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Shared Services Drilling gets new name, larger staff, more responsibilities A shortage of rigs is not a problem on the North Slope; a shortage of qualified people is, says Fritz Gunkel, BP's Kay H. Cashman PNA Editor-in-Chief
The name “Shared Services Drilling” disappeared when BP Exploration (Alaska) Inc. became sole operator of the Prudhoe Bay field this past summer, but the actual Shared Services entity — now a BP division called Alaska Drilling & Wells — is structurally intact. What has changed is the affiliation of its staff and the scope of its responsibilities.
Initially, Shared Services was made up of BP and ARCO Alaska Inc. employees. As of July 1, everyone became a BP employee.
Fritz Gunkel still heads the organization. And it is still responsible for Prudhoe Bay drilling.
What has changed the most is the scope of the drilling division's responsibilities.
Gunkel and his staff, and the leaders of drilling and wellwork at Phillips Alaska Inc. saw this year's changes in North Slope operatorship and ownership — ARCO Alaska to Phillips Alaska — as an opportunity to make the best use of the coiled tubing drilling talent in Alaska for both North Slope operators, BP and Phillips.
“Our goal was to restructure the drilling groups to gain efficiency and do things more cost effectively,” Gunkel told PNA in a recent interview.
For the BP drilling group, the end result was expanded responsibilities.
Fritz Gunkel said, “From the time of its formation in 1992, Shared Services was responsible for rotary drilling only in the greater Prudhoe area and in other BP operated fields. The first change came before single operator for PBU in 1999, when we took accountability for BP's coiled tubing drilling and much of BP's non-rig wellwork. Now we now handle all coiled tubing drilling across both BP and Phillips operations. We also handle all of BP's major downhole maintenance ... and coiled tubing workovers, stimulations and most of the slickline and electric line interventions.”
The drilling division's geographical area has also increased with the expansion of BP's activities across the North Slope. In the past, Shared Services did not handle exploration or field development. “Now Alaska Drilling & Wells is responsible for drilling and well maintenance in the Greater Prudhoe Bay area, which includes Point McIntyre, and Niakuk. ... and for Endicott, Milne Point, Badami, Northstar, satellite field exploration and all BP's remote exploration activities,” he said. How many rigs? With stepped up drilling activity on the North Slope combined with the BP drilling and well group's expanded geographical responsibilities, the number of rigs Gunkel and his people oversee has also increased.
Last year, Shared Services was responsible for three rigs — two rotary rigs and one workover rig. Today, Alaska Drilling & Wells oversees seven rigs, including three rotary rigs, one workover rig and three coiled tubing units (see sidebar). It will also be responsible Nabors rotary rig 33E, which will be drilling at Northstar island at the end of the year.
BP's drilling group also has responsibility for the high tech rig Phoenix Alaska Technology is building for use in marginal fields on the North Slope, in particular the heavy oil sand at Schraeder Bluff. The light automated drilling system is expected to cut drilling costs by as much as 30 percent, Gunkel said.
Despite the fact the new rig's design has come under considerable criticism from the drilling community and his counterparts at Phillips Alaska, Gunkel thinks the system has a good chance of success: “I say what we've always said to skeptics, 'watch our smoke!' I think skepticism helps. ... I am proud that BP and ... our contractor have the courage to take it on.”
Before the arrival of the Phoenix rig in the fall of 2001, Gunkel said “three other rotary rigs are expected to go on line in the next four to six months at Endicott, Milne Point and for exploration at NPRA.
“I think we — our group — will have a rig count of 10 by next winter, not including the Phoenix rig,” he said.
Gunkel sees strong drilling activity continuing into 2002.
With the price of oil so high, why aren't there more rigs working on the North Slope today? People, not rigs, limiting factor “Rigs are not the problem; people are the most valuable commodity resource in the oilfield. There's something like 11 idle rigs on the North Slope right now. It's skilled professionals,” not rigs, that are hard to find, Gunkel said. “It takes some time and effort for the oil industry to re-staff,” he said, referring to the downturn in oil company spending and drilling activity in 1999.
“We've hired a dozen people in the last two months; in addition to that, we have brought on a number of consultants, primarily operations supervisors. We're looking for good people both as contractors and employees right now. We're looking for a range of people. We want up and coming people who are just joining the business, as well as long-term professionals,” Gunkel said. “But our hiring challenges pale in comparison to the challenges faced by the rig contractors and service companies. On average, every rig requires 80 skilled professionals support it.
“It's great to be growing again. ... The challenge we're grappling with is to grow for the long term and to be smart about growth,” he said.
Gunkel said in an economic boom, the tendency is to “just throw people at problems and issues.”
BP, he said, is trying to approach growth “thoughtfully, carefully. ... We want to run high quality, safe operations, which allow contractors to spend a lot of time training and orienting their rig crews.
“We as operators, are all looking for talented people. All of us — operators, contractors, and service suppliers — are looking in the same pool,” Gunkel said. “Right now, good people are the problem ... and the key.”
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