Wells and drill holes need constant maintenance and assessment. The sector responsible for this is a lynchpin of upstream oil and gas exploration and production.
With the region’s drilling environment entering another renaissance, it’s no surprise that companies which provide the well assessment services and the maintenance of wells and drill holes are thriving.
Wireline is the cabling technology that is used along with measurement devices for reservoir evaluation and well intervention. It is a high tech industry and one which has benefited from recent investments in research.
“Technology is evolving rapidly within the field of wireline,” says Khair M Azzam, head of finance and administration, AlMansoori Wireline Services. “Now, more companies are able to provide new technologies without the monopolism that once existed in the market.”
Almost all of the major oil and gas service firms have an interest in wireline services. One such company is US oilfield services giant Baker Hughes, which is able to offer firms three different types of its open hole wireline service.
Petrophysical evaluation services focus on reducing economic risk by acquiring critical data throughout the reservoir life cycle.
Reservoir Characterisation Instrument (RCI) delivers petrophysical information to predict reservoir behaviour during production and the geology imaging services help define reservoir architecture by delivering high-resolution borehole images and formation dip data to assist optimised field development.
Baker also offers a host of other wireline services, including cased hole wireline systems and wireline conveyance.
Slickline and fishing tools are more associated with the maintenance of drill holes and wells. Downhole tools can all too easily snap off or get stuck due to malfunctions or also unforeseen conditions, meaning slickline or fishing tools are needed to allow drilling to commence. This risk is increasing in today’s HP/HT, deep drilling environment, and in areas such as north Iraq which offer complex, folded geology.
All of these areas of the oil and gas industry offer profitable business opportunities. “All markets are performing well in the Middle East and there is huge volume, particularly in terms of wireline and slickline,” explains Azzam.
Logan International is a firm which features down hole fishing tools and power swivel units as its major products. The firm has enjoyed great success in this area both domestically (it is headquartered in Houston in the US) and internationally.
“We’ve experienced a significant increase in business,” says David Jones, COO of Logan International. “There are mainly two major manufacturers and suppliers of downhole fishing tools in the market place, and Logan has experienced pretty rapid growth and an uplift from a better market and also an increase in market share.”
Logan sells products all over the world. Outside North America it has locations in Dubai, Singapore and Aberdeen. But its primary customers are the large international service companies like Weatherford or Smith, which have operations in pretty much every hydrocarbon producing country in the world.
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“We may not have bricks and mortar in those locations, but our products are being used all over the world,” affirms Jones.
Jones reports that all of the regions it is working in are performing strongly at the moment, including the Middle East. Al Mansoori is also seeing good growth in this region. “UAE, KSA, Iraq, Oman, India and Qatar are the busiest regions at the moment,” says Azzam.
Azzam also states that his company sees ADCO, Saudi Aramco, ZADCO, ADMA in the UAE and ONGC in India as its major clients.
For the manufacturers of fishing tools, Logan, major clients mostly reside in the services industry. “We’ve got a long history with Weatherford, which is one of the key fishing services companies in both North America and internationally. Smith is also a large customer of ours. We typically sell to the large service companies domestically and internationally but also will deal with the NOCs,” says Jones.
Logan also sells to drilling contractors. Almost every rig has its own kit with fishing tools. The firm provides kits which contain a basic suite of fishing tools, so companies can attempt to address any issues that they come across while they are drilling.
The Middle East market is attracting more service companies, many of which work in wireline. Aker Solutions is a leading example. Last month it was announced that Aker had agreed to acquire NPS Energy, a firm which has a strong presence in the Middle East and North Africa regions.
“We have established a new operating structure, which more transparently shows our broad range of technologies and customer offerings, and we have introduced regional management in North America and Brazil, which provides our customers with a single point of contact,” says Oyvind Eriksen, chairman of Aker Solutions. We are now ready to take this successful formula into a new region, and it is not just another region. It is the most prolific oil and gas region of the world.”
The core offerings of NPS Energy, the firm which Aker has bought, are well intervention services such as wireline.
“Today we have a strong position within well intervention services in the Middle East and North Africa region. We aim to strengthen this further by introducing Aker Solutions’ technologies, such as wire-line tractors and down-hole tools, to our existing customers,” says NPS Energy head Adnan Ghabris.
“There is also a significant potential in introducing Aker Solutions’ process systems, surface wellheads and drilling technologies, to name a few, into this region. I look forward to making that happen.”
Popular Products
For Logan, products which are the most popular in the global market are also the most simple but essential. “It’s probably the basic intervention tools, from a fishing standpoint we also have what are called jars, hydraulically activated tools that do exactly what they say – produce a jarring force to free a stuck fish down hole,” says Jones. “That’s a very popular product line for us right now.”
Meanwhile, in the slickline industry, consumers are looking for increasingly sophisticated technology. Wireline and slickline markets have more scope for technological advances which can make the drillers’ lives easier.
Azzam lists new products which clients are looking for as “air-conditioned slickline units with smart monitoring systems and memory type services i.e. memory production logging tool, production evaluation, corrosion monitoring and high accuracy memory gauges”.
In fishing, the smaller more geometrically efficient tools are the order of the day.
Like most of the different sectors of oil and gas, one of the major challenges facing the wireline, fishing tools and slickline getting the right personnel.
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Manpower
“The lack of experienced manpower is a constant challenge,” says Azzam. Jones also complains of personnel issues, but reveals other obstacles. “At this point capacity and personnel are our biggest challenges. The business has temporarily outgrown our capacity so we’re in the process of expanding, and adding additional manufacturing personnel and distribution,” he says.
Another issue is logistics. “It can be a big challenge: it’s an expensive undertaking,” says Jones. “It’s not intellectually complex, but finding the right people, the right partners, the right locations, getting the inventory there and the right inventory there, that’s easier said than done.”
Competition
Fishing tools manufacturing is not flooded with competition. “In fishing tools there are really primarily two companies that operate internationally outside of Russia and China,” Jones says.
“We’ve got fairly fierce competition with the other competitor, but outside of the two of us, there isn’t significant competition. There are people that make a few of the products within those product families but it’s a fairly limited market.”
For Logan now, the only way is up, and the way to do that is to expand.
“We’ll continue to expand, hopefully expand our market share. In regards to our down hole fishing tools product lines, we would look to add additional products to compliment our existing product lines, either through organic growth, engineering our own product lines or through acquisitions,” says Jones.
The well services sector is thriving, on the back of resurgent drilling activity in the region. However, competition in niche areas such as fishing tools manufacturing seems to be low.
This makes for an extremely profitable industry for the players in the game. Those in the wireline and fishing tools business will continue to make good, before others catch on.
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A 60-SECOND Q&A WITH Rahul Mahajan, Global Product Line Manager, Wireline Services at Weatherford
How is wireline technology evolving?
The main trend is reservoir complexity and integrated formation evaluation. A high percentage of the world’s remaining hydrocarbons are locked in carbonates (largest concentration in the Middle East). In such reservoirs, an integrated approach to formation evaluation is highly advantageous.
What are the major challenges in this sector?
In short, well complexity/Alternative Methods of Tool Conveyance. One of the challenges operators face when logging in open holes is obtaining reliable data in complex wellbores.
Longer horizontal and highly deviated wells are increasingly common; such conditions elevate the risk of tool loss, tool sticking and logging runs that do not yield reliable data, when using conventional wireline.
One answer is to employ newer, alternative conveyance techniques to obtain wireline-quality data, while minimizing risk and increasing efficiency.
In Weatherford’s case, a portfolio of ten distinct conveyance methods enables us to tailor our logging services to given conditions, and to obtain the high-quality that data operators need to make critical drilling decisions, while minimizing risk—even in today’s complex wellbores.
Gone fishing
Logan’s Most popular products in the fishing tools market
Hydraulic release overshots
The Logan Hydraulic Release Overshot was designed to aid in the recovery of a stuck fish in a horizontal drilling application where normal rotation for release is not obtainable. It requires only set down load or movement to engage the fish. Increased flow rate through the tool will cause the fish to be released. No drop ball is necessary for the tool to work. This eliminates pulling a wet string that is associated with drop ball application, or the possibility of leaving anything in the hole.
Hydraulic Wireline Jars
The Hydraulic Wireline Jar utilises a hydraulic system that permits controlled jarring in measuring line or stranded wireline operations when electrical continuity below the jar is not required. Such operations include permanent well completion services; setting and pulling gas lift valves, chokes, and other retrievable downhole tubing equipment; and cable services such as swabbing, bailing, and fishing.
