Transocean has been one of the leading offshore drilling companies in the world for almost ten years and is based in Switzerland. The company operates in twenty countries, mainly Switzerland, United States and Brazil. Currently, Transocean owns, has partial ownership of or controls more than 120 mobile offshore drilling units. However, between 2010 and 2015, Transocean’s revenue has reduced from $11.5 billion to $7.3 ( Kato, 2016 ). The total value of assets has also dropped from $36.4 billion to $26.3 billion. In October 2015, Moody’s Investors Service downgraded the company’s Corporate Family Rating (CFR) from Ba1 to Ba2 and the senior unsecured notes ratings from Ba1 to Ba2, following a rating review that projects an increased probability that Transocean’s credit metrics will considerably decline over the next several years.
The Ba2 CFR of the offshore drilling contractor is supported by Transocean’s leading position in the industry, strong liquidity, substantial contracted revenue surplus, and large and diverse offshore drilling fleet. Transocean has substantially reduced its liability following the Deepwater Horizon drilling rig explosion of 2010 and other incidents including the offshore drilling leak off the Brazilian coast in 2011 and the Transocean Winner grounding in Scotland in 2016 ( Kato, 2016 ). The company has a negative outlook and is need of proper innovative strategies to restore its initial position in the industry. This paper discusses the innovative technologies that would address the business scenario at Transocean.
Delegate your assignment to our experts and they will do the rest.
Capping and Containment Systems
Future attempts to mitigate the likelihood of blowouts should be supplemented by capabilities of easing the consequences of a loss of control in the wells ( Board, 2012 ). Transocean needs to make sure there is timely access to well-capping and containment capabilities that have been tested and confirmed to be effective.
The Deep-water Horizon drilling rig explosion, where the blowout preventer system malfunctioned in containing the hydrocarbons that penetrated several thousand feet below the surface of the water, posed a challenge for which the company was not prepared. Apparently, there was no containment system readily available to contain the well ( Board, 2012 ). Therefore, the operator in charge had use what tool was available around the site at the moment. The operator was also compelled to use trial and error on certain improvised designs of caps, risers, and other machinery to contain the flow of hydrocarbons, channel it to floating production facilities, and finally block the flow leaving the well. The entire process continued for several months, and by the time the flow was completely stopped, barrels of hydrocarbons had already flowed into the water. This incident dramatically exposed the vulnerability of Transocean’s subsea blowout preventer systems. In the future, the company should ensure access to an effective containment system that can be promptly deployed to a well. Also, the blowout preventer system has to be improved.
Transocean should embrace the offshore drilling industry’s latest initiatives to develop highly capable containment systems in case there will be more well blowouts in the future. An example of such initiative is the well containment response system created by the Helix Well Containment Group ( Board, 2012 ). This is a conglomerate of deep-water operating corporations in the Gulf of Mexico with the aim of improving capabilities to respond to subsea spills. The member companies contribute resources and know-how to support the development of capability of quick reaction, intervention and containment.
Another notable organization with a similar initiative is the Marine Well Containment Company (MWCC), which operates in the United States gulf waters ( Board, 2012 ). Transocean also qualifies for membership because it operates in the United States. This group gathers funds to build a containment system that would be more flexible than the Helix system.
The cost that would be incurred in joining such groups is arguably high, given the level of technology that would be required to develop these systems. Regardless, the company cannot afford a more negative outlook than it has right now. Therefore, joining this groups bears potential benefits. The Helix Well Containment Group would be a better fit for Transocean given that it functions in most of the countries where the company operates ( Board, 2012 ). This would allow the corporation to implement any new technology in almost all its branches. Additionally, it is likely to gain the approval of the company’s stakeholders from all over the world.
Production Liners on the Drill Pipes
The failure of the casing to rotate or reciprocate during cementing operations may be attributed to the application of the long string of production casing. This method may be substituted so that a production liner is run on the drill pipe. The liner is hung or suspended hundreds of feet up and enclosed within the original casing. For Transocean, a 9 7/8” drilling liner may be used, and it would have to be set at 17,168 feet ( Hartley et al., 2008 ). The final step would be pumping cement through the liner and drill pipe to reach the required annular capacity.
Many times, the cement may be circulated to the top part of the liner, which may seal this point. If this process cannot be achieved quickly, a cement squeeze is done at the head of the liner. In this case, the cement would be forced into the annular cavity, which is between the liner and the original casing, thereby sealing the liner top ( Hartley et al., 2008 ). For additional efficiency, a liner top packer may be used to establish a mechanical seal at the liner top to supplement or even replace the cement seal. After these processes have been finalized, the top of the liner would have to be taken through both a positive and a negative test. These tests are conducted in a way resembling the testing of the long string to illustrate wellbore isolation from the formations on the exterior surface of the liner. Since the liner is significantly short, it is likely that the differential fill tube deployed in the float collar could have been excluded, thereby eliminating on probable failure mechanism from the float apparatus.
The costs involved in making these adjustments are relatively smaller as compared to other techniques. Additionally, implementing these changes would only interfere with normal operations for a short while, given it is less sophisticated. Using production liners on the drill pipes would allow the cement to rotate freely, thereby reducing the risk of accidents ( Hartley et al., 2008 ). It is less likely that there would be any significant effect on the company’s stakeholders because there is not much time or resources involved in this case.
Substitute Well Completion Systems for Temporary Abandonment
Though complicated or expensive, there are always alternative completion techniques and cement types available for Transocean. For instance, in the Deep-water Horizon drilling rig explosion, the rig experienced a low margin of safety between the Equivalent Circulating Density (ECD) and the fracture pressure ( Abimbola et al., 2014; USA Society of Petroleum Engineers, 2009 ). In this case, the most effective approach would be plugging the open bottom section of the well and using the geologic information to make a plan for a replacement well. Such a replacement would be a whole new well or a sidetrack out of the bottom section of the available well. If the margin of safety between the ECD and the fracture pressure required was greater, this technique should have been picked ( USA Society of Petroleum Engineers, 2009 ). Redesigning the completion would also give enough depth under the producing formations in such a way that the cement bond log can determine the presence and quality of the cement during the entire productive period.
The margin of safety used for the ECD should be sufficient while fluids are flowing to cater for instances where there may be unexpected pressure rates or surges so that fracturing becomes less likely ( Abimbola et al., 2014 ). Such a measure should be taken particularly during cement jobs whereby only small cement amounts are used because the entire amount may be lost in the event of fracturing.
Replacing a well mostly incurs a large cost, and the level of expertise required to carry it out as described is high. Implementing such a change would require plenty of time as the equipment needed tend to move slowly and there is also little room for error ( Abimbola et al., 2014 ). After the change, some of the employees would be left jobless because handling these types of wells requires specific skills. However, the likelihood of fracturing would be significantly reduced.
The nature of the accidents involving Transocean over the past several years have had an adverse effect on the company’s outlook, that is, the revenue and total assets have both depreciated. The trend in these components projects a further decline over the next few years. Therefore, there is a need for innovations within the corporation to reverse this trend. The discussion suggests three technological innovations that may be employed to restore the company’s initial position in the industry. While these innovations have different means of implementation and cost, they carry significant potential benefits for the corporation. Considering the data available concerning Transocean, the company has adequate resource to implement one or more of these recommendations.
References
Abimbola, M., Khan, F., & Khakzad, N. (2014). Dynamic safety risk analysis of offshore drilling. Journal of Loss Prevention in the Process Industries , 30 , 74-85.
Board, M. (2012). Macondo Well Deep-water Horizon Blowout: Lessons for Improving Offshore Drilling Safety . National Academies Press.
Hartley, R. S., Tolk, J. N., & Swaim, D. J. (2008). High Reliability Operations: A Practical Guide to Avoid the System Accident.
Kato, N. (2016). Lessons from Marine-Based Oil Spill and Gas Leak Accidents. In Applications to Marine Disaster Prevention (pp. 9-15). Springer Japan.
USA Society of Petroleum Engineers. (2009). Advanced drilling and well technology . B. S. Aadnoy (Ed.). SPE.
