Some time ago an unusual paper popped up at a Society of Petrophysicists and Well Log Analysts conference. “Technical and Commercial LWD Challenges for Service Companies in Crossing Multidisciplinary Boundaries” is unusual in that it is co-authored by representatives of the three largest competitors in LWD: Jeremy (Jez) Lofts, Baker Hughes INTEQ; Ron Deady, Sperry Drilling Services; and Sonny Johnston, Schlumberger.

If all three of these companies agree on something, it’s worth noting. The challenges they describe have not changed since the paper was published.

“In technical terms, [operators] are encountering increasingly complex drilling and logging environments. In commercial terms, service providers fund a major portion of the industry’s research and development (R&D) activity and must be financially competitive,” the authors say. They elaborate in the following excerpts from their paper.

“Over the last few years, the increase in complexity and acceptance of LWD measurements has repositioned them from ‘nice to have logs’ to the logs of record for serious decision-making. This, coupled with the explosion of raw data acquired while-drilling and the ability to move, process and place that data into an interpretive environment, has presented a challenge to use data effectively in real time.

“With the mainstream use of rotary steerable systems (RSS) and novel directional and drilling optimization information, the LWD bottomhole assembly has become part of a total drilling and logging system where technical and operational requirements must be understood to be of optimal value for decision making. The service company challenge is to provide the support and operational background to all of the decision makers to ensure the best possible outcome.

“LWD logging speed is controlled by the drilling process through rate of penetration (ROP). The impact of faster ROPs can be summarized in two major areas: time sample rate and nuclear precision. LWD measurements are recorded in time downhole and later merged with a depth file at surface. The scan rate or time sampling, combined with the ROP, determine the number of measurements per foot recorded on the log. The faster the ROP, the faster the scan rate needed to maintain the same depth spacing. As the scan rate increases, so does the tool memory requirements to maintain the same operational hours.

“Faster logging speeds affect nuclear measurements more than any other basic petrophysical measurement, the primary effect being on precision because of the measurement’s statistical nature. LWD imaging tools now play an increasing role in advanced formation evaluation and geological dip characterization, particularly in high angle and horizontal wells. LWD resistivity imaging tools do not suffer statistical problems of nuclear tools. As RSS ROP continues to increase, both operators and service providers will continue to address log quality issues like tool scan rate, memory and nuclear precision and depth accuracy.

“Another technical challenge that has coincided with more advanced LWD development and increased acceptance is the evolution of the asset team. For the most part, the asset team has become the norm, bringing together a multidisciplinary group that includes G&G (geology and geophysics), drilling, reservoir and production engineering to more effectively focus and efficiently execute. However, conflicts can arise between the drilling and G&G objectives, which can affect LWD planning and communication. When service representatives find themselves in a facilitator type role, organizational and operational challenges can result.

“One commercial challenge of LWD technology is its return on investment (ROI). From the operator perspective, LWD data acquisition invoices for a quad combo service, per well, are about twice that of wireline. From the service provider perspective, the capital employed to acquire quad combo data from a three-hole section well is three to five times higher for LWD than wireline. Additional LWD costs include extra personnel to operate longer LWD jobs; increased depreciation schedules from higher replacement frequency; and added costs for repair and maintenance as well as logistics and shipping. The higher invoice is offset by these higher costs. To improve value and ROI, LWD service companies will need to increase revenue generation while introducing new technology and innovation to reduce operating costs.

“Another commercial challenge is shrinking operator R&D spending. A similar trend is evident in the growing gap of patents issued to service providers compared to operators. Lower operator R&D funding is not necessarily negative, but the increasing service provider spending and innovation in formation evaluation measurements and conveyance techniques is at risk because they are costly to develop and commercialize. The challenge will be how to close the gap. To achieve a profitable balance, service and operating companies will need to work together to make the business case for new technology viable.

“The issue of wide-scale bulk tendering and the question of whether it brings value to the operator are other commercial challenges. Wide scale bulk tendering often results in the exclusion or limitation of ‘value providing and game changing’ new technology.”

Interesting stuff. These are serious challenges; meeting them successfully will be a big victory for the industry.

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