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Reducing out of service time through innovation and partnership

31st March 2016

Sharing ideas on innovation in the industry was the focus ofa recent International Association of Drilling Contractors’ (IADC) chapter meeting held on February 18th in Dubai, UAE. Among those presenting at the meeting was Allrig’s CEO, Mark Hannigan. 

Innovation and partnership key to strengthening the industry

In response to a question from a drilling contractor during the Q&A session following the presentation, Hannigan stated that Allrig has also felt the effects of the downturn at a rate comparable to those of the drilling contractors. The day rates for some of Allrig’s specialist services have dropped by up to 40% since the beginning of the downturn.  

Hannigan adds: “The downturn has taught us that the era of extended stays for drilling rigs in the shipyard is probably over. Companies need to come up with ways to perform services on location, so that the rig can remain working. Doing so will make the industry stronger.”

On that point Hannigan suggested that “drilling contractors and service companies collaborate to come up with innovative ideas, rather than simply push for discounts.” Doing so will lead to bigger, sustainable cost reductions and allow DCs to gain the trust of suppliers. With that trust comes access to the creative talent and SMEs within the supplier’s team. This type of collaborative behavior is a win-win for everyone in the industry.

“The whole industry became top heavy and inefficient during the time of $100 oil,” says Hannigan. “In that respect the downturn has served a purpose by helping to create a leaner industry, which is good for the long term. However, moving forward, we need more consolidation and collaboration in order to survive – between oil companies and drillers, and drillers and service companies.”

Rising to the challenge for customers

In his IADC presentation, Hannigan cited three examples of Allrig’s ‘out-of-the-box’ thinking that saved its customers costs and downtime, without compromising quality and safety.

During UWILD inspections of spud cans and connections, instead of following conventional methods like completing the cleaning and inspections while the rig is berthed quayside in a shipyard or port, Allrig provided a riding crew of technicians onboard a dry tow transport vessel. They conducted the cleaning and inspections during a planned rig relocation from the West Coast of Africa to the Middle East. For the client, there was no disruption to planned yard scopes to execute UWILD surveys. This saved approximately 3 days of downtime for the client.

Secondly on a jacking system, in contrast to the conventional, steel coated teardrop covers, Allrig designed and manufactured transparent polycarbonate covers, which meet all corrosion, UV and mechanical integrity requirements. This enabled the client to visually monitor equipment through the polycarbonate window and watch for early signs of damage, which can be identified before component failure. 

A third example of how Allrig has adapted its service during this market downturn is in leg rack tooth repair. Normally, the removal and replacement of a damaged section of the chord and rack is a pretty large undertaking that a drilling contractor would be reluctant to do. Allrig has worked with class (DNV in this case, together with a client in the North Sea) pioneering a rack tooth buttering process: welding the rack back into size and shape on location, saving the clients ‘shipyard time’. This repair procedure is DNV approved, including the procedure qualification and the welders’ qualifications.

A scarcity scramble

So, what’s the road ahead according to Hannigan? “The speed and aggressiveness with which the industry has cut costs in response to the downturn makes it inevitable that there will be a scramble for resources when the upturn arrives. Oil companies have really cutback on exploration and small and medium-sized, specialized service providers are now being pushed out of the industry, which will be a problem when the market upturns. At projected rates of supply and demand the current oil surplus will eventually be consumed and the lack of fresh supply will create scarcity. The remaining service suppliers will then scramble for the scarce resources that remain. It is vital that the industry as a whole maintains a core level of capability and competence in spite of short term challenges.”