CRITICAL ISSUES IN DRILLING & COMPLETIONS
requirements are almost definitely going
to go up. We’re also starting to look at
whether to evolve from 10,000-lb to 15,000-
lb pressure-pumping systems and what
type of substantial upgrade to drilling rigs
that would require.
Can this all be done? Absolutely. Is there
a cost to it? Absolutely. Is there an expect-
ed return on that cost? Absolutely. I don’t
believe drilling contractors can continue
to foot the bill for these upgrades without
a return to their shareholders being an
outcome of that equation.
Are drilling contractors and operators
aligned on who should bear what
costs, or is that a conversation the
industry still needs to have?
It depends on what level that conversa-
tion is happening, and which companies
are having that conversation. Everybody
has a different view.
This is a conversation that requires
a high degree of emotional intelligence.
This isn’t about being adversarial. The
operator’s shareholders can easily be the
same shareholders that drilling contrac-
tors have, and if that shareholder doesn’t
get the same degree or likelihood of return
on their investment, in both places, they’re
going to choose one company to back. As
soon as one of those companies runs out of
shareholders, we become challenged with
the inability to create the outcome desired
by the other company.
This is where you go back to the disci-
pline of those companies. Some compa-
nies are going to have that discipline, and
others may just need the cash flow to keep
working so they might make a different
decision. In the long run, the companies
that maintain capital discipline and don’t
take an emotional approach to these con-
versations are going to be the ones left
standing. Going back to digitalization, what’s
your opinion on whether the industry is
making the best use of its data ? If you
don’t think that’s happening, how can
the industry get better at that?
I think the industry is still trying to
figure out how to scrub the data for value,
or what is relevant data they should be
26 looking at. There are also legal challenges
around data ownership.
One of the big disconnects I see of new
technology being brought to market – you
can maybe call it a criticism – is the con-
dition under which it was developed. Was
it developed under a condition where you
have good relevant data, where you truly
understand the dynamics of the prod-
uct and the operator’s needs combined
with the drilling contractor’s needs? That’s
where you see a lot of the shortcomings
in data and data transfers. How does this
data directly translate to the tools we’re
using? As we go up the ladder, how do
we integrate that tool onto the drilling rig
or into the process to generate a desired
outcome? Another disconnect I see is that many of
these companies developing data-reliant
tools don’t own drilling rigs and never
have. Without that level of understanding
of the day-to-day operation of the drill-
ing rig, how do you know what to imple-
ment? Many times, a tool will look like
a great plug-and-play model in the shop,
but when you get to the rig site, who actu-
ally attaches it to the drilling rig? Who’s
responsible for the maintenance of that
product? Where is the labor going to come
from to manage it?
The drilling rig moves a lot – different
sizes of rigs that move from every few
days to once or twice a month. When we’re
moving the rig, who becomes responsible
for the third-party equipment? How do we
bring your tool down? How do we bring it
up? Where does it sit?
As a drilling contractor, we see hun-
dreds of service companies approach the
E&P company with a doghouse proposi-
tion, and we’re left on the outside getting
something handed to us that we have to
use. And yet, we weren’t a part of the con-
versation. That makes it really difficult for
that digital asset or new technology to be
adopted with open arms.
That begs a question about standard-
izing digital interfaces. Citadel has its
own OS, and you’re having to work
with all these different systems, some
of them coming from the E&Ps with
little input from you. Do you think the
industry is embracing some kind of
standardization? If not, do you see
that as a problem?
It is a problem, but it can also be a dif-
ferentiator for a company. We’re in a free
market. We don’t have standardization
across drilling rigs. There are different
pumps on the market that we can all buy.
There are different top drives, different
drill pipe. We get to make a free choice in
regard to how we see our future play out,
and that’s our bet to make.
If we had built the same rig that any
of the most respected drilling contractors
in the industry had, they would beat us
senseless just with the volume of rigs that
they have versus what we have. I can’t
come to the market with the same product;
I have to have a differentiated product and
service. This is a competitive industry, and I
think that’s one of the things that keeps
the industry moving forward the fastest.
Standardization might seem like a really
great concept to the digital provider, but to
the smaller companies that are trying to
get in, it limits our ability to exist or grow.
Standardization is the fastest way to get
something adopted by the most amount of
people, but it cuts out new ideas, concepts
and new entrants to the market.
As automated systems become more
prevalent on the rig, where do you see
the driller fitting in? Do you share the
view that automation is there to
enhance the role of the human on the
rig, not replace him or her entirely?
I share the view that continuing to trans-
fer tasks from human hands to more of a
mechanized or semi-automated process is
a good thing. Sequenced tasks, like a drill
pipe connection, are the low-hanging fruit.
However, I do see humans continuing to
play an extremely critical role on the rig. It
goes back to that disconnect around inte-
gration with the rig – many of the compa-
nies bringing in high-level automation to
the market don’t own or operate drilling
rigs. Is it now another screen that has to be
added because it doesn’t work inside the
rig’s OS, and the driller now has one more
thing to be trained on. If the result is to just
bolt on another operating system, this now
becomes an additional risk.
JAN UARY/FEB RUARY 2024 • D R I LLI N G CO N T R ACTO R