There is a lot of buzz about digital data and analytics changing drilling, and far less talk about teaching those who drill the wells how to deliver on that promise. That looks like a major oversight to Kevin Krausert, the chief executive officer of Beaver Drilling.
“Our industry is trying to figure out how we can engineer the humans out of this change. And we need to be thinking about how we put the humans in charge of engineering this change,” Krausert said.
His critique was delivered during a panel discussion at this year’s SPE/IADC Drilling Conference and Exhibition. The head of the small Canadian drilling company argued that the value of digital- and data-driven change will depend on whether workers skilled at running a mechanical system are prepared to lead teams finding way to use digital tools to drill more productively.
To try to back up that claim, Beaver created a 2-year program in partnership with the University of Calgary to create the Avatar program to prepare students ranging from roughnecks to drilling managers for digital change.
The notion that an employee for a drilling contractor who may never have gone to college is the point person for drilling innovation is counterintuitive. But experience with drilling improvement programs has found that the ones on the rigs play a critical role.
“The fundamental shift has to be in the mindset of the guys who are right there in the thick of it. They are the ones affecting the change; they are the ones who can lead the movement,” said Jennifer Zieglgansberger, an executive coach in Calgary who partnered with Beaver to create Avatar.
People-Driven Change
Beaver’s story is one of four examples of worker-centered innovation efforts in the oil industry.
Occidental Petroleum has slashed drilling costs using a flood of data from wired drilling pipe. The key to doing so was the teamwork on that rig, and others nearby, to systematically improve performance (SPE 194093).
Advanced technology provided an unusually detailed picture for a crew “systematically engaging the rig in identifying opportunities for improvement and using engineering design to make continuous improvements that can be used anywhere,” said Molly Giltner, a senior drilling engineering supervisor at Occidental, who delivered a paper on the project at the drilling conference.
“People can do it, they just need the information,” said Giltner, the project leader. “They need to be told they can change things. Motivating people makes a huge difference. We do not talk about that a lot as engineers and they do not talk about that in school.”
Corva has grown rapidly due to the strong demand for its real-time data and analysis system. In a year, it has gone from a couple of rigs equipped with its drilling advisory system to 250 rigs and 35 clients by September, said Ryan Dawson, chief executive officer of Corva.
Its future depends on whether drillers use these tools to improve rig performance. “There had been cycles of trying, using, and failing. The tailwind of digitalization led a lot of companies to adopt. We have to prove tangible value,” Dawson said.
Apache’s program to roll out its drilling advisory program on rigs working in the US focused on winning over the many people affected by the change, and finding ways to address their issues. A paper describing its effort said failure to do that has undercut many promising drilling innovations (SPE 194184).
The paper included an anecdote about curious drillers quickly adopting the advisory program, but it also noted, “The driller’s attitude would tend to reflect the overall attitude of the leadership on the rig.”
Drillers have often been wary of programs that record their every move and grade it. They also do not want to stake their reputation on something new that seems unreliable. “When we pull out a new technology, the feeling the guys have is, when it hits road bumps the first inclination is to turn it off,” Krausert said.
A key piece of the digital transformation has been the spread of drilling advisory systems putting more data, and responsibility, in the hands of the driller. Instead, Krausert said the industry has been asking for more but giving drillers less reason to risk trying something different.
While drilling advisory technology is designed to empower the driller, waves of layoffs since the 2014 oil price crash sent a signal that is the opposite of empowering. Krausert said the industry is sending a message: “You are highly disposable. And by the way, be more collaborative and drive down costs.”
Rig-Based
The process behind both the Apache and Occidental programs owes a lot to an SPE paper dating back to 2006.
Both Apache and Occidental cited a paper about ExxonMobil’s drilling improvement program written by Fred Dupriest, now an engineering professor at Texas A&M University. It described how the company and its contractors systematically improved performance by identifying and attacking a series of issues that were limiting performance (SPE 102210). Initially those in charge assumed the ideas would flow from engineers in the office analyzing the data.
“It was believed the real-time interface would allow the organization to bring more engineering to the brake handle,” the paper said. Instead it found: “Offsite personnel cannot effectively interpret the data without detailed knowledge of ongoing operations.”
That still rings true. The Occidental paper previously mentioned described a step-by-step process. Teams defined specific factors limiting performance. That set the agenda for engineers offsite working their way through the mountains of data that are generated during drilling.
Like ExxonMobil, Apache and Occidental train rig leaders, including contractors, in the physics of drilling so they can anticipate the likely impact of changes they are considering to deal with limiters.
Ultimately, the person at the controls has to decide how to translate that into action. While Corva plays up the value of real-time data, analysis, and support by drilling veterans, it has a rule against telling clients what they should do.
“At the end of the day, the client has to make the call based on all the data and advice at hand. Real-time operations are all about high-grading information from the rig and turning it into valuable knowledge through human insight and experience,” Dawson said.
For Further Reading
SPE 194093 Performance Impact of Downhole Data from Wired Drill Pipe and Downhole Sensors by Molly Giltner, Linsay Earle, John Willis, and Diego Tellez, Randall Neel, Occidental Petroleum Corporation.
SPE 102210 Comprehensive Drill Rate Management Process To Maximize ROP by Fred E. Dupriest, ExxonMobil
SPE 194184 Change Management Challenges Deploying a Rig-Based Drilling Advisory System by Michael Behounek, Blake Millican, Brian Nelson, Apache Corp., et al
SPE 119570 Step-Change Improvements With Wired-Pipe Telemetry by Chris McCartney, Allen, Scott, Occidental Petroleum Corp.; Maximo Hernandez, Grant Prideco, et al.
Beaver Drilling: Drillers as Innovation Leaders
Beaver Drilling’s survival in the brutally competitive oilfields of western Canada depends on the performance of eight drilling rigs.
The strategy of its chief executive officer, Kevin Krausert, depends on effectively using new drilling technology to gain a performance edge on the competition. Executing that plan will require drillers prepared to drive change.
“I was thinking about a lot of technology systems that we were already using, process automation on our rigs, surface optimization, drilling apps. These are fundamentally new pieces of technology and there was really very little training in the industry that enables and empowers the driller to actually use them confidently,” Krausert said.
To give meaning to the easily mocked phrase “really empowering drillers,” Krausert decided to create a training program in partnership with the arm of the University of Calgary business school that does executive training.
The oil business in Canada “has been hammered by everything that has happened since 2014. You have got to be a different kind of company is you’re a Canadian company. You need a different kind of worker. You need a different approach,” said Derek Hassey, a professor at the University of Calgary business school whose expertise in entrepreneurial thinking was a critical element in the training program created with Beaver, known as Avatar.
It recently graduated 17 Beaver drillers and rig mangers, plus one roughneck. The 2-year program designed for working drillers included classroom work, online studies, and projects. The university courses included business basics, from finance to energy economics. There was also networking with executives, group evaluations of new digital technology; and individual research projects on topics from drilling logistics to recruiting new rig hands.
Other companies offer drillers training that is directly related to the jobs, such as the physics underlying drilling performance. Krausert’s goal was to turn technically competent drillers into leaders of innovative business units who understand the need for new technology, and the resilience required to get in working effectively.
A program that includes meeting the artistic director of the Alberta Ballet Company to learn about creative thinking may seem like an odd approach to training skilled operators of powerful drilling machines. It was included because a major goal was to teach them how to identify promising ideas and give them the confidence to pursue them and evaluate which are valuable to the business, said Jennifer Zieglgansberger, an executive coach who also partnered with Beaver in developing the program,
She explained, “With these guys, they are naturally innovative. They almost always have a business on the side, a farm or something like that. They are hands-on learners. What makes them successful on the rig is that they are very gifted at executing.
“But in the world we are living in we want to leverage technology. Doing things more efficiently and effectively takes an innovative mindset. It is something you do every day and you find a way to do it better.”
Doing it better requires being in the habit of looking for ideas that work, which can be consistently repeated to significantly improve results.
Class work covered how to evaluate and research ideas to see which innovations are potentially valuable, and use that process to make a case to justify the money and time required to make a change. In a business, having a good idea is worthless unless it can be sold to those who control spending.
“You need to build a business case, do some research, and talk to some people” to make a financial case that the payoff justifies the cost and effort required to change, Hassey said.
To help the Avatars learn the ways of management, they were each assigned an executive sponsor at Beaver’s Calgary headquarters.
Now that the first class is done, it is hoping to do another. Oil operators and service companies are interested but it is a costly program, supported by job training grants from the province of Alberta.
A simple argument for the program’s value is it has to keep Beaver rigs working at a time when oil and gas prices in western Canada are depressed by lack of pipeline capacity to faraway markets. The program’s focus on continuous improvement helped forge a bond with a Calgary-based operation, Birchcliff Energy.
“We never drilled for Birchcliff before Avatar, and now we are their number one driller,” Krausert said.
This is the first of a four-part JPT series on how drillers are leading change.
