Integrated drilling service agreement to Baker Hughes

The services will help meet Statoil's expectations for enhanced drilling performance and service quality.

The agreement with Baker Hughes will cover the delivery of directional drilling, measurement-while-drilling, logging-while-drilling, mud logging, including 24/7 onshore support and drilling engineering services.

"The agreement contributes to the development of improved drilling efficiency which will ensure cost-efficient drilling through focus on the quality of tools, services and personnel." says head of drilling and well in Statoil, Øystein Arvid Håland.

- "If we are going to achieve our long-term production goals, we must drill more cost-efficient wells. Hence we need to improve drilling progress and reduce downtime during operation. By awarding the agreement to Baker Hughes, Statoil will benefit from their proven technical expertise and extensive experience on the NCS and we look forward to continuing our long standing relationship with this supplier."
 
The agreement includes focus on integrated operations (IO) which covers the integration of people, multidiscipline work processes and collaborative technologies to make and execute better decisions quicker. IO is enabled by the use of real time data transfer to achieve more efficient interaction between installations, onshore support groups, experts and other vendors, leading to more efficient drilling operations.

"Work processes with integrated operations are a way of sharing the knowledge between offshore personnel, experts onshore, our own management and our suppliers during operations." says senior vice president Operation in Development and Production Norway in Statoil, Bente Aleksandersen.

"Baker Hughes has been awarded the agreement because they supplied the best combined technical and commercial offer. Their IO experience is a part of this. This will lead to a considerable increase in the current workload for the supplier. And we are pleased to see that contracts with Statoil generate positive spin-offs and local content where our operations are."

The supplier is currently established on several locations in Norway such as Stavanger, Gulen, Bergen, Kristiansund and Sandnessjøen. In January 2013 Baker Hughes will also open a base in Hammerfest supporting operations in the Barents sea.

The firm two-year part of the agreement has an aggregated value of approximately BNOK 3. The agreement also has two two-year optional extensions, not included in the estimated contract value.

The integrated drilling services will be performed on the installations Brage, Dagny (optional), Eirin (optional), Grane, Heidrun TLP, Heidrun SS, Kristin Kvitebjørn, Njord, Norne, Morvin Oseberg B/C/Sør, Oseberg Øst (optional), Sleipner, Skuld, Snøhvit, Tyrihans, Troll, Volve, Vega, Veslefrikk, Aasta Hansteen and Åsgard.

Work under the contract will commence in third quarter of 2012.

Facts on drilling services

Service	Description
Measurements while drilling (MWD) and logging while drilling (LWD)	• Service providing downhole tools facilitating well bore placement measuring directional, drilling dynamics and formation evaluation data while drilling in both real time mode (data transmitted to surface) and in memory mode (data stored down hole).
Directional drilling (DD)	• Service providing downhole tools for drilling and placing well trajectories in desired position. • Positive Displacement Motors (PDM) and Three directional (3D) Rotary steerable systems are the main drive systems delivered by the service companies. • Service also includes the supply of jars, accelerators, hole openers, underreamers and any other associated equipment.
Mudlogging (ML)	• Service that involves monitoring and recording a variety of data related to the borehole and the drilling process. • ML incorporates gas analysis and cuttings data with drilling information to build a continuous formation evaluation record as the well is being drilled. • Equipment and services for ML can range from simple monitoring to integrated computer modeling of the well site and borehole environment
Integrated operations (IO)	• The integration of people, processes, and technology to make and execute better decisions quicker. IO is enabled by the use of real time data, collaborative technologies, and multidiscipline work flows (ways of working) in work processes.
Drill bits	• A drill bit is a device attached to the end of the drill string that breaks apart, shears, cuts or crushes the rock formations when drilling a wellbore.