Drilling drive

Abu Dhabi has targeted crude production of 3.5 million barrels a day by 2018. It is now up to operators such as National Drilling Company to make that production boost a reality.
Drilling drive
Abdullah Saeed Al Suwaidi is \nCEO of National Drilling Company.
By Daniel Canty
Thu 17 Feb 2011 12:00 AM

With nearly 100 billion barrels of oil in reserves, the UAE can
rest assured that it will have access to a secure energy source for the
foreseeable future. Nevertheless, the
development of hydrocarbon resources is an ongoing necessity.

The UAE is targeting an oil production boost of 800,000 bpd
to 3.5 million bpd by 2018, the gauntlet has been thrown down for all companies
involved in exploration and production in the country’s rich onshore and
offshore fields.

If the UAE’s premier oil company, Abu Dhabi National Oil
Company (ADNOC) can be considered the head of the country’s oil and gas
industry, its subsidiary, the National Drilling Company (NDC) is surely the
beating heart of its operations.

Established in 1972 by ministerial decree, Abu
Dhabi’s National Drilling Company (NDC) is considered to be one of
the largest drilling contractors in the Middle East,
providing drilling, work-over and well maintenance services.

NDC was ADNOC’s first venture when it set up the ADNOC Group
of Companies. Today NDC operates a fleet of 18 onshore drilling rigs and 10
offshore jack-up rigs along with a multi-purpose service vessel.

Having drilled over 4000 onshore and offshore wells to a
total depth of over 21 million feet since beginning operations with its ND-01
land rig back in 1973, NDC has been on a rapid expansion drive with significant
contract awards over the past 24 months.

In 2009 the company awarded a contract for the manufacturing
of seven new land rigs, which are under construction, delivery of which starts
this year.

In the third quarter of last year NDC also awarded a
contract to Sharjah-based rig building specialist Lamprell to build two new
offshore jack-up rigs each valued at $158.5 million with additional optional
equipment orders valued at US$ 12.6 million per rig.

The rigs will be completely outfitted and equipped,
LeTourneau designed, self-elevating mobile offshore drilling platforms of a
Super 116E (Enhanced) class design with a rated drilling depth of 30,000 feet.
Construction work on the rigs is underway with delivery of the first rig
scheduled for the second quarter of next year.

NDC also has options for Lamprell to build two further
jack-up rigs, valued at $158.5 million per rig.

NDC has issued further tenders for the construction of
additional rigs required by its other clients as well as for the upgrading of
some of its existing rigs to meet the drilling requirements of operating
companies such as Abu Dhabi Company for Onshore Operations (ADCO), Abu Dhabi
Marine Operating Company (ADMA-OPCO), and the Zakum Development Company
(ZADCO).

The union jack up

As part of its programme to fully renovate old rigs and
extend their lifespan called RIAP or the Rig Integrity Assurance Programme, NDC
recently received its refurbished offshore jack-up rig, Al-Ittihad from
Dubai-based global ship building and repair company Drydocks World.

NDC aims to achieve 98% rig reliability and 95% availability
and asset integrity at all times across its entire fleet. The rig, whose name
translates as The Union was NDC’s very first offshore rig, which it acquired in 1975. Reconditioning of the rig took 40 days
at an estimated cost of $20 million.

The overhauled rig will be used by ADNOC’s offshore Zakum
field exploration and production arm ZADCO at its 168 square kilometre Umm
Al-Dalakh field located 25 kilometres northwest of Abu Dhabi.

The field, where oil was first discovered in 1969 began oil
production some 17 years later in 1985.  
Al-Ittihad is capable of carrying out drilling operations in waters 150
feet deep and can drill up to 20,000 feet.

The Umm Al-Dalakh
central complex is connected with the central complex of the Upper
Zakum field through a 66 kilometre pipeline. The giant Upper Zakum
which is estimated to hold some 16 billion barrels of reserves is where ZADCO
is developing its artificial islands as part of its UZ750 programme with joint
stakeholders ExxonMobil and Japan’s
JODCO.

The UZ750 project is aimed at boosting the field’s current
production of 550,000 bpd to 750,000 bpd by 2015.

NDC’s expertise in directional and horizontal drilling
allows it to enhance its drilling service offering to deal with challenging
reservoir formations that contain low-permeability rock such as those found in
the Upper Zakum field.

NDC’s chief executive officer, Abdullah Saeed Al Suwaidi tells
Oil & Gas Middle East the company is currently putting its investment
programme into overdrive.

“Capital investment in asset renewal during the 2000-2009
periods was in the region of several hundred million US
dollars,” he says.

“Our commitment to asset integrity ensures that NDC rigs
will surpass industry standards, strategically strengthening the company for
decades to come and continue providing excellent services in the long run.
The RIAP programme also includes rig upgrades such as increased deck load,
crane and accommodation upgrades, increased drilling capability and improved
safety and environmental protection.”

The cost of drilling
rigs varies by their capability, and the market availability, says Al Suwaidi.

“For example offshore rigs these days range from $160
million to $200 million while onshore rigs may cost between $25 million to $35
million,” he explains. Over the coming four years the company has plans to
invest $1.3 billion in buying new onshore and offshore assets.

Challenges

The CEO explains that with the current activity NDC is
experiencing, some of the key challenges for the company include the induction
and operation of new rigs and the upgrade of its existing fleet.

Al Suwaidi adds that recruitment to operate the new rigs is equally
challenging, particularly in providing support functions, including training
and development of new recruits.

“NDC also prides itself on its industry-beating HSE
standards,” says Al Suwaidi, which he adds, can have a knock-on effect on the
timescale for completing infrastructure projects. The safeguarding of NDC
assets and maintaining integrity remains a strong driver for the company.

Following last year’s devastating oil spill in the Gulf of Mexico, the process of drilling for oil and gas
has come under extra scrutiny, especially for companies that are at the
business-end of the hydrocarbon extraction process, safety is at the top of their minds.

“Our dedication to health and safety is matched by a
commitment to reducing the environmental impact of our operations to an
absolute minimum,” says Al Suwaidi.

“This is essential for the long term sustainability and
success of our business. We operate under a strict HSE management system of
which environmental protection is a major part. In addition to preventing any
discharge to the environment, we also place high importance on well control
readiness. This translates into crew skills assurance, equipment fitness and
maintenance and the use of up to date technology.”

One of the recent most important milestones achieved by NDC
was that of being accredited the ISO14001 surveillance audit. In June 2010, NDC
was re-certified for another three years which Al Suwaidi says, reflects NDC’s
commitment and dedication towards protection of the environment.

“NDC management believes that achieving drilling and
work-over activities can be accomplished in tandem with taking care of the
environment,” he concludes.

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