Toward a Methodology for Determining the Cost of Well Drilling under Conditions of Economic Reform

TOWARD A METHODOLOGY FOR DETERMINING THE COST OF WELL DRILLING UNDER ECONOMIC REFORM

A. A. BUDNIKOV

(Presented by the scientific seminar of the Research Institute of High Voltages at TPI)

The annually increasing volumes of drilling work in the exploration and extraction of minerals require close attention to questions of reducing their cost. The main directions for reducing the cost of the work performed, as is known, are technical progress, the scientific organization of labor, the steady reduction of the materials used, and also the improvement of the system of management, planning, and accounting.

The existing methodology for determining the cost of well drilling, both in planning and in accounting for work actually performed, by summing costs according to their elements has a number of obvious shortcomings, the chief of which is that it practically does not stimulate the development and introduction of new equipment into drilling practice. Thus, the methodology for planning and accounting for the basic expenses of drilling wells by calculation provides for taking into account the costs associated with the operation of equipment practically in two items: “depreciation” and “services of outside organizations.” Moreover, any expenses connected with the process of drilling wells are entered under the latter, beginning with the repair of any equipment and ending with transport costs, although such an item exists separately. In this connection, in fact, there is no possibility of identifying an approximately correct picture of the actual costs associated with the use of one or another type of drilling equipment. Enterprises that operate drilling rigs often know only one economic indicator for them—the amount of depreciation deductions—without going into its magnitude, since any amount is automatically included in the drilling cost plan.

It is known [1] that the composition of the technical-and-economic characteristics taken into account when choosing the most effective method of drilling may vary depending on local conditions; however, in all cases the most economical method of drilling should be considered the one that will ensure: a) a high-quality solution of the geological task within the established time limit and b) the lowest unit costs for carrying out drilling and the work associated with it.

Taking into account that drilling equipment, unlike machine-building equipment, is intended for performing one specified task, it would be more expedient to evaluate its operation by the cost of machine—

hour, in which all expenses associated with the operation of the equipment are included. By its magnitude, guaranteed by the organizations that design, manufacture, and sell drilling equipment, one may judge the progressiveness and promise of drilling rigs intended for drilling wells under specific mining-and-geological conditions.

In general form, the sum of the basic costs of drilling 1 linear m of a well may be expressed by the following formula:

\[ C=\frac{\left(T_{\mathrm{p}}+\frac{L}{V_{\mathrm{m}}}\right)C_{\mathrm{m-h}}+Z_{\mathrm{p}}+M_{\mathrm{e}}}{L}+M_{\mathrm{p}}, \]

where

\(C\) is the sum of the basic costs of drilling 1 linear m of a well, rubles;

\(T_{\mathrm{p}}\) is the time spent on equipment maintenance and auxiliary operations, hours;

\(L\) is the well footage over the period of time for which the given \(V_{\mathrm{m}}\) is ensured, m;

\(V_{\mathrm{m}}\) is the average mechanical drilling rate, m/hour;

\(C_{\mathrm{m-h}}\) is the cost of one hour of operation of the drilling rig, rubles;

\(Z_{\mathrm{p}}\) is the basic and additional wages of the drilling crew, rubles;

\(M\) is the material and energy costs caused by the drilling process and dependent on its speed, rubles;

\(M_{\mathrm{e}}\) is the material costs standardized per 1 linear m of well (not dependent on drilling speed).

It follows from the formula given that the first term of the given sum of costs is determined by two principal characteristics of the rig: its productivity and the cost of its use. Productivity, in turn, is also determined by two factors: the time spent on the main operations, during which, under the given mining-and-geological conditions, it is capable of ensuring the greatest rate of penetration \(V_{\mathrm{m}}\), which determines the degree of perfection of the equipment, technology, and organization of labor, and also the time \(T_{\mathrm{p}}\) required for equipment maintenance and the performance of auxiliary operations.

The cost of using the rig \((C_{\mathrm{m-h}})\), or the operating expenses for its maintenance over a specified period, will consist of the sum of the following costs:

\[ C_{\mathrm{m-h}}=A+R+E+M_{\mathrm{v}}+Z_{\mathrm{v}},\ \text{rubles}, \]

where

\(A\) is depreciation expenses for the machine;

\(R\) is expenses for its current repair;

\(E\) is expenses for the installed capacity of electric power units, maintenance of the high-voltage network, and energy for internal-combustion engines;

\(M_{\mathrm{v}}\) is expenses for auxiliary materials;

\(Z_{\mathrm{v}}\) is the wages of auxiliary workers and technical-supervision personnel servicing the machine.

As can be seen, both characteristics of a drilling rig are determined by the equipment manufacturer, first of all by its designer and manufacturing plant. They guarantee a qualitative complex characterizing all aspects of the drilling rigs being offered. The principal indicators of this complex include:

1. Reliability, ensuring optimal use of the working-time balance, since the smaller the percentage of time expenditures

for auxiliary operations and equipment maintenance, the more time it works on the principal operations of rock destruction and the greater the interval of well drilling it provides.

1. The price that determines the expenditures for its depreciation should be established centrally, since the lower the price, the smaller the amount of depreciation charges. The trend, noticeable in recent years, toward an increase in depreciation charges due to the rising cost of drilling rigs [2] cannot be considered justified.

2. Maintainability and the most appropriate structure of the repair cycle with a longer inter-repair period, ensuring minimum expenditures on minor repairs of rigs and their maintenance, as well as a reduction in expenditures on auxiliary materials and wages of service personnel. Theoretical planning of these expenditures for similar drilling rigs can be carried out according to the well-known methodology of L. V. Bartashev [3].

3. The specific energy intensity of the process, since the lower it is, the lower the expenditures per installed capacity.

As for the remaining components included in the first formula, their magnitude depends mainly on the consuming enterprise. The determining factor here is the qualification of the personnel operating the drilling equipment, their ability to use the equipment up to its rated capabilities, observance of the specified technological regimes, and careful treatment of the consumption of the necessary materials.

A positive example of successful work, as well as proper planning and accounting of cost indicators in well drilling, may be provided by the experience of the Vasyugan oil-exploration expedition of Tomsk Oblast, the results of which have been published [2].

REFERENCES

1. V. M. Vinnichenko. Organization and Planning of Geological Work. Nedra, 1968.

2. S. P. Syurakshin, A. V. Golubovsky. Experience in high-speed drilling of well No. 162 at the Luganets field in Tomsk Oblast. Drilling, 1969, No. 1.

3. L. V. Bartashev. Technical and Economic Calculations in the Design and Production of Machines. Mashgiz, 1963.