Solids Control and Waste Management is the process of managing, treating and disposing of waste generated during the drilling a well in particular cuttings and drilling fluid (mud). Depending on the mud system used waste generated can be highly toxic. Appropriate Solids Control and Waste Management practices can significantly lower the amount of waste and its toxicity, as well as the negative effects waste, can have on the well and down-hole equipment.
In general, the waste management strategy is a stage ladder process, whereby reducing the waste at its source is the first option, followed by recycling, and finally treatment and disposal. The subcategory consists of two major areas: 1) Solids collection and control and 2) Waste Treatment and Disposal.
SOLIDS COLLECTION AND CONTROL - is a process of separating solid rock particles in the mud generated by drilling, cleaning the mud, and recovering the mud before returning it back to the system. Depending on the application and mud system used, solids collection and control equipment is comprised of:
- Mud Tanks - mud storage and mixing
- Shale Shaker - separates big solids, as a first stage separation
- Desander - separates medium-sized solids
- Desilter - separates small-sized solids
- Mud Cleaner - a combination of desander and desilter
- Vacuum degasser - separates the air from the mud
- Conveyance System (auger) - transports cuttings on the rig, normally offshore
- Decanter Centrifuge - high-speed & variable-speed centrifuges are required when drilling fluids requires further processing to provide a higher mud recovery rate and comply with stricter environmental standards. Decanter centrifuge can also recover up to 90% of the barite that can be re-used.
- Mud Cooler - to cool the drilling fluid, mostly used in oil-based mud and high-temperature applications
- Cutting dryer - ideally vertical, this device reduces liquid content in cuttings to below the 5% mark. Shakers, mud cleaners and centrifuges would leave cuttings with liquid content on between 10% to 15%.
- Dewatering Unit - allows removal of the fine solids (less than 5 microns) from the water-based drilling fluids, using chemical processes.
- Cuttings collection & transportation system - is a closed-loop system providing a vacuum or pneumatic powered conveyance to transport cuttings for a relatively long distance, e.g. from an offshore drilling rig to a supply vessel.
- Drill Cutting Boxes are small open containers/skips that are used to transport cuttings from drilling rig offshore to the shore base for further treatment and disposal. Depending on the drilling speed, solid equipment on the rig and distance to shore, the number of skips ranges from 150 to 350 per rig.
WASTE TREATMENT AND DISPOSAL is the process of management and disposal of waste generated by drilling fluid and drill cuttings, after the solids collection and control phase. Depending on the mud system used and initial treatment, the water content in cuttings and its toxicity may still be high and further treatment could be required, prior to the final disposal. This stage is not always present and there are instances when non-toxic waste is disposed of immediately. Oil-based mud and synthetic-based mud are considered to be toxic and must go through a treatment and disposal process. There are various options to treat and dispose of the waste and the selection criteria are driven by 1) regulations; 2) costs, 3) type of waste, and 4) what equipment is available. The options available are:
- Cuttings Re-injection (CRI) is used for re-injecting drill cuttings back to the reservoir through separate disposal wells, old non-producing wells or existing production wells. This process returns drill cuttings to its native environment and does not produce any pollution. This is the only on-site, permanent disposal method that is in full compliance with environmental standards. In certain applications, cuttings re-injection is a more cost-effective solution, when compared to skip-and-ship and onshore treatment and disposal.
- Thermal desorption is a process of indirectly heating the waste to increase the volatility of contaminants that frees them from the solids matrix and evaporates them from the cuttings. This, in turn, removes oil and other toxic materials from the processed cuttings and provides less than 0.1% of oil-on-cuttings content, to allow further disposal (landfill and land farming) or recycling (road spreading, construction materials or restoring coastal wetlands). Thermal treatment is the most effective technology to process the waste generated by oil-based mud systems. Current days, technology allows in-situ processing using TCC RotoMill technology with full disposal offshore, given the space and power capacity on the drilling rig allows the installation of the equipment. This completely eliminates the requirements of transporting waste to shore for further processing. Two major types of technology are used: 1) Thermomechanical, whereby friction is the source of heat and 2) Thermal Phase Separation, where propane, natural gas or diesel, combusts in the burners to heat up the cuttings.
- Fixation / Stabilization / Encapsulation used mainly with water-based mud. The technology converts liquid and slurry waste into dry and solid materials with high structural integrity. Materials and chemicals such as calcium oxide, cement, fly ash, mica, and lime are used to treat drill cuttings and encapsulate them. Stabilized drilling waste has been used as a material for road foundations and backfills for earthworks. Although there are some limitations, this method has been approved and successfully used in various locations. Because of the equipment footprint, it has never been used in offshore locations.
Dewatering is a chemical and mechanical process that is used to recover water from the mud and return it back to the drilling fluid.
The table below shows the various attributes and characteristics of available cuttings management strategies.
The cost of Solids Control and Waste Management is largely dependent on the type of mud system used and the life span of the facilities. For example, the costs of a dedicated thermal plant that can reach as much as US$20M can be spread over many wells.
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;
- Effective Solids Control - Being able to effectively control solids (i.e. separate water and cuttings from the mud) has a huge impact on cost efficiency. Removal of liquid from the mud not only lowers the transport costs due to the smaller volumes but maintains the rheology of the mud and thereby reduces the need to add more mud products to maintain the mud during drilling operations
- Drilling Process - During various solid control processes drilling efficiency must be matched with the number of skips available. Where this is misaligned drilling may be slowed resulting in significant additional costs. Likewise during Waste Management, in particular, re-injection applications, the rate of injection must match drilling efficiency or again significant costs may be incurred
- Technology - New technologies continue to appear on the market advancing companies' ability to manage waste and lower cost. Examples such as Ennox Green Extraction (EGX) and MIhave been developed in the last decade
- Mud Selection - Mud selection has important implications for the selection of the Solids Control Process as well as the Waste Management process. Mud selection must be carefully considered alongside such to ensure the most effective combination is utilised.
Supply & Demand Dynamics
Supply & Demand Dynamics
Demand for Solids Control and Waste Management services is directly driven by drilling and well intervention activities, as well as environmental regulations. North America is the largest segment accounting for around 40% of the global industry size, followed by Europe and Asia Pacific. These 3 regions account for more than 70% of the global segment. The Middle East is one of the smallest areas, accounting to less than 5% of the global market.
Primarily as a result of tighter environmental regulations, the demand of the services has been growing significantly, over the last several years. Type of drilling fluids used, location (offshore vs. onshore), well depth and footage drilled are the key factors in establishing the growth opportunities.
Between 80% to 90% of drilling waste management is generated by onshore projects (driven by North America). However, over the next several years, offshore waste management is expected to show a significant growth rate.
in the long term, Middle East will generate strong demand due to increasing activities in:
- Fields redevelopment
- Increased footage drilled
- Well intervention operations due to ageing wells
- The shift from vertical drilling to horizontal drilling and utilization of oil-based mud in high H2S and high-temperature fields
Supply of Solids Control and Waste Management services consist of equipment and personnel. Major service providers have been MI SWACO ( SLB) and Halliburton, followed by TWMA, Scomi Oiltools, Brandt ( NOV) and smaller niche companies. Equipment is available in the market and in most cases, manufactured by 3rd parties. Engineering support and experience are the key differentiators between service providers. In addition, due to strict environmental regulations, there is little competition when it comes to complex applications that require multidisciplinary knowledge and experience.
This is very a competitive market in solids control equipment segment, but more complex and less competitive in waste management segment, whereby a multidisciplinary knowledge and experience is required.
Cost & Price Analysis
Cost & Price Analysis
Over the last several years, the demand for Solids Control and Waste Management was fairly stable with high growth in waste management in particular. However, the 2020 oil price downturn, global requirements for Solids Control and Waste Management hampered, due to a reduction in activities. In the near term, this will put pressure on services companies and manufacturers to maintain reduced prices.
Since Solids Control and Waste Management equipment is primarily made of steel and electrical components, steel prices have a significant impact on the solids control equipment segment. Prices in waste management are less prone to changes by steel prices, due to proprietary nature, the complexity of equipment and slightly less competitive environment. Price for personnel, however, may exhibit a mixed trend, depending on the region and application.
Prices for equipment are expected to stay where they are or may demonstrate a marginal decrease for lower-tier and standard equipment, as a result of reduced demand.
The majority of the components in Solids Control equipment are steel, electrical and instrumentation, with steel contributing more than 70% material composition. Key cost drivers are:
- Steel prices - directly impact the cost basis
- Personnel costs - little volatility, solids control personnel is a medium skills job where rigid instructions are followed. However, in more complex and environmentally sensitive applications engineering support is critical, hence requires highly qualified engineers and may cost double.
Value Chain Analysis
Value Chain Analysis
Key manufacturers of solids control equipment
- NOV / Brant
- MI SWACO
- GN Solids Control
- Flo trend
- Alfa Laval
- Fluid Systems
- Derrick Equipment Company
Total Cost of Ownership
Total Cost of Ownership
Generally, most of the Solids Control Equipment is purchased by operators or more common, installed on drilling rigs. Waste management though, normally procured as part of waste management services. Depending on the complexity of equipment, day rates, operating rates, monthly rates, and standby rates are ways to charge for the services. All consumables are based on a direct purchase.
When OBM / SBM mud is used and treatment facilities are required, incentivizing contractors to be more efficient and pay for the output, proved to be highly valuable to operators. E.g. a monthly rental fee with a processing fee per ton of drill cuttings would incentivize service providers to be reliable and efficient in processing the cuttings - the more they process the more revenue generated. The benefits for oil companies include efficient utilization of resources ( vessels, tanks) and not paying for inefficient processes ( when only monthly fee paid).
Other Factors to consider:
- Pricing approach. Consider having equipment rental based on 1) standby and 2) operational rates (processing rates per ton of cuttings when treatment is used). There is a great degree of uncertainty for service companies on the utilization of equipment, hence guaranteed standby and the operating rate will remove most of this uncertainty, thus result in lower total cost to operators.
- Integrating Solids Control and Waste Management with drilling fluids management will ensure efficient recovery of mud products, which in turn will decrease mud costs and the costs of cuttings disposal.
- Cost to change from one contractor to another, specifically when units are stationed and require installation work that may result in excessive standby costs (e.g. offshore drilling rig).
- Recovery of base oil is one of the key challenges for many companies. Selecting the base oil that desorbs at a lower temperature makes the recovery process less energy-intensive, thus less costly.