|
NIED LLC commits $3 million to complete LADS rig, says Okamura
Kristen Nelson, PNA editor-in-chief
Less than a week after discontinuing funding of Phoenix Alaska Technology operations Oct. 18, Masakazu Okamura, president of NIED LLC, told PNA Oct. 24 that the company has restructured the LADS rig project and committed more than $3 million to complete construction and commissioning of the rig.
NIED LLC, a subsidiary of NI American Corp., discontinued funding of Phoenix Alaska Technology operations Oct. 18, Erik Opstad of Phoenix told PNA Oct. 22.
Opstad said Okamura told the Phoenix Alaska staff in a conference call that funding of operations was being discontinued due to a change in the ability of the company to fund those activities. Opstad said nearly all management and staff were released and the office effectively closed the afternoon of Oct. 18. He said work on the light automated drilling system, the LADS rig, remains suspended and plans for the future of the project are unknown.
Okamura said Oct. 24 that a new management team has been assembled “to ensure the successful completion of the project.” He said NIED LLC expects fabrication of the rig to recommence shortly.
PNA reported in mid-August that work had stopped on the system because of a dispute between the financier of the project, Neidi, and rig fabricator Heartland Rig Inc. of Dallas, Texas.
The LADS rig was being built for use by BP Exploration (Alaska) Inc. BP spokesman Paul Laird told PNA Oct. 22 that BP had not been notified that funding had been suspended and was not in a position to comment.
Goal 30 percent cost reduction The rig was being built for BP to drill shallow, viscous North Slope accumulations. People working at Schrader Bluff, where LADS was slated to drill, had seen the kinds of drills being used for shallow reservoirs in Canada, BP Exploration (Alaska) spokesman Ronnie Chappell told PNA in fall 2000. They asked, he said, why the North Slope didn’t have a purpose-built rig for shallow reservoirs.
BP approached drilling contractors about building a lighter rig, Chappell said, and Nissho Iwai signed on. “And so we’re committed to drill a number of wells and they’ve committed to build and develop the system,” he said.
The goal is to reduce drilling costs by 30 percent.
“If they can get that 30 percent reduction there,” Chappell said, “then they’ll have something really special. They’ll be a lot of work for rigs like that.”
In October 2000, the LADS rig was expected to be working in August 2001.
In April of this year, however, Opstad told PNA that the rig wasn’t expected to be completed until July, with mobilization of the rig to Alaska expected to begin in late July or early August, with a 70-80 day transit time through the Panama Canal. It was expected to be drilling in December.
In July, Opstad still expected to give the LADS an acceptance test in August. BP said that while the rig was on the drilling schedule for Milne Point in mid-December, a January arrival date was more realistic.
BP spokesman Ronnie Chappell said then that BP remained committed to the LADS project, despite several setbacks associated with development and construction of the drilling system.
Then, this August, work on LADS stopped after a dispute between the financier of the project, NIED LLC, and rig fabricator Heartland Rig.
BP spokesman Paul Laird told PNA in August that it was apparent to all involved — BP Phoenix and NI — that the rig project is “pretty seriously off track.”
Delay on LADS construction is “affecting drilling planning and business planning,” Laird said in August. He said progress on the rig “seems to have taken a turn for the worse in the last few weeks” and that work on the rig in Texas had stopped.
| 