Oil Drilling Contractors

One thing to keep in mind is drilling is a unique undertaking that requires plenty of experienced personnel and tons of special equipment. Most operating companies therefore find it more cost effective to hire the experienced oil company's personnel and equipment than to keep the personnel and equipment under their own roof. So, almost everywhere in the world, drilling contractors do the drilling!

A drilling contractor is an individual or a company that owns from one to dozens of drilling rigs. The contractor himself hires out a rig and the personnel needed to run the operations for any operator who wishes to pay to have a well drilled. Some contractors are land contractors - they operate only land rigs while others are offshore contractors who specialize in offshore rigs. Now there are some operating rigs that have the capabilities to drill both on land and offshore which contractors operate. The drilling company may be small or large; it may own rigs that drill mainly in a local area or it may have rigs working al over the world.

Regardless of its size, a drilling company's job is to drill holes in the earth. It must drill holes to the depth of specifications set by the operating company who is also the well owner. An operating company usually invites serveral contractors to bid on a job. Oftten times the operator awards the contractor to the lowes bidder but not always. Sometimes a proven work record may also override a low bid.

The process usually goes like this: An operator usually sends a proposal to several drilling contractors. The proposal describes the drilling project and requests a bid. The contractor then fills out a proposal and sends it back to the requesting operator. If the operating company accepts the bid, it becomes a contract between the two entities. The signed agreement obviously states the services and peramitors required for the drilling project.

The International Assciation of Drillng Contractors (IADC) is an organization whose membership is made up of drilling contractors, oil companies, and service and supply companies with an interest in drilling. Its headquarters are in Houston, Texas and has offices worldwide . They provide services not only to the United States but throughout the world as well. Their mission is to "promote a commitement to safety, to preservation of the environment, and to advances in drilling technology."

Most contractors are paid for the work their rig and crews do. The payments can take place various ways as well. Operator can pay contractors based on the daily costs of operating the rig, the depth to which they drill in feet or meters or on a turnkey basis as well. If the contractor is paid according to the daily costs of operating the rig, it's a daywork contract. If the contract calls for the contractor to be paid by the number of feet or metres drilled, it's a footage or meterage contract. Obviously, if it's a turnkey contract, the drilling contractor is responsible for the entire drilling operation. Daywork contracts are the most common!

Heartland Energy Colorado is one of the top hydrocarbon-based energy providers in the USA. They have many drilling locations throughout the country and remain one of the top producers of US oil & gas companies. For more information on Heartland Energy Colorado, see Heartland Energy Development Corporation online.

(Source: "Energy for the 21st Century," Nersesian)