Stop, Reactivate and Listen
The medical definition for reactivation is “to restore the ability to function or the effectiveness of.” For hundreds of rigs in the world waiting their turn to be brought back online the question remains as to what that cost could be; depending on the age, class, and size of the rig it could be in the range of $5M to $50M. As oil rises to the mid-50’s again many are reluctant to plan ahead for reactivation. Even if the company decides to sell the rig it will require some reactivation to move the asset from a stacked location to a scrapping yard. This cost is often forgotten in the midst of stacking or deactivating a rig to save as much cost as possible. To understand reactivation lets go back to the beginning. The most common terms for deactivating a rig is cold stacking or warm stacking – this isn’t referring to a stack of pancakes but how the rig is deactivated. In a cold stack, the rig’s equipment is completely brought offline and usually set up in a dock with little or no people onboard the vessel. However, a warm stack is when the unit still has a minimal crew onboard to maintain and keep equipment periodically being run and is usually anchored (parked) in shallow waters.
A few important elements for Rig Reactivation Planning (whether the platform or mobile drilling rig has been cold or warm stacked):
- Current State –
- Was it cold stacked or warm stacked? This is an essential starting point to determine how much work is involved in getting the rig back to work.
- Maintenance History and Forecast? Many are delaying projects at the moment and need to ensure they aren’t forgotten when starting the rig back to work to ensure reliability.
- What is in the warehouse (inventory)? Has there been a physical count and do you have enough stocking levels to get back to work plus a little extra?
- Client Considerations –
- The length of the Contract and Where? Working in certain countries doing Completions, Drilling or Workover work and certain provisions to the contract.
- Any additional equipment needed to get back to work? For example, you might need to install MPD (Managed Pressure Drilling) equipment to get a contract.
- Vendor and Manpower Sourcing -
- Contract Labor – Perhaps it makes sense depending on the country or region of work to get contract labor as opposed to direct hires, this makes sense for short-term contracts of one or two wells also.
- Manpower – Likely you don’t have adequate personnel to crew an entire rig within the company but want to ensure you have the right experienced and trained (up-to-date certification) personnel to get back to work
- Operations and Project Management –
- Scheduling – In order to have a realistic plan in place you need a plan with realistic dates which show you the critical path as well as risks which could impact your rig returning to work (i.e. – weather, lead-times, etc.)
- Commissioning and System Integration Testing – Treat going back to work like a shipyard – ensuring you do considerable amounts of integration testing which could identify problems prior to getting back to the Client's location. This can also be discussed with the Client to build a good relationship from the beginning with clairvoyance.
- Certification and Compliance -
- Class/Flag Status – Any outstanding Class (DNV, ABS, etc.) items which need to be considered.
- Regulatory – Depending on which country you work in, there could be an extensive amount of work to get your rig ready – Australia (NOPSEMA) and USA (BSEE).
As you can see the list really requires input from all departments (HR, Engineering, Operations, HSE, Maintenance, Supply Chain, and Marketing) working together. There are several companies out there getting involved in the project and execution side of the rig reactivation business but as we all know the real savings are in the planning phase. If someone has a well thought out plan which takes into account, all elements (like a checklist) then your execution will run smoothly without much risk and more importantly without incident. In the market today, considering going back to work isn’t on many people’s mind but continuing to save money is. What needs to be considered is that everyone wants to return to work and we need to be cognizant of the rig reactivation planning to make that happen so we can have the best chance to perform safely and efficiently right out of the gate. Although the future may be looking a little brighter we all need to be prepared for getting out of the downturn…