Rig Strategy for Hild Field Development

Master's thesis in Industrial EconomicsThe purpose of this thesis is to look into and make a new form of incentive scheme that could be used for a drilling rig contract at the Hild field development. Total E&P Norge and their partners are in the starting-phase for developing the Hild field in the Norwegian Continental Shelf. This thesis describes and follows this tender process for getting a suitable Heavy Duty Jack-Up rig to drill the wells at the Hild field commencing the second quarter in 2014. The focus with the incentive scheme is to get the drilling contractor to collaborate with the operator with operating a high efficient rig and motivated crew under the drilling operations, in order for the operator and its partners to save time which implies reduced cost tat is to be shared with the drilling contractor on the basis of a bonus paid for achieving defined target and objectives. Rig hire and the cost of drilling services comprise the main costs in drilling operations, where drilling costs have increased sharply in recent years. Since 2001 there has been a substantially decline in the measured drilling efficiency on the Norwegian Continental Shelf, where the efficiency has dropped from 102 meter per day to 80 meter per day at present. This has lead to sky high drilling costs, given the lower drilling efficiency and the high rig rates. When there is a shortage of rigs, it is important to utilize the rig time as efficient as possible. One way of making this possible is by using incentive schemes between the operator and the drilling contractor, in order to motivate the contractor and the drilling crew to increase the efficiency of the drilling operations. Introducing the drilling contractor to an incentive scheme that could lead to an improved collaboration between the parties, common goals and rig efficiency is the main goal of this proposed incentive scheme and this thesis.Total E&P Norge A