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Achieving Technical Limit Performance

Enabling Technology and Empowering People

Technical Limit is a continuous improvement process that is currently finding widespread application in the drilling industry. PetrEX International has been involved in all aspects of the process on behalf of both operators and drilling contractors on a global basis for several years. While there are substantial variations in the implementation of Technical Limit from company to company and even from area to area, several foundational concepts seem to be common among those teams with successful, ongoing Technical Limit activities. We have prepared this position paper to demonstrate what we believe can form the basis for establishing a thriving, sustainable Technical Limit culture in a drilling team.

The topics addressed in this document are:

1. Background information on continuous improvement processes
2. Specifics of the Technical Limit continuous improvement model
3. Definition for "Technical Limit Time" and what it is intended to convey to the team
4. The mechanics of developing Technical Limit predictions
5. How to avoid some of the typical mistakes in Technical Limit process implementation
6. The role of leadership in the Technical Limit process
7. Steps to implement Technical Limit within a project team

Background

Since the inception of the oil and gas drilling industry, experience has been highly prized by those of us in the drilling community. Experience implies knowledge of how to achieve drilling objectives in the most cost-effective manner, how to avoid problems, and reduce risk of failure. This experience has probably been hard won, potentially the result of operating on the edge of current technology and sometimes failed innovation attempts.

Maybe you have heard the old story about the question asked of an experienced driller by a new hire on his first hitch: "What is it that helps you make good decisions?" The driller answered immediately, "Experience." The new hire continued, "Well, how do you get experience?" The driller looks at the floor and says, "From making bad decisions."

Some of us, perhaps like this new hire, were fortunate to have experienced mentors early in our careers to help us as individuals avoid some of the mistakes that they made and to wisely guide our innovation attempts. But one of our downfalls as an industry has been that their specific, local experience, upon which our companies have relied, has historically remained resident in the minds of those relatively few individuals. To the extent that they have positively influenced decisions, performance of those around them improved. The positive impact of these key individuals is expected to dwindle during the next decade as more and more retire and leave the industry. For at least the last 20 years, in an effort to improve performance on a corporate basis, many companies have been similarly striving to improve their decision-making, from the office to the field.

The objectives are deceptively simple:

1. Look for opportunities to improve.
2. Take reasoned risks to achieve improvement.
3. Build on successes.
4. Make sure to learn from mistakes.

This is not brain surgery. However, learning as an organization has proven to be much more difficult than learning as an individual. A few companies have taken a somewhat rigorous approach to this effort in an attempt to standardize the process and achieve more consistent results. Most of these processes follow variations of the Shewhart Cycle, also known as the Deming Wheel, which is one of the earliest models for organizational learning, developed in Bell Labs in the 1930's. It is this same general idea that is the basis for all continuous improvement processes we see in use today.

What is Technical Limit?

Technical Limit (T-L) is a manifestation of this simple Shewhart Cycle idea focused on drilling and completion operations. It is a continuous improvement process that provides a linked series of tools and activities that drilling teams may use to achieve the four objectives mentioned above. As the first part of the T-L name implies, the central idea of the process is to understand in detail the technical and operational procedures that will be utilized to drill the well in order to increase the probability of success. Specifically, it is an approach to project and task management that is designed to initiate a set of team-based learning processes through:

1. Interactive task and resource planning,
2. Risk assessment and mitigation,
3. Critical path analysis,
4. Time target-setting,
5. Performance tracking activities.

We will be addressing each of these later in this document.

As the second part of the T-L name implies, a primary outcome of this analysis is an indication of limiting factors within the operation. What aspects of the operation are keeping us from performing even better? How can we overcome them? A prediction of this limit, typically a time-based value, is frequently compiled from the analysis of the best conceivable performance for each of the individual tasks that make up the well plan.

During well planning, it is very common to run Monte Carlo simulations on the sequence of tasks planned for a well using various distributions of times for each task. A curve similar to that shown in Fig. 2 is a typical output of these simulations. It shows the distribution of the total times for all tasks. The most likely outcome is known as the p50 value, meaning that there is a 50% probability that actual well time will be less than this value and a 50% probability that actual well time will be greater than this value. Similarly, 90% of the actual well times will be less than the predicted p90 value but only 10% will be less than the p10 value.

The T-L time is at the far left extreme of this plot, indicating that there is theoretically zero probability that this time will be achieved. It is intended to indicate the time that would be required if the operation were performed flawlessly, with no non-productive or trouble time, no delays, no mistakes, no inefficiencies. In a word, perfection. Clearly, this must be viewed as a theoretical prediction to provide guidance regarding potential paths to improvement. We need to see what 'better' looks like so we can begin to chart a course toward it. As we make progress toward this prediction, whether through better operational planning or new technology applications, limits to performance are removed and so a new T-L evaluation would find that the 'limit' has moved further to the left. Therefore, if a T-L time prediction is actually achieved in the field, the prediction was too conservative. Also, because this prediction may never be achieved, we need to be careful that it does not demoralize the team. It is part of the continuous improvement process that we have a goal, a direction of change, and that we are always striving toward it.

Making Technical Limit Predictions

The mechanisms to develop a T-L time are straightforward as shown in Fig. 3:

1. Choose appropriate offset / analog wells
2. Determine the best offset task times
3. Assemble 'Virtual' best well from offset well segments
4. Remove documented Non-Productive Time (NPT)
5. Remove apparent Invisible Lost Time (ILT)
6. Apply new technologies and techniques to predict T-L

Offset Analysis

As with many well planning efforts, this process begins with analysis of applicable offset wells, if any, or analogous wells if available. Evaluate the time required to perform each set of tasks in the offset wells and choose the best. The list of tasks can be as detailed as the data to support it allows . Minimally, it would be preferable to have assessments of both drilling progress (ROP) tasks and 'flat line' tasks such as logging, running casing, cementing, and changing the BOP stack, as needed, for each hole interval. More detailed data may allow evaluation of individual bit runs, trips, and other tasks, possibly getting down to 15-30 minute time intervals. Assemble these historical best task time well segments into a best-of-thebest 'virtual' well time as shown above.

Remove Non-Productive Time (NPT)

Reflecting back on the definition of T-L and striving for a 'perfect' operation, a T-L prediction should not include any trouble time. As shown, all recorded NPT, such as stuck pipe, lost circulation, well control, tool failures, and rig downtime, should be removed from the historical best task times. In many areas of the world, NPT varies from 5- 30% or more of the total well time, so this could be a substantial adjustment from the 'virtual' best well. Actually eliminating NPT in rig operations is quite a tall order and even approaching this achievement requires comprehensive understanding of NPT mechanisms and detailed operational planning.

Remove Invisible Lost Time (ILT)

The next step is to make an assessment of ILT and remove it as well. ILT is generally associated with inefficiencies that occur in operations that are classified as normal (no NPT) and so can be difficult to detect and correct. Usually, the operation is making progress, but not as quickly as might be possible with a change in procedure, equipment, or technology. ILT is determined through engineering judgment of what should be achieved if the plan and the execution of an operation were optimized and so is somewhat subjective. It is very common for the time required to perform a task, even one that is very familiar, to vary within a certain range. As shown in Fig. 4, historical data might show that the most likely time for a task is 10 hours, but has taken as long as 20 hours or as little as 6 hours. Clearly, something different must be happening during the 6 hours required for the task in the best case versus the 20 hours required for the task in the worst case, but what could it be?

One issue may be measurement error. Perhaps other activities are being done at the same time and it is all called by one name. If the start times and stop times of activities are not accurately and consistently measured, it will be impossible to determine whether the actual task duration falls within expectations. If improvements are found or if inefficiencies occur, they may never be detected because the measurements are not designed to capture this level of detail. This is an issue that must be addressed within the team processes if the reasons behind a certain performance are to be well understood.

A second issue behind the task time variability could be that task procedures are not standardized. One crew follows a procedure that results in six hour task duration and another crew follows a procedure that results in twenty hour task duration. In many cases, the degree of variability surprises the crews that are assigned to do the work and they invariably want to know why. Often, a feeling of professional pride motivates them to understand the work that they do in sufficient detail so that they can do it better. It does not take a brain surgeon to figure out that the process followed by the crew achieving the 6 hour duration needs to be understood and documented so it can then be established among the other crews as 'the way to do this job'. As shown above, even if the best time is not reduced, the variability in task time is reduced, making task performance much more reproducible and predictable. A task that is understood at this level is one that has been thought completely through and can be done safely and efficiently time after time, even if new crew members are introduced to the team or the rig moves to a new project. Additionally, this level of understanding helps to clarify limiting factors and may lead to further reductions in task times.

Impact of New Technology

The final step in establishing the T-L time prediction is the application of new or 'nearly-existent' technologies or plan changes. As limits to operations are identified, certain 'what if' ideas are often generated that push the existing operational envelope. Common examples of these technology applications have been installing top drives on kelly rigs, replacing bent housing BHAs with rotary steerable systems, and adding third and fourth triplexes to improve hydraulics. The objection to these ideas is usually cost. But many times, time is traded off against cost in making these choices. In other words, we may accept longer times if we can get lower costs. Maybe the economics of the prospect are so skinny that any increase in cost could kill the project. Alternatively, we may be willing to spend more money to get faster project delivery. The economics are good enough to justify higher cost so we can deliver more wells per year or reduce the risk of failure and resulting lost time. A cost-benefit analysis can often be done based upon similar changes that may have been applied to other operations in the past. The questions then evolve from "What improvement changes are possible?" to "What can we justify?" or "How can the benefit be realized at a reduced cost?" In this case, the T-L may only be approached if the cost of the new technology aligns with the project cost objectives.

Additionally, 'nearly-existent' technologies might be applied to determine a T-L time to focus improvement efforts on specific technology developments that are perceived to be almost within reach. An example of 'nearly-existent' technology might be to drill an entire hole interval with one bit run. In some areas, bits and BHAs have been so accurately matched to the formations that this objective is achieved routinely. In other areas, certain intervals may never achieve this. However, there may be an experimental bit design that could reach casing point or a new BHA design that may allow the required trajectory to be achieved without a trip. Innovations like these are specific responses to T-L improvement objectives that may be viewed as 'stretch' goals but that also have some chance of success in the near term.

To this point in the T-L evaluations, several aggressive improvement objectives have been established, potentially including eliminating NPT and ILT plus some technology innovations. If the team wants to explore other options, any of several emerging technologies might be considered. An analogy that has been applied to illustrate this idea is determining the T-L score for an 18-hole round of golf. Is T-L the score that Tiger Woods would shoot or is it better than that? How many strokes under par on each hole would define T-L? One claim is that the T-L score for the round would be 18, or one stroke per hole. The immediate complaint is, "That's impossible!" But what if technology could be developed that allowed this to occur? The next complaint would be, "That's not fair. You are changing the game!" and that is exactly the point. Are there 'game-changing' technologies that might be employed that would provide dramatic improvements in performance? Some examples of these ideas might be elimination of drill string tripping and casing running time by drilling with casing or using expandable solid tubulars to drill monodiameter wells. These and other emerging technologies have the potential to make substantial time and cost reductions in ways not believed to be feasible a short time ago.

Challenge the Plan

Finally, besides technology changes, improved T-L time predictions might also be achieved through changes in the drilling plan. Changes that might be considered during early well strategy sessions could include issues such as changing the rig type being used on the project or eliminating a casing string in the casing program. During operational planning on the rig, changes might include eliminating or changing the order of steps in a procedure or taking procedure steps off the critical path by deploying resources differently.

Technical Limit Don'ts

After all this discussion about T-L content, an understanding of the counterpoint, what should be avoided, may also be in order.

The most widespread misunderstanding among drilling teams about T-L is that it is a drive to make them hurry. While it is true that time and cost reductions are an expected outcome of the T-L process, very clear statements and supporting behaviors by team leadership should indicate to the team that this process is not trading safety for speed. If the T-L time predicts a huge improvement but no plan has been developed that can achieve that result safely, the prediction is worthless. It can also be dangerous because someone may be tempted to cut a safety corner in an attempt to achieve that unrealistic goal. As always, the requirement exists that all activities must have been planned so they can be safely achieved. In so doing, a more detailed understanding of the task is gained and often, improvement steps are identified that result in time and cost reductions. It is an old but true saying that "We are trying to work smarter, not faster." This is accomplished by thinking through the task, clarifying limiting factors, and designing technology or process changes to safely overcome those limitations.

The critical distinction here is that the process is correctly managed by selecting and adjusting INPUTS to the process, not OUTPUTS. Control is achieved by adjusting appropriate inputs, such as common goals, objectives, work process, procedures, equipment, and people. Time and cost are outputs, the results of these efforts. If inputs have been handled correctly, the outputs will be good and improving. It is a mistake to attempt to directly manipulate cost or time and then hope that the system that produces those results will correctly align itself to efficiently achieve them in a sustainable way. Rather, the power in this process comes from continually engaging the minds of the people who are addressing the inputs (doing the work!) and so are most familiar with them. They, more than anyone else, should be able to point out opportunities to improve. It is up to the team leadership to create an environment where that input is forthcoming.

This leads to the next common misunderstanding about T-L, namely that it is a quick fix for drilling performance problems. Like all simple ideas, its elegant logic is attractive but will it be that simple to implement consistently in the field? For some drilling organizations and project teams, structured learning will be a familiar concept. These teams may adopt the T-L process quite quickly and see early benefits. For other groups, foundations may need to be laid before this type of process can be built and that can take time. These foundational issues center on certain team skills, particularly those manifested through the team leadership as discussed in the following section.

Role of Leadership

It has been observed during T-L implementations in the field that buy-in to the process by team leadership is critical to its success. This includes office-based superintendents, engineers, and managers, and especially drilling supervisors and toolpushers on the rig. This core group should have a common understanding of T-L process goals and objectives, how the process will be deployed within the team, and roles and responsibilities of team members. This level of commitment by the team leadership is often developed over a period of time as they gain experience with the process. However, they must consistently demonstrate with their behaviors their commitment to the process and their expectations of the team members. As indicated in Fig. 5, when they lead the process, the T-L tools will be used, the processes are followed, and performance improves, often dramatically.

Conversely, it has also been observed where the leadership views the process as an 'academic exercise' that has little value for field operations. They may demonstrate only vague expectations of the team members and little commitment to the process. This results in confusion, disillusionment, and lowered morale. The T-L process becomes another 'initiative of the month' and the attitude develops "If we ignore it, it will go away."

It is very important that the team leadership understand the behavior changes that are being requested of the various team members (and possibly themselves) and the role that they play in sustaining those changes. Twenty years ago, we rarely heard the word 'team' and now organizational structures and work processes based on teams are so deeply engrained in our daily work that the idea is no longer debated. The value of the contributions of people working in teams has been shown to be quite phenomenal. However, highly effective teams do not just happen. Certainly we need a balance of technical skills and competencies as we have discussed in the preceding pages. But many of these technical activities discussed so far are external to the individual. The foundation that enables these activities to flourish is internal to the individual. Essential and commonly overlooked skill sets for leaders and team members are the so-called 'soft skills' such as communication, emotional intelligence, problem solving, time and stress management, and coaching. Through application of these skills and behaviors, mutual trust is earned among team members. With mutual trust, communication flow is improved. With improved communication, higher quality decisions can be made and time and cost can be reduced. In a sense, then, maybe this IS brain surgery! We need to get into the heads of team members and change some attitudes.

Developing the desired attitudes and commitment in team leadership and team members requires an understanding that there is almost always resistance to change, even positive change. As indicated in Fig. 6, change may require coaching through several stages of unawareness, confusion and misunderstanding before it is reasonable to expect they will have a positive perception of and a commitment to the change. Even then support is beneficial to solidify the change and make it the normal way the work gets done. There are always temptations to return to the old habits of which we need to be aware.

How does this happen? As an industry, we have been striving to shed command and control leadership styles and promote a more participative work style by empowering people. These substantial improvements have required time because they are cultural changes within the fabric of our organizations. Leadership is a set of desired attitudes and behaviors. It is not a position or a title. For a team to achieve the most from the T-L process, leaders need to emerge in the office and on the rig floor, at all levels of the team. It may take years of consistent reinforcement to make genuine changes in attitude and necessary behavior changes. Ultimately, it will happen by more fully engaging both the hearts and minds of our people. Certainly one of the most important of these changes will be the written documentation of their own performance, good or bad, and their assessment of the reasons for the observed performance. These assessments are necessary if individuals on the team are going to learn and improve. The fact that they are written down allows them to be more readily shared, fed back into future plans, and recalled when needed by other team members so the entire team can learn. Their willingness to make these written self-assessments is a direct reflection of the amount of earned trust that has developed within the team. The value of the reporting may vary widely, but the act of trust exhibited in preparing and submitting the report must be recognized and rewarded. The unfortunate alternative to this desirable 'bottoms-up communication' is that both key learnings and mistakes go unreported and the leadership is forced to make decisions without the benefit of this potentially powerful information.

How is Technical Limit Implemented?

There are four major steps in T-L implementation:

1. Build the team
2. Plan the well
3. Execute the plan
4. Capture learnings

The first step has already been discussed at length. Be careful not to minimize the impact of this step in the rush to plan the well. Develop relationships among team members so earned trust is engendered and fear of reporting mistakes is eliminated. Establish a team culture of bottom-up communication, innovation, and reasoned risk-taking. Celebrate successes and learn from failures.

The process that governs steps two, three, and four is shown in Fig. 7. A multi-discipline team of engineers and geoscientists develops the set of requirements for the drilling project. Offset or analogous wells are used to predict the technical scope of the well and identify major operational risks. A strategic planning workshop may be used to develop various options for different phases of the well, including completions, trajectories, casing and hole size programs, mud systems, BHAs and drill strings, rig types and equipment, and new technology possibilities. Attendees at this workshop and the workshop agenda should be chosen to allow efficient exploration of new ideas followed by structured analysis and prioritization of these ideas. As illustrated in Fig. 8, the first effort is one of divergent thinking, characterized by brainstorming ideas and challenging existing approaches and practices. The second effort is distinct from the first effort since it involves convergent thinking processes. Here the team focuses on and evaluates the new ideas generated in the first effort, looking at cost-benefit analysis and potential risks, and prioritizes them for potential further study and inclusion in the final well plan.

This early workshop should also be used to enroll the multi-discipline team in the T-L process. They will need to understand process objectives, how the process activities support those objectives, and buy-in to their personal roles and responsibilities in making the process a success.

The outcome of the offset analysis work is a design scope which includes choices from among the various ideas and options generated in the workshop and some preliminary engineering to confirm the suitability of the option for the well. With this in hand, the basic engineering tasks proceed and the well plan is developed. As the plan matures, a meeting of knowledgeable but disinterested peers is often convened to assure that the plan is sound and possibly point out areas where further work is needed.

Prior to spud, an operational workshop introduces the well plan to the operational team, including drilling contractor and service company personnel who will be working on the project. This is an opportunity for the team leadership to enroll the extended team into the T-L process, again by explaining objectives, specific activities that support those objectives, and gaining their buy-in to their roles in the process. A second major objective of the workshop is to practice applying T-L processes to a specific drilling project in a workshop setting to identify some predrilling benefits that might be gained, get familiar with systems and activities to be applied on the rig which support these processes, and develop relationships among team members for the team to work productively, communicate openly, and continue to improve together in a sustainable fashion. The outcome of this workshop is increased familiarity with the well requirements and development of detailed operational plans to achieve them. Where appropriate, a divergent-convergent approach can be applied with a task and resource planning emphasis. This team should be very familiar with existing practices to safely and efficiently accomplish these tasks and so should be able to readily integrate new ideas and technologies when introduced and identify and new risks that may result. Critical path analysis and task procedure discussions are often useful exercises to focus the team on maximizing the use of resources and developing expected timings, especially when new ideas are introduced.

After spud, the crew should be tracking their performance against the predictions they made in the workshop. As indicated previously, the results, both good and bad, should be captured and explained so recommendations for the future can be made. Coaching in the mechanics of T-L tools and procedures may be desired while a team is gaining experience in the process. Support external to the team for these tasks should be viewed as temporary and only until the team can adopt the responsibilities themselves. In this way, T-L is similar to safety. If a team requires a 'safety coach' for a long period of time, it may be that team members have compartmentalized their work such that "Safety is the job for the safety coach. I have my own job". Teams that have developed a safety culture do not need coaches because safety awareness has been internalized into each member and engrained into their work habits. When a T-L culture has become similarly engrained in a team, there is no need for an external coach. This internalization of the T-L process, as shown in Fig. 6, should be the goal in order to achieve sustainable progress. The team will be able to work the process and improve on their own.

Finally, structured After Action Reviews (AARs) should be employed as a way to capture what the team is learning. They should be used to debrief job performance on a daily basis as well as reviewing well performance on a longer term basis so future plans can be improved. AARs can be useful formats when organizing a team meeting to help keep it focused and make sure nothing is missed.

Conclusions

Technical Limit is a simple concept that is designed to achieve a powerful goal. However, T-L should not be considered a "magic bullet" to cure all operational woes. Results may be immediate and dramatic or they may be incremental and escalating over time. In most cases implementation of the process has not been easy. There is always resistance to change. But when team members are enrolled in the process and guided by committed leadership, incredible improvements can be achieved.

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