Cementing Foam Wiper Balls

Case Analysis: Operational Cost Reduction Using Merit Foam Wiper Balls in a Norwegian Oilfield

Case Analysis: Operational Cost Reduction Using Merit Foam Wiper Balls in a Norwegian Oilfield

Background

A prominent offshore drilling company operating in the challenging North Sea sought innovative solutions to balance efficiency with cost-effectiveness. The oilfield, characterized by its harsh weather, high-pressure, high-temperature (HPHT) conditions, and stringent regulatory demands, presented a tough operational environment. The company’s focus was on optimizing cementing operations, a critical phase in well construction that directly impacts well integrity and long-term performance.

The polyurethane-based wiper balls previously in use often failed to withstand the HPHT conditions

Problem Statement

Despite employing advanced drilling and cementing techniques, the company faced mounting operational expenses due to inefficient wiping tools. The polyurethane-based wiper balls previously in use often failed to withstand the HPHT conditions, leading to:

• Inadequate wiping performance: Residual cement left in the drill pipes required additional cleaning cycles.
• Increased non-productive time (NPT): Unplanned delays escalated rig operating costs.
• Frequent tool replacements: The need for constant replacement inflated material and logistics costs.
  These inefficiencies collectively hindered the company’s goal of maintaining a lean operational cost structure.

Solution Implementation

The company introduced Merit Automotive’s foam wiper balls, designed specifically to meet the demanding needs of oilfield cementing operations. Manufactured from high-grade natural rubber, these wiper balls offered:

• Superior wiping efficiency.
• High durability and elasticity to withstand HPHT environments.
• Compatibility with various pipe diameters and cementing procedures.

The foam wiper balls replaced the polyurethane-based products in a phased trial across several cementing jobs.

Key Metrics

• Cost per foam wiper ball: Highly competitive pricing from Merit Automotive.
• Operational cost saving per foam wiper ball: $13,899 USD.
• Annual usage in cementing operations: 200 foam wiper balls.

Technical & Financial Analysis

Operational Performance Improvements

1. Enhanced Efficiency:
   • The foam wiper balls achieved near-perfect cleaning, removing cement residue efficiently from drill pipe walls.
   • This reduced the need for secondary cleaning cycles, significantly minimizing downtime.
2. Exceptional Durability:
   • The natural rubber composition provided resistance to wear and deformation, enabling consistent performance across multiple jobs.
3. Increased Reliability:
   • The improved wiping action ensured uniform cement displacement, enhancing wellbore integrity.

Cost Reductions

1. Direct Savings:
   • Each foam wiper ball delivered a net saving of $13,899 USD by reducing downtime, cleaning cycles, and waste management costs.
   • Over a year, the company saved approximately $2,779,800 USD (200 units x $13,899 USD).
2. Maintenance Costs:
   • The need for frequent replacements was eliminated, lowering material and logistics expenses.
3. Labor Costs:
   • Faster operations reduced personnel hours required for maintenance and cleanup.

Accounting Impact

1. Improved Cost of Goods Sold (COGS):
   • Reduced operational costs directly contributed to lower COGS, boosting gross profit margins.
2. Enhanced EBITDA:
   • Streamlined operations and cost reductions improved the company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
3. ROI and Asset Utilization:
   • Savings reinvested into other operational areas increased Return on Investment (ROI) and optimized asset utilization.

Environmental and Strategic Benefits

1. Sustainability Gains:
   • The use of natural rubber reduced the environmental impact associated with disposal and replacement compared to polyurethane-based products.
2. Strengthened Market Position:
   • Enhanced operational reliability improved project delivery timelines, bolstering the company’s reputation and competitiveness in the offshore drilling sector.

Conclusion

The introduction of Merit Automotive’s foam wiper balls transformed the company’s cementing operations. By cutting operational costs by $13,899 USD per foam wiper ball, the company achieved:

• Significant annual savings of $2,779,800 USD.
• Improved equipment reliability and uptime.
• Enhanced financial performance through reduced COGS and better EBITDA.

The solution not only delivered immediate cost benefits but also aligned with the company’s strategic goals of operational excellence and sustainability.

Strategic Recommendations

1. Standardization:
   • Adopt Merit foam wiper balls across all cementing operations to ensure consistent performance and cost savings.
2. Global Rollout:
   • Expand the use of Merit’s foam wiper balls to other oilfields to maximize savings across assets.
3. Partnership Development:
   • Establish a long-term partnership with Merit Automotive to explore further innovations in drilling and cementing tools.

By fully leveraging the capabilities of Merit Automotive, the company is well-positioned to sustain its competitive edge in the global oilfield services market.

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