Category Description 
Category Description
Fishing Services are used on a contingency basis when drilling a well. The purpose of fishing services is to retrieve an object, called a “fish” or “junk” from the well. This fish, or junk, maybe in the well as a result of a broken down-hole tool, drill pipe, drill bit or an object that has fallen down the well from the surface. These items cause an obstruction for drilling to progress, as the drill bit is not designed to drill out steel objects. Following fishing, services are required to remove these obstructions.
Fishing services are used at the following stages of the oil and gas field lifecycle:
There are various tools available that are run into the hole to fish an object. Each tool is designed to perform a certain task for a certain type of object lost in the well. Broad categories are 1) Catch Tools, 2) Junk Tools, 3) Milling Tools, 4) Accessory Tools.
Catch tools
- Catching tool (spear) - When a pipe must be fished, an internal catching tool (spear) is used. The tool fits inside the pipe (fish) and grips it for further retrieval, in case a fishing operation failed. The tool should be retrievable mechanically or hydraulically.
- Overshot - When a down-hole tool or pipe must be gripped outside, a tool called overshot is used in case of fishing operation failed. The tool should be retrievable mechanically or hydraulically.
- Washpipe - is a large diameter thin-wall pipe, with cutting teeth at the bottom, that mill the fish to a more manageable shape, after which drilling fluid is used to remove debris and another fishing tool used to remove the remaining fish. This is also called “wash-over operation” and used as a last choice, due to the high risk of stucking in the well.
Junk Tools
- Junk Basket is lowered to the well after the fish has been grinded. Drilling fluid would force the debris to travel towards the junk basket, after which the basket is retrieved to the surface
- Fishing Magnets are used for retrieval of any steel debris and small metal particles in the well.
- Junk Magnet is a tool that removes metal particles from the drilling fluid
- Impression Block is a tool that identifies shape, condition and dimensions of the upper end of the fish and position in the well, in order to determine next course of actions and select the right fishing tool.
- Wire-line Spear recovers damaged wireline or wire rope from the well.
Milling Tools
- Junk Mill is a tool that grinds the fish into smaller pieces
- Mills - there is various type of milling tools used for specific applications. The list of the tools is diverse and includes tapper mill reamer, cement mills, string taper mills and conebuster mills. The major difference between them is the purpose of the milling job, i.e. light vs. heavy milling, the size and shape of the milling object.
Accessory Tools
- Whipstock is a tool that allows to deviate the well directionally. It serves as a deflection tool to change the course or during a sidetrack. This tool is used less and less and replaced by bent-housing motors.
- Jars - a jar, hydraulic or mechanical, is a percussion tool that provides jarring power by releasing a stroke/piston inside the tool. The tool installed on top of the fishing assembly and provides rapid pulling force when the fishing string cannot be pulled
- Jar Impact Amplifier - a tool that amplifies jarring power
- Drilling Safety Joint is a deliberately made weakest link in the drill string, to release the fishing string from the drill pipe, if required. It is vital to have it when the fish is caught and secured, but the assembly cannot be removed from the well, due to high tension.
- Bumper subs - serves as a dampener and allows high torque and fluid circulation, when bumping up and down is required. It could be used during pipe and tubing recovery, packer retrieval and heavy milling.
The size and handling capabilities of the equipment vary and primarily driven by the well depth and the trajectory. Offshore deep-water wells need very heavy equipment to handle tubulars. Selection criteria are based on: what was lost, where it is lost, its size and shape, and, how damaged it is.
Overall costs of fishing services are very low and represent less than 3% of a well cost. However, in higher-risk operations, fishing costs may contribute a significant proportion of well cost, in particular when rig days are incurred and a fish cannot be removed for a long period of time.
Risks & Opportunities
Risks & Opportunities
Value opportunities and risks are features or requirements that may add or detract from the overall value offered.
To ensure value is maximized attention should be given to the following areas:
- Fishing Insurance - Some drilling contractors offer fishing insurance that means no rig day is charged during the fishing operation. It must be remembered that these insurance costs and is factored into the operating rate of the rig and may lead to significantly day rates where well complexity is high.
- Fishing Standby - As an alternative to "Fishing Insurance" it may be appropriate for the operator to have Fishing Service on standby offshore during high-risk operations. These operations may include: 1) Complex and folded geology, 2) Highly deviated and long laterals wells
- Fishing Personnel -Experience of fishing personnel is a critical part of fishing services, as "getting-it-right" and fishing the junk quickly from the first attempt, saves rig time to operators.
Supply & Demand Dynamics
Supply & Demand Dynamics
Demand
Demand for fishing services is driven by exploration and appraisal activities, as well as field development and redevelopment. Although used during the development stage as well, drilling and work-over (production) is a key area of application. Hence, the number of wells drilled and work-over activities are direct indicators of the demand for fishing services. Drilling activity, i.e. rig and work-over units count and utilization is the closest indicators.
It should be noted:
- Demand for whipstocks generally increases during low oil-price environment, as operators drill more re-drill wells than new ones, whereby a whipstock is used in the existing well to sidetrack.
- Highly deviated and long laterals wells are becoming a norm, which in turn increases the risk of equipment lost in the hole, hence increasing the need for fishing services
| Demand Driver (s) | Indicator |
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Supply
Two companies/suppliers have historically dominated the provision of fishing services - Weatherford and Wellbore Integrity Solutions ( former SLB / Smith business). It shall be noted, almost all fishing tools are manufactured by 3rd party vendors and not service companies directly. Those major manufacturers of fishing tools are NOV, Rubicon(Logan International) and Wenzel Downhole Tools, controlling c. 75% of the manufacturing market, with facilities concentrated in North America.
There are smaller suppliers who manufacture more basic fishing tools that are scattered around the world, with a large concentration in China, North America, and Russia. Lead times for fishing tools could be significant, especially for heavy applications, whereby a more complex manufacturing process is used.
One of the unique characteristics of this category is a high cost to enter a new market, due to diverse equipment requirements, both in type and sizes, whereby significant upfront investments are required. Hence, established service providers have a competitive advantage over newcomers, as their equipment has been depreciated over time and has been generating revenues.
Key Players
Key Players
There is a very large amount of services companies and contractors who provide fishing services and tools in the oil and gas industry. Here is the list of major vendors and suppliers of fishing and downhole tools:
1. Weatherford
2. Wellbore Integrity Solutions
3. Catch Fishing Tools
4. Rubicon Oilfield
5. NOV
6. Baker Hughes
7. Halliburton
8. Map oil tools
9. Tasman
10. Drill Mount Oil Tools
11. Drill Tech
12. Graco Fishing &Rental Tools (GravityOilfield Services)
13. Archean oil and tools
14. Catch Fishing Services
15. ITS / Parker Drilling
16. Gulf Oilfield Supplies & Services
17. WellTec
18. Mustang Services
19. Woolley Tool Inc
External Scanning
External Scanning
The market for fishing services and downhole tools is highly competitive with an ample amount of service companies of various sizes. In most cases, it is very much a commodity services market. In addition, equipment used in the segment is fairly simple, in the low-tier segment in particular. The majority of equipment is manufactured by two major manufacturers (3rd parties). Following, Buyer's are placed in a dominant position particularly for simple fishing activities.
New Entrants is High
- Moderate CAPEX
- Tools manufactured by 3rd parties
- Little product differentiation
Supplier Power is Low
- Many providers
- Need constant revenue generation
- Low tech services
Competitive Rivalry
- Highly Competitive
- Economies of scale are key
- 3rd party equipment & basic technology
- Many services providers of various sizes
Buyer Power is High
- Many suppliers
- No switching costs
- Demand generator
Substitution
- Does not exist
Cost & Price Analysis
Cost & Price Analysis
Price Analysis
Due to the relatively simple technology behind the fishing services and downhole tools, the price of steel and healthy competition, prices in this segment showed a very little price increase throughout the last several years, in some instances, exhibiting a price decline. Price for personnel, however, may exhibit a mixed trend between as experienced fishing engineers are in high demand. Overall, prices have been in double-digit decline for the last 5-7years and do not show any signs of going upward. Current oil price environment has put even greater pressure on service providers and suppliers. It is expected that the rates for the services will continue to decline, at least till the end of 2020.
Cost Analysis
3rd parties manufacture the overwhelming majority of the fishing equipment and downhole tools. Service providers build up their fleet based on requirements. In general, smaller and niche companies have a lower cost basis, but less leverage when buying equipment from manufacturers. In addition, most of the fishing tools are used in high-impact and high-shock applications, manufacturing involves high-strength and impact-resistant alloys, high-grade alloys with special heat treatment, to add in hardiness and durability.
Below are the key cost drivers:
- Steel prices - directly impact the cost basis
- Personnel costs - Some volatility, as fishing personnel are very skilled. Oil price slump and redundancies in the industry may have a smaller impact on manpower rates given the relative shortage of highly qualified fishing personnel.
- Acquisition costs - Manufacturers of fishing equipment tend to provide better pricing to those companies, who provide bigger and sustainable revenue to them. Hence, smaller and niche service providers would incur a higher purchasing cost or would have to buy from manufacturers who are less experienced.
Value Chain Analysis
Value Chain Analysis
Most of the fishing services providers do not own manufacturing facilities and procure their tool fleet and spares from three major manufacturers, NOV, Rubicon (Logan International) and Wenzel Downhole Tools. Together, these manufacturers control c. 75% of the fishing and downhole tools global market.
Total Cost of Ownership
Total Cost of Ownership
In drilling applications, fishing services and downhole tools are used on a contingency basis and would have a large number of tools and accessories on standby for every well. As such, pricing strategies from service companies are be based on high standby prices, because operating rates never take place, if no fishing job was required. On the other hand, during work-over jobs, fishing tools are utilized extensively and service companies are compensated based on operating rates.
When a large number of rig operated in relatively close proximity, building a fleet of tools to be shared between the rigs, proved to be a successful approach and highly cost-effective.
Strategy
Strategy
Category Objectives
- Secure access to the right expertise for high-risk wells
- Ensure a reliable supply of the services and equipment reliability
- If and when required, ensure competition amongst international players at all times, to drive down the cost
- Maximize local value generation in low-risk segments
- Technology transfer and local capability building in the high-risk category
- Setting up manufacturing facilities for fishing tools and consumables in-country
Category Strategies
- Effectively segregate the types ( drilling vs. work-over) and complexity of wells to match suppliers expertise
- Commercial model and structure of compensation should reflect the difference in commercial drivers between drilling vs. work-over applications
- Open competition environment in the high-risk segment
- Buy vs. rent might be an option when a large number of rigs operated. Equipment could be bought from major manufacturers with maintenance agreements to be in place and provided through local enterprises
- Limit bidders to local suppliers only for a lower-risk segment
- Explore the option of having a Fishing Insurance from a drilling rig contractor
- Incentivize local service companies to set up manufacturing plants
