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Message from the Machine

Who are we ?• Worldwide leader in the design, manufacture and sale of equipment and

components used in oil and gas drilling

• The provision of oil field inspection and other services and supply chain

integration services to the upstream oil and gas industry

Established: 1841NYSE: NOVEmployees: 60,000Revenue (2012): $20b

Not just the Oil Field…

• We solve really big problems

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So what does that mean ?

• Condition Monitoring

• Condition Based Maintenance

• Predictive Maintenance

• No way.. Not in the drilling

industry !!!!

Message from the machine….

The challenges we face

• Extremely Remote Locations

• Extremely Rugged (Rough Neck Proof)

• Low Connectivity

• Extremely Expensive when things break

• Antonov AN 124 rented to fly equipment

• Technology Averse (unless it turns to the right !)

• Tried and Failed a few times… No Trust it will work…

Why can’t we (Drilling Industry) do it ?Automotive

100 + prototypes, 30 cars at each pre-production

Airlines747 Example – Redundancy of Systems. Collaboration of partners

ProductionBeen doing it since the 80s, no moving assets, but similar asset classes

Aerospace (NASA)Only one chance, it has to work – Testing simulation and softwareThis is the model NOV plans to replicate – Data Analysis, Correlation Analysis

Why we should be doing it ?

• Current Day Rate : > $500,000

• Typical Downtime on a fleet : 4%

• Annual Downtime for a 10 Rig Fleet: $72,000,000

• If Downtime is reduced to 3.75% from 4%: Savings of $4,500,000 / yr.

• That goes to the bottom line…

• Or increase Revenue by $18,000,000 @ 25% OP.

• Now imagine Spread Costs which is over twice those numbers

It’s not just the financial impact!

• Incidents in North Sea, Alaska, Gulf of Mexico

• We are all responsible

Maintenance Savings• Condition Based not Calendar Based

• Extend Maintenance Schedules

– Standard - 4 oil changes by 12000 miles

– New – 1 Oil change at 10500 miles

– Translate that to a fleet of 100 rigs x 3 engines or more

IADC/SPE 128865 - How do we do this ?

Specifications

• Continuous Torque 105,000 ft.-lbs.at 130 rpm

• Horsepower 2 * 1340 HP

• Max Speed 250 rpm

• Break-Out Torque 150,000 ft.-lbs.

• Static Load 1,250 Ton Hoisting• Drilling Load 1,226 Ton Rotating

One company … unlimited solutionsTorque Speed Bearing Life

Criticality Top Drives & Blow Out Preventers

Process• Analyzed Failure Data

– Over 5 Large Offshore Drilling Contractors

– Maintenance Data

– Operational Data

• Criticality of the failures

• Probability of Failures

• Consequence of Failures

• Why can’t we stick a sensor on there ?

Top Drive Boundary Diagram

Detailed Breakdown of Failures

TDS-5 41778Planned Service   Pipe Handling; Top DrivesGEARBOX OVERHAUL & ELECTRICAL REPAIRS OF VARCO TDS-5H W/PH-85 Pending A 7684 2009-07-01 01:26 AM 1

PS2-650 41780Planned Service   Mud Pumps; Drawworks; Top Drives Change out 400 CPU on MP/SCR and DW/TP PLC`s ClosedIN-15900-SUP R4115 2010-06-29 03:41 AM 1

HPS-03-1000 41782Failure gearbox--Top Drive HPS 1000 2E AC KT - Top Drive HPS 1000 2E AC KT - T4111

Deep Driller 2 are experiencing knocking noises in the gearbox when operating in low gear (glovia order WO/ NOV-41782WS) Pending   2010-06-22 02:34 AM 1

TDS-11 41797Support (I&C, survey, etc.)   Top DrivesAssist with repairing TDS-11SA electrical short and possible fire on the TDS11SA top drive. Closed   2009-07-21 07:36 AM 1

HPS-03-1000 41800Failure Motor--Top Drive HPS 1000 2E AC KT - Top Drive HPS 1000 2E AC KT - T6309

West Polaris request new AC motor for the top drive, they don't get in touch with their sales contact. Closed   2009-07-07 12:41 AM 1

TDS-11 41801Support (I&C, survey, etc.)   Top Drives Customer request TDS survey for install Closed CS41801 2009-07-30 09:46 AM 1

TDS-11 41802Support (I&C, survey, etc.)   Top Drives Customer request TDS survey Closed CS41802 2009-07-30 08:45 AM 1

TDS-4S 41804Failure Control Control Systems; Top Drives Drive house CPU is going into SF ( System fault ) Closed   2009-08-18 04:20 PM 1

TDS-3 41810Support (I&C, survey, etc.)   Top Drives

Disassembly Inspection and Repair of Hydraulic Lift Actuator Cylinder & Hydraulic Torque Cylinder for TDS Closed

DSW/5800, WO# 21374 2009-10-06 01:28 AM 1

TDS-8S 41812Support (I&C, survey, etc.)   Top DrivesINSPECTION AND OVERHAUL OF VARCO TDS8 SA TOP DRIVE Closed

DSW/5801, WO# 21376 2010-03-16 02:48 AM 1

PS2-500 41813Failure IBOP Top Drives Trouble shooting of IBOP indication Lamp Closed453/DSO/7270 2009-07-02 01:08 AM 1

IDS-4 41820Failure Hydraulic Mud Pumps; Top Drives Issues with top drive when 3 mud pumps on line. Closed   2009-07-03 03:44 PM 1

TDS-9 41823Support (I&C, survey, etc.)   Top Drives; Iron Roughnecks

To prepare the accidental report of TDS, AMC of TDS, also to perceive ST-80 operation and maintenance. Open

458/DSO/7270 2009-07-02 06:49 AM 1

TDS-11 41824Support (I&C, survey, etc.)   Top Drives Start-up and commission top drive Closed   2009-08-24 01:35 PM 1

TDS-6 41831Failure Control Top Drives Top Drive RPMs not reading correctly Closed   2009-07-07 05:23 AM 1

TDS-11 41845Support (I&C, survey, etc.)   Top DrivesComplete TDS-11SA Top Drive commissioning in the Patterson Victoria Yard. Closed   2009-07-20 09:20 AM 1

TDS-11 41848Failure Control Top DrivesChange out Off-Drillers-Side Motor on the TDS-11 shipped in from NOMAC 3. Closed   2010-05-21 02:19 PM 1

TDS-6 41866Support (I&C, survey, etc.)   Top Drives Removal of TDS-6 for repair and storage. Closed   2010-01-06 09:50 AM 1

TDS-11 41870Support (I&C, survey, etc.)   Top Drives Commissioning TDS-11. Closed   2009-07-09 07:14 AM 1

TDS-10 41880Failure Hydraulic --Top Drive - TDS-10 - TDS10SM09J017 hydraulic pump cracked love coupler needs replacing Closed   2009-11-09 09:18 AM 1

PS2-500 41881Support (I&C, survey, etc.)   Top Drives XXXVth AMC Schedule Closed460/DSO/7270 2009-11-18 10:51 PM 1

TDS-11 41885Failure Control --Top Drive - TDS-11SA - TDS11SH16R654 Top drive will not rotate Closed VS 2009-07-04 10:05 PM 1

TDS-11 41899Support (I&C, survey, etc.)   Top Drives Parts Only Closed   2009-07-20 09:21 AM 1

HPS-03-1000 41912Support (I&C, survey, etc.)  

Other; Mud Pumps; Control Systems; Drawworks; Top Drives; --Statoil Stafjord B t6291-D1100-G0001 Hydratong MPT - -

Seawell requires training on NON equipment - Stavanger equipment and Kristiansand equipment Open   2009-07-06 06:16 AM 1

TDS-8S 41914Support (I&C, survey, etc.)  

Other; Control Systems; Cranes; Pipe Handling; Drawworks; Top Drives; Iron Roughnecks; Hydraulic Power Units; Overhead/Traveling Equipment; Rotary Tables

Transocean requires training on NON equipment - Stavanger equipment and Kristiansand equipment Open   2009-09-02 12:47 AM 1

PS2-750 41919Support (I&C, survey, etc.)   Top DrivesInstallation and commissioning of PS-500 A top drive in Saudi Arabia Pending KSA933 2009-07-06 07:13 AM 1

TDS-11 41923Failure Hydraulic Top Drives Problem on hydraulic pump of TDS Open JAC913 2009-07-06 07:56 AM 1

TDS-11 41925Support (I&C, survey, etc.)   Top Drives The TDS-11 has no cycling time. Closed   2009-09-25 07:03 AM 1

TDS-4S 41927Support (I&C, survey, etc.)   Top Drives PH-85 not working properly Closed DS-21042 2009-07-06 08:29 AM 1

TDS-11 41929Support (I&C, survey, etc.)   Top Drives Commissioning TDS-11. Closed   2009-08-27 08:09 AM 1

HPS-03-1000 41930Failure Control Top Drives

Ability to set rpm then have a "Jog" button / function to turn in stages the TD at a predetermined speed clockwise / counter clockwise when button momentarily depressed Closed   2009-08-26 03:14 AM 1

46%

1%

7%

46%

FailureDropped Ob-jectsPlanned ServiceSupport

29%

5%

7%

4%

9%7%9%

5%

2%

19%3% 1%1%

ControlDolly / Derrick InterfaceElectricalGearboxHydraulicIBOPMotorMotor Housing AssyOperator ErrorPipe HandlerService LoopWashpipeUnknown

Data Analysis

27%

9%

6%7%

1%

6%

4%

10%1%

23%

6% 1% 1%

ControlDolly / Derrick InterfaceElectricalGearboxHydraulicIBOPMotorMotor Housing AssyOperator ErrorPipe HandlerService LoopWashpipeUnknown

• Started with 10 years worth of data

• Finally Ended up with 3 years worth of good data

• “Other” – largest cause of downtime

Quality of prediction

Intelligent data acquisition and analysis

Accounts for changing operating conditions

Accounts for random events such as jarring

Filters out ambient noise and resets baseline

Condition Monitoring System

Vibration Sensors

A day in the life of …. Boiler

• Gets to location

• Stays there

• +30 years

A day in the life of …. Top Drive

Advanced Rig Monitoring – Virtual Employee

eHawk introduces Machine Learning to learn from historical data an equipment’s “Normal” vs. “Abnormal” operations for multiple states.

Dynamically create profiles to monitor the equipment and listen

for abnormal signatures. Continuously adapts over time.

How do we do it ?

The Message….

What do we measure on a Top Drive then

• Upstream

– Engines, Generators, Drives

• Downstream

– Rock formations, DH vibrations, etc.

• Other

– Ambient Temperature, etc.

Bearing Status

Debris Status

Mud Ingress Status

Top Drive RPM

Torque

Load

Derrick Location

Motor Winding Temps

Left Right

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Machine Learning

Example 1 - Top Drive

Found 14 day Predictor for June 10th Top Drive Failure (Over Temp) due to Lube Motor Failure

• Created Supervised Learning Profiles to monitor for failure signature detected ongoing.

• Confirmed failure information with Rig• Root Cause: UV1 valve cycling lubrication fluid in 6 second intervals

Example 2 – Engine Temps

Example 3:– Mud Pump

Anomaly Detection triggered on June 9th for Mud Pump Drive fault

oDrive fault prediction found oCustomer notifiedoRig down 18 hours later

So... No sensors whatsoever ???Cam and Cam Main Bearings

Screen shot of Actual Alarm 3 Day Trend shows increased vibration. The spectrum and trend of the BPFI (Ball Pass Frequency Inner Race)

clearly indicated the presence of an early stage defect on the inner ring of the bearing

3 day trend of BPFI

Frequency Spectrum

Actual Failed Bearing

Repair Costs and Downtime with CM Repair Costs and Downtime without CMComponent Cost Total Downtime Component Cost Total Downtime

Cam Roller $ 12,000 Cam Roller $ 12,000

Eccentric Cam $100,000

Linear Rails $ 9,000

Labor(One Day, one technician)

$, 1,800 Labor (4 days, two technicians)

$ 14,400

Evacuation unit (4 days) $ 24,000

Total $ 13,800 8 Hrs. Total $159,400 196 Hrs.

NET $145,600 184 Hrs

Associated Costs of Components and Labor for this failure

Note: Spare Eccentric Cam was not available on Rig

Lead time for Eccentric Cam was extremely long at time of incident

Risk Analysis

The Numbers Say it All

Without solution$173,000 Lost Day Rate

With solution (2012)$33,000 Lost Day Rate

72% Reduction

in RigDown

Predictability• False Alarms

• Predictability is key

• When you call the rig with a problem…

Monitoring the BOP

• Current Demographic –

• Older, aging driller demographic

• Influx of younger inexperienced workforce

• New Deepwater Rigs being built – How will we staff them

• Compare Pilots and Drilling Crews ($650 Million Rig)

• Not enough time to train – Serve the iPad Generation

Do we have to do this?

Remote Monitoring – Too many rigs and too few PhDs

Norway Singapore Houston

Hawaii

Conclusion

• Are we there yet ?

• There is no end point.

– We can only get better

• Technologies and Capabilities exist

– Let’s use the tons of data

• We have no more excuses

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Questions?

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NOV I Rig Solutions I www.nov.com