value is strongly correlated to the well complexity level (DCI range) for worldwide/offshore/onshore wells. A similar correlation can be found with drilling performance, expressed in Days/1000m [days/3281 ft] as shown in Figure 7: As to be expected the well complexity also correlates with well cost, here unitized as Cost per Meter drilled (Figure 8): Other parts of the study even indicate a close link between well complexity (here expressed as Drilling Difficulty Index RDI as discussed in the SPE paper (Nzeda, Schamp, & Schmitt, 2014)) and the water depth of offshore projects, as shown in Figure 9: All these charts demonstrate that the well complexity has a very close relation to most drilling performance parameters. The DCI therefore has a high intrinsic value as it can be used to predict a variety of important Drilling results. This makes it a valuable tool of the overall well planning process. Traditional SPE-171796-MS 5 Figure 6 —DCI vs. NPT Figure 7—DCI vs. Drilling Performance methods of assessing Drilling “Productivity” or “Efficiency” include measures of time, distance, performance, productivity and financial parameters, and most of these numbers can be closely linked to well complexity. Because of that the DCI itself should be a part of any benchmarking process, to obtain 6 SPE-171796-MS Figure 8 —DCI vs. Well Cost Figure 9 —Regional correlation between DCI and water depth SPE-171796-MS 7 answers why some of the numbers (e.g. NPT, m/d, $/ft) are suddenly changing from year to year. Looking at the DCI may provide a valuable answer to these questions. Wintershall’s Well Delivery Process Having developed the tool itself is a necessary step, but how to embed it in the company’s overall workflows is key to making the tool a success and achieve the desired impact on the quality of drilling planning, costing and staffing. At Wintershall the company wide applied and Figure 10 —Wintershall’s Stage Gate Process mandatory project management process called Stage Gate Process (SGP) is the starting point for the application of such a tool. Managing a wide variety of projects is a complex, but necessary activity for any company in the oil & gas business. It is a structured and step-wise approach to plan and execute drilling projects. The process is based on the five basic E&P project stages of (see Figure 10): 1. IDENTIFY (Study the well phase) 2. SELECT (Concept selection phase) 3. DEFINE (Detailed well design phase) 4. EXECUTE (Drill & complete the well phase) 5. EVALUATE (Benchmark & Lessons Learned phase) As a project moves from one stage to another it has to pass several major decision points, or “Gates”. Before passing through a gate, the process has appointed experts (or Gatekeepers), who need to be satisfied that the project is sound, both technically and commercially. The SGP is supported by an assurance process with project reviews held between the project team and the review team. Here the DCI has quickly become a mandatory prerequisite for all reviews as part of the local drillteams Drilling & Completion project support package. This allows comparing projects using their DCI values and to map company’s DCI picture. A verification and approval of the DCI through the Project Review Team which evaluates all proposed well projects is seen as an added process improvement. A statistical overview of all operating companies (OpCo) and corporate well DCIs is already included in the companies drilling benchmarking process. While the SGP is a corporate tool to manage large scale exploration and CAPEX projects, a detailed well planning, execution and evaluation workflow has been developed in parallel. It breaks down this process into specific Drilling and Completions deliverables for the project teams. This workflow now forms the basis for Wintershall Drilling’s proprietary Well Engineering Management System (WEMS), which is the key tool for all Drilling Engineers to fulfill their daily job tasks. Within the defined workflows the DCI has found its definition in an associated Drilling Standard called “Drilling Complexity Index Determination”. Several other work steps and deliverables are affected by the DCI as will be demonstrated later in this paper. Figure 11 and Figure 12 give an overview of selected phases, work steps and/or deliverables and their connection and dependence on the DCI. DCI Embedded in Well Delivery Process Within Wintershall the implementation and acceptance of the Drilling Complexity Index are beyond the introduction stage as the DCI is currently embedded in most planning processes. As described below, the DCI is part of the overall drilling planning, execution and evaluation workflow. 8 SPE-171796-MS Figure 11—Drilling Planning phase workflow with DCI component highlighted Figure 12—Drilling Define phase with DCI component highlighted SPE-171796-MS Identify Phase: 9 In this phase, projects and wells are “born” through the acquisition and evaluation of exploration and/or development acreage, via seismic, exploration or field studies. Once a geologic “lead” is identified, an exploration well is envisioned by G&G and Reservoir Engineering disciplines. Furthermore, possible field developments options are drafted and evaluated. Drilling Engineers start their well design process with preliminary offset well reviews and preliminary well design with necessary data and information received from G&G. This eventually leads to an initial base case design and the development of an initial (early) Drilling Complexity (DCI). This number will represent the first identification of the projects complexity, which will also be used to determine the Time & Cost estimate (via the time contingency dependent on the DCI). ➢ Develop early DCI for well complexity ➢ Determine time contingency for cost estimate Select Phase: The (Concept) Select phase kicks off with an accepted Statement of Requirements (SOR) from G&G, which is the basis for technical and feasibility studies for the well. Developed well design options can be evaluated and compared with the help of their DCIs. The chosen concept and well design will have a DCI, which again triggers NPT time contingency levels in the time and cost estimate. Both time and cost estimate and DCI will be part of the presentation materials in well reviews of the Stage Gate Process. ➢ DCIs for well design options ➢ Determine time contingency for cost estimate ➢ DCI for cost estimate in Stage Gate project reviews Define Phase: In the Define or also called Detailed Design phase, competency requirements for the Drilling Organization need to be developed based on the well complexity. Also detailed design reviews and Peer Reviews will be steered by the DCI level, with increasing activities and process steps triggered by the DCI. The final and approved well AFE will again be based on the DCI level. Documented well objectives and performance expectations will also be subject to the DCI level. ➢ ➢ ➢ ➢ Execute Phase: Define drillteam competency requirement (aka Crew Resource Management) Trigger Peer reviews and design reviews by DCI Determine time contingency level of well AFE Determine well objectives and performance expectations This phase represents the Drill & Complete phase of the well. As the DCI is mainly a planning tool, only few steps are related to the DCI level. In Wintershall the decision to perform corporate Well Monitoring (DCI 1-6.0) or perform independent (third party) Well Monitoring (DCI ⬎6.0) is triggered by the DCI. ➢ Trigger in-house Well Monitoring via 3rd party Well Examination Evaluate PhaseL: The project close out phase has the main tasks of performing cost reconciliation, capturing the Lessons Learned and develop identified Best Practices. Some may decide to calculate a post well DCI and compare it to the initial go-in number. All of this should be documented in the End of Well Report (EOWR). ➢ Calculate a post well DCI ➢ Document KPIs, DCIs and other results in EOWR Well Time and Cost-Estimating Process During the well planning process, offset wells, when available, are used to estimate the duration of specific drilling activities. These activities are categorized in productive and non-productive activities. Non Productive Time (NPT) is the time spent on activities that DO NOT contribute to the progress of well operations towards their objective. Net operating time is the time spent on planned activities. Contingencies are time and cost allowances for certain events such as stuck pipes, adverse weather conditions and mechanical failures that are unpredictable but can have a significant impact on the time and cost to drill a well, when they occur. Unplanned events usually occur during drilling operations and do cause NPT that may lead to projects cost and/or time overrun. Therefore, any drilling time and cost estimate should include some contingency. The time distribution of the new well is composed of (see Figure 13): ➢ Net operating time from offset well activities that will also be performed in the new well and ➢ Additional well activities that were not performed in offset wells (e.g. coring, logging) and ➢ Project contingency The contingency of a well has the following two components: 10 SPE-171796-MS Figure 13—Time Categories ➢ Non Productive Time (NPT), which includes waiting on weather (WOW), avoidable and unavoidable lost time ➢ Drilling project specific risks Before the DCI process was developed and implemented, engineers either used their experience to set the contingency for each project or used some values mandated by their company. Time Contingency Wintershall data analysis of more than 21,000 wells clearly shows that a well NPT is strongly correlated to its DCI value (see SPE paper (Nzeda, Schamp, & Schmitt, 2014)). Therefore, the DCI of a well is currently being used in Wintershall to determine its time contingency. A detail analysis of well data enabled us to determine the contingency percentage for various DCI levels as per Table 1. During drilling time and cost estimate, a project time contingency is to be determined, using the well DCI, as per Table 1 below. This time contingency percentage is applied to all time related cost items such as rig rate, tool rentals, professional services, etc. Cost Contingency The cost contingency is determined as described below: I. Use DCI to determine the time contingency (as per Table 1) II. Calculate the total net time based cost by summing up the cost of all time based items (such as rig, equipment rental, professional services, etc.) III. Calculate the total gross time based cost by applying the time contingency to the net total time based cost. Total Gross Time Based Cost ⫽ Total Net Time Based Cost x (1 ⫹ Time Contingency [%]) IV. The total net well cost is calculated as sum of tangible costs and total net time based cost Total Net Well Cost ⫽ Total Net Time Based Cost ⫹ All Tangible Costs V. The total gross well cost is calculated as sum of tangible cost ⫹ total gross time based cost Total Gross Well Cost ⫽ Total Gross Time Based Cost ⫹ All Tangible Costs VI. The cost contingency is total gross well cost divided by total net well cost. Cost Contingency [%] ⫽ (Total Gross Well Cost / Total Net Well Cost) –1 Total Gross Well Cost ⫽ Total Net Well Cost (1 ⫹ Cost Contingency [%]) The calculated cost contingency is lower than the above time contingency because of the inclusion of tangibles costs such as OCTG, well head, etc. E.g. A time contingency of 35% may result in a cost contingency of 22% depending on tangible costs. SPE-171796-MS 11 Table 1—Time Contingencies These contingencies, time and cost, are used to estimate drilling project duration and cost. DCI as Trigger for Project Assurance Processes The DCI is also used as a trigger for the following processes: ● ● ● Peer Assists Well Monitoring Well Examination Peer Assist can be requested by any stakeholders to address issues that arise during the well planning. However for wells with medium to high DCI, there are more stringent requirements. For medium DCI wells, a Peer Assist meeting should be requested to review and mitigate activities with specific concerns (red-level activities). For high DCI wells, a Peer Assist meeting must be organized to review well planning and design. The objective of the meeting is the mitigation of activities with high complexity or with specific concerns. Wintershall has a corporate Drilling Support team that conducts well monitoring for all its worldwide drilling operations. This team of experienced drilling experts independently assesses drilling operations and advises the rig teams. For wells with high DCI (DCI ⬎ 6), Wintershall hires a Well Examination company to provide an independent assessment that the wells are designed, constructed, operated, suspended and abandoned in accordance with oil and gas industry standards. It is important to note that in some countries (e.g. United Kingdom), there is a regulation making Well Examination mandatory for all drilling operations within its border. Wintershall conducts Well Examination on all wells, independently of their DCI values, in the countries where it is mandatory to do so. Corporate Approval Process Wintershall corporate project approval process requires a team of company experts (Review Team) to independently review the work done by the project team, if necessary, suggest improvements and provide approval recommendation to senior or executive management. The documentation package, submitted by the project team to the Review Team, must include a signed DCI sheet. Therefore, the DCI has become a valuable decision element in the corporate approval of a well and/or field development. Portfolio Management The entire company project portfolio can be presented in a DCI mapping showing projects together with their mean DCI value (see Figure 14). The US dollar value or reserve volume of each project can be used 12 SPE-171796-MS Figure 14 —DCI Mapping of Project Portfolio to determine the size of its box on the mapping. Below are various ways to use the DCI and DCI mapping in portfolio management: ● It can be used to determine the DCI distribution within the company or in each country or each region that Wintershall operates in. ● This elevates on a simple map the drilling complexity and associated costs for all projects in the portfolio ● It can be utilized by business development or exploration teams to see where a project of interest fits in the company DCI mapping. ● It can be utilized to determine the DCI level (low, medium or high) of project to pursue/acquire in business development. A well complexity index distribution as shown in Figure 15 would also be very useful for the understanding of the overall portfolio risk as shown below: KPI and Benchmarking DCI is also used in the benchmarking process. The drilling performance of a rig or operating company is displayed against the DCI of the wells drilled. The DCI is a way to normalize drilling performance. How do we compare the performance of a rig or team drilling low DCI wells against performance a rig or team drilling high DCI wells? Does meeting or missing well duration and cost targets mean the same thing for both rigs and/or teams with low and/or high DCI? The detailed analysis of well data has proven that NPT increases with increasing DCI. As Figure 16 shows, over the last 4 years the mean DCI values of wells drilled by Wintershall have gone up moderately from 3.1 to 5.0, while NPT has jumped from a low 9.8% to 23%. This clearly identifies that other factors besides the DCI itself are involved. As such the tool can be used to identify sources of trouble. Another potentially useful display is the weekly management report, where wells could be displayed in DCI matching colors (green ⫽ low complexity, yellow ⫽ medium complexity, red ⫽ high complexity) in a master drilling schedule to focus on the critical wells (see Figure 17). SPE-171796-MS 13 Figure 15—DCI distribution for Wintershall Wells Figure 16 —NPT increasing with DCI Crew Resource Management Crew Resource Management (CMR) represents an already existing science which is being applied by several accident critical industries as varied as the aviation industry or the military. The application of CRM in the oil and gas industry is relatively new, and promoted by a few leading edge E&P companies. A detailed training curriculum is currently developed through OGP’s Wells Expert Committee (WEC) and may become part of future IADC and IWCF Well Control training. While it may be beyond the means of current data analysis capabilities to show a link between CRM and NPT and/or Well Complexity, the well complexity classification can also be applied to indicate increased staffing and experience needs for drilling engineering and operation teams. Such “Competency Management”, which should encompass a detailed mapping of the rig & office crews’ experience, may be made mandatory by regulators as also 14 SPE-171796-MS Figure 17—Example of a Master Drilling Schedule showing complexity of wells Figure 18 —Basic Competency Evaluation Tool (for DCI 1.0-6.0) expressed in new regulations like the European Offshore Directive, which will become effective in summer 2015. Competency Assurance Competency Assurance is another HR process closely linked to the CRM issue and also mandatory requirement of many Governmental regulators (e.g. UK DECC, Norwegian NORSOK,). As crew SPE-171796-MS 15 competency is more critical on complex wells, Wintershall has decided to link the Competency Assurance process to the DCI level. In all low and medium complexity wells (DCI 1.0-6.0) competency is assured via a relatively simple spreadsheet which is part of the overall yearly HR process. If the well is a complex well (DCI⬎6.0) another much more detailed spreadsheet has to be filled out by all critical field and office personnel. As such the available crew competency requirements for complex wells are captured in much greater detail and can be analyzed and linked to incidents. Figure 18 depicts the Wintershall proprietary HR competency tool. QA/QC Efforts Another potential use of the tool is in the field of QA/QC. While a poorly executed QC job can wreck any well – even with a low complexity – it appears to be logical that complex wells require more complex equipment, which again require increased QA/QC efforts to avoid train wrecks. Therefore Wintershall is currently investigating the relationship between the DCI, the resulting NPT and potential root causes through equipment/rig failures. Overall the tool could serve a further use as a QA/QC effort indicator. Conclusions The paper discusses 1st the development of a well complexity index in Wintershall, 2nd how the DCI correlates with well drilling performance and cost metrics, and 3rd how this tool is embedded in the overall well planning, execution and evaluation workflows. It demonstrates how the drilling complexity index correlates with various drilling KPIs and metrics and why and how the index can be used for well planning, staffing, and well costing purposes. While the overall importance of the DCI is clearly demonstrated via a thorough data analysis and a comparison to similar other efforts to describe well complexity, the following conclusions can be drawn: ● ● ● ● ● ● ● ● Drilling operations comprise a complex process of repeating sequences of “digging” and “construction” operations. Both process steps have to be carried out under sometimes adverse and uncertain physical circumstances, which add significant complexity to the process and are commonly expressed in drilling hazards and risks. Wintershall has captured the subsurface complexity of this process with a Drilling Complexity Index which summarizes all well inherent risks in a unitized 1 to 10 scale. The Drilling Complexity Index (DCI) is calculated via a simple spreadsheet based tool. It calculates a well complexity based on drilling technical, geological, HSE, and rig related parameters. The DCI is a valuable tool for the well planning process of Drilling Engineers. It can be used for an early risk & hazards evaluation of the well being planned. As such, it is used for the comparison of different well concepts during the concept selection phase. The DCI correlates strongly with other key well performance parameters like NPT, meters/day and also cost metrics, and therefore can be used as a tool to identify required time contingencies in the well costing process. The overall portfolio DCI can be tracked over time and the tool is being used by Wintershall to trigger certain process steps in the well planning process (e.g. requirement for peer assist or reviews, or well monitoring/examination options, drillteam staffing). HR related processes like Competency Assurance or Crew Resource Management can be steered with the help of the DCI tool providing guidance on required personnel resources and competency needs. The DCI can be used in corporate and affiliate benchmarking exercises to indicate the well mix of any given time frame or country/operating company. Critical wells can be shown on the master drilling schedule and thus highlighting critical operations requiring more attention. 16 SPE-171796-MS ● Wintershall uses the DCI tool widely throughout its benchmarking exercises and in the corporate project review process. The tool has been widely accepted and has proven its use in a very short time period. More uses are discovered while the tool is being applied and more research work is being conducted. References Nzeda, B., Schamp, J., & Schmitt, T. (2014). Development of Well Complexity Index to Improve Risk & Cost Assessments of Oil and Gas Wells. Society of Petroleum Engineers. Rushmore, P. (2011). Society of Petroleum Engineers. Anatomy of the “Best In Class” Well: How Operators Have Organised the Benchmarking of their Well Construction and Abandonment Performance. SPE. Kile, Hogne: The Statoil Well Complexity Index - Rushmore Reviews November 8, 2011