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January 2004

Vol. 9, No. 4 Week of January 25, 2004

PETROLEUM DIRECTORY: The Arctic Millennium marks a new age of drilling performance

NIED’s first fully automated Arctic class exploration drilling rig is designed for safety and engineered for speed

Susan Braund

Petroleum Directory Contributing Writer

The new millennium is synonymous with revolutionary change. NIED’s contribution to the future of drilling in the new millennium is the Arctic Millennium rig, a revolutionary drilling approach that will result in major reductions in drilling costs.

“The new rig is a step change that will deliver unprecedented performance to the drilling industry,” says Conrad Perry, NIED LLC’s Alaska project manager, who has 19 years of international experience with drilling producers and co-fabricators and 10 years experience in Alaska.

“The cost of exploration is tremendous. The Arctic Millennium is the most modern, Arctic-rated, land rig in the world — a lighter rig with a lighter footprint that will dramatically affect those costs.”

NIED LLC is a wholly owned subsidiary of NI Energy Development Inc.; Nissho Iwai Corp., a top Japanese global trading company, owns both companies.

“Continuous improvement or evolutionary change created today’s drilling standards. NIED LLC sought to help its energy partners become even more successful by raising operational standards in drilling of exploration wells,” the company said. “The energy partner’s goals concentrated on flawless HSE performance and significantly reduced well costs.”

The rig

The Arctic Millennium rig, the first fully automated Arctic-class drilling rig, is designed to provide operators with a fit-for-purpose solution to their exploration and development needs.

With its small footprint, state-of-the-art triple-option power system, and module weights under 80 tons, the track-mounted rig can deliver cost effective and technologically superior drilling capabilities to locations throughout Alaska’s North Slope and other remote areas, the company said.

Perry reports that, after months of construction, commissioning and testing, NIED LLC began marketing the rig in July of 2003.

“We’ve drilled with it … three weeks of hard rock, hard-time drilling in Brady, Texas. Testing it in Texas extended the design temperature range from minus 40 to plus 95. We are not only promoting the rig, but the new concept of drilling ... so many more rigs will follow based on what we have done here.”

Rig features

The rig design combines a host of innovative features and benefits: mobility, accelerated rig up time, automation, small footprint, increased safety and several power options. “The combined features work together to save our clients millions of dollars in exploration costs, while performing as a state-of-the-art development drilling platform” says Perry.

MOBILITY

Ice roads may no longer be required to access remote exploration sites. With the Tundra Track® system’s disbursed load, North Slope locations tied into the existing road system will be accessible at any time, even during breakup.

“Because of light footprint, the thick, heavy ice roads are not required for transporting this rig to its location 100 miles off infrastructure. It may require snow to protect the vegetation, but not the ice to distribute the load. We just go!” says Senior Project Engineer Jack Newell. “We’ve proved the movability of the rig, and not just on paper, we’ve seen it move. At 55 psi, it exerts about the about the same loading pressure as a loaded F-350 pickup with camper.”

SET UP

The Arctic exploration rig takes only one day of rig up — not the two or three weeks required for conventional rigs — making this rig capable of drilling several exploration wells in a winter season.

Previously, the only reasonable way to drill past 100 miles out of the Prudhoe infrastructure was the modular Rolligon rig, which takes 25 days to put together, 14 days to dismantle and includes 150-180 pieces. In comparison, the Arctic Millennium travels at 10 mph, goes together in 24 hours, and only includes 11 pieces. The Arctic Millennium rig is brand new, not repainted or refurbished — a new rig designed for the Arctic.

AUTOMATION

As the first Arctic rig to be designed entirely in 3-D CAD, the programmable logic controlled, high tech design draws together automated features used on various land and offshore rigs over the last two decades. According to the company, the AM Rig integrates this functionality with an advanced computer control system and select technology transfers from other industries, to produce a robust, mobile, automated, and health, safety and environment friendly drilling machine — fit for purpose.

TRIPLE-OPTION POWER SYSTEM

The Arctic Millennium rig can operate with computer-controlled low emission diesel engines, hi-line power, or with a combination of diesel and hi-line power using a motor/generator and the diesel engines together, powering the hydraulic systems.

HSE friendly

“Global standards of health, safety and environmental excellence are designed into the AM Rig,” says Newell.

Health — The Arctic Millennium is the first rig to use a closed tank mud system to reduce the volatile compounds, odors and emissions of today’s drilling fluid formulas.

Safety — Automated equipment minimizes rig crew contact with reciprocating and rotating equipment during most routine operations and reduces crew size compared with conventional rigs.

“During normal tripping operations, drill pipe is not handled by a human. This is good,” says Perry. “When you combine men and iron people can get hurt. The AM removes a lot of potential for accidents. No more men hanging 90 feet up in the air or throwing heavy wrenches to make connections — “we’re making it as safe as possible by removing unacceptable hazards and letting machines do the hard and dangerous work.”

Environmental — The Arctic Millennium rig delivers minimal environmental impact. In addition to the Tundra Track® system’s low ground loading pressure, the electric drive delivers zero emissions and low acoustic impact. To avoid uncontrolled release, rig liquids are double contained to 110 percent of tank volume and other design elements and have taken waste minimization and pollution prevention into account.

Overcoming traditional barriers

“There is a tendency in the industry to resist the automation, a tendency to go with the familiar,” cautions Newell, “Kind of an ‘If it works, why change it?’ attitude, but the automation makes it safer for everyone. It’s actually an aide to man. The computer alerts the driller of potential problems and provides checks and balances to human error.”

Working this rig requires more technical skills, but according to NIED, jobs and services won’t be eliminated, rather resources will be reallocated and training provided to drilling personnel. Jobs and services will be spread more efficiently so cost per well goes down.

“Drilling in Alaska is not difficult — it’s just a logistical nightmare, “says Perry. “The Arctic Millennium rig gives operators more opportunity for success.”

NIED, however, is not a rig contractor; it is seeking to partner with an experienced rig contractor in the Arctic.

Instead of drilling one site per season, there’s now the possibility of from three to five sites, thereby providing more exploration opportunities, more development and more revenues into the state.

“There’s more long-term business to go around if Alaska has more discoveries. It’s about more bites of the apple,” comments Perry.

Editor’s note: Susan Braund owns Firestar Media Services in Anchorage, Alaska.






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