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Parker Drilling’s Arctic Alaska Drilling Units

Rigs No. 272 and No. 273 help BP move forward


Grady Fischer in the driller chair inside Parker Drilling Co.’s Rig No. 273 on the North Slope.

© BP

It was a typical winter day in February 2013 on Alaska’s North Slope when Parker Drilling’s Rig No. 272 started its inaugural journey from the Crazy Horse Pad in Deadhorse to its first drilling site.

It was minus forty degrees Fahrenheit—not counting wind chill, which was a numbing minus sixty. Visibility was limited. The rig was moved over the fragile tundra via an ice road, which blended in so well with the all-white landscape that a crew of spotters was needed to walk alongside the rig to help the driver stay on route. The spotters were rotated out after ten minutes to limit their exposure to the frigid conditions.

It takes a special brand of people, and specialized training, to work in such extreme conditions, but as anyone knows who has tried to start a car left in a Fairbanks parking lot too long in mid-winter, the design of the equipment used in arctic conditions is equally important. That’s why BP Alaska turned to Parker Drilling Co. for two state-of-the-art drilling rigs, No. 272 and its sibling, No. 273. The initial cost of the two rigs was estimated at $385 million.


Extreme Experience

The choice of Texas-based Parker Drilling to design and build the rigs was based on the company’s decades of experience in extreme environments.

“Parker has decades of experience in operating successfully in extreme climates and under the most challenging Arctic conditions, including helping our customers successfully achieve world records in extended reach drilling operations,” Parker Drilling spokeswoman Stephanie Dixon says. “Our unique expertise positions us well to create comprehensive, effective solutions from both an equipment and operations standpoint. We draw upon this experience constantly as we design our rigs and work to continually improve our processes.”

The rigs were delivered to Alaska in 2011 and after some modifications went into production late in December 2012 and February 2013. Rigs No. 272 and No. 273 are called Arctic Alaska Drilling Units and were designed and engineered specifically for the harsh climate and sensitive environment of Alaska’s North Slope oil fields.

Parker Drilling was founded in 1934 by G. C. Parker, who pioneered the use of diesel electric-powered drilling rigs. A decade later, its rigs were being used in Canada and Venezuela. It went public in 1969.

Over its eighty-year history, Parker Drilling has worked around the globe, from the Peruvian jungle to Oklahoma, the former Soviet Union, China, and Turkmenistan, constantly working to refine and enhance the technology of its rigs. Parker Drilling also provides rental tools and project management services to the energy industry. Its rig fleet includes twenty-three land rigs and two offshore barge rigs, deployed around the world.

“We have a legacy of successfully ramping up operations in some of the most remote areas of the globe, and we use this expertise to help our customers reduce operational risks and costs,” Dixon says.


Arctic Innovations

The company has brought many innovations to Arctic drilling, such as new rig designs, drilling technology, and new systems to move the rigs to new sites. It also has set numerous records for deep and extended-reach drilling and maintains a strong focus on safety.

Parker Drilling has a long history in Alaska’s oil fields. Parker introduced a winterized rig on wheels for a Prudhoe Bay operation in 1978 and in the early 1990s built the massive, environmentally sensitive Rig 245 specifically designed for Alaska’s North Slope.

“The two Parker rigs modernized our fleet with new features that target increases in crew safety and efficiency in our drilling operations,” says BP Alaska spokeswoman Dawn Patience. “Adding the Parker Drilling rigs to our fleet advanced our efforts for light oil development at Prudhoe Bay and Milne Point. The new rigs are more high tech and the driller can control the activity with a joystick and multiple computer monitors.”

According to Parker Drilling, both rigs have a rated drilling depth of eighteen tousand feet, 1,800 horsepower draw-works (the rig’s primary hoisting machine), and two mud pumps rated 1,600 horsepower apiece.

Safety for workers and the delicate Arctic environment is a key part of the rig’s design, Dixon says.

“First and foremost is ensuring the safety and well-being of our team members, customers, and partners working in such harsh conditions,” Dixon says. “Ensuring the well-being of this important and sensitive ecological environment is also critical.”

The rigs are engineered for safety in the North Slope’s harsh environment, with zero-discharge capabilities and a modular design that allows workers to transport the rig in three fully enclosed mobile units.


AADU Expertise

“As Rig 272 goes to work, we continue to build upon Parker’s history of achievement in supporting Arctic exploration and development,” said Gary Rich, president and CEO of Parker Drilling in a media release. “From delivering drilling solutions in the world’s most extreme environments to improving efficiencies in more conventional settings, we are focused on bringing proven practices and innovative approaches that transform our clients’ ability to reach their objectives safely and reliably.

“With both AADU rigs now operating, we expect to demonstrate a new level of safety and performance in this important region,” Rich said. “We look forward to working with BP and other operators to responsibly access the energy resources of the North Slope and are committed to leveraging the expertise we’ve gained through the AADU rig project to benefit our clients around the globe.”

Parker Drilling’s eight decades in the global drilling market has given it insight into industry needs, Dixon says.

“We are focused on helping our customers consistently reduce their operational risks and costs by providing innovative, efficient, and reliable solutions that help them realize their business objectives,” Dixon says. “This is at the core of our mission in all aspects of our work, whether we are operating and maintaining a rig, providing consultation to customers on potential new-builds, mobilizing equipment, providing rental equipment, or helping our customers achieve world records in extended reaching drilling operations.”


Augmenting BP’s Increased Investment

In Alaska, the rigs augment BP’s importance to the state economy. BP is one of the largest oil producers in Alaska and BP-operated oilfields account for two-thirds of total Alaska production, which fuels 90 percent of the state budget.

In 2012, BP had a $1.8 billion operating budget in Alaska and employed 2,300 people, 81 percent of whom were Alaska residents. It paid $2.8 billion in taxes and royalties on a gross production rate of 477,000 barrels of oil equivalent, a net production rate of 142,000 barrels of oil equivalent.

The new rigs bring BP’s total onshore rigs to seven, and the company plans to add two more by 2016. The rigs are expected to add two hundred jobs on the North Slope and increase investment in Alaska over the next five years.

While the rigs will boost BP’s output on the North Slope, planning for the rigs started in 2006, before Alaska increased taxes on oil production, says Patience. In 2006, before the tax increase dubbed “Alaska’s Clear and Equitable Share” (ACES), BP had eleven active rigs. With the addition of the Parker rigs, BP has seven rigs on the North Slope. In 2013, Alaska passed an oil tax reform bill aimed at spurring increased production. In reply, BP announced it would add two more rigs, one by 2015, a second in 2016.

“The tax change put Alaska back in the game,” Patience says.

In 2013, BP planned to complete rig workover or rate enhancing well work on one hundred-plus more wells than last year, Patience says. In 2014, BP plans another increase in rig workovers and rate-enhancing well work.

“Ultimately we want to produce more oil,” Patience says. “With an improved tax structure in place, oil and gas projects can once again move forward, making Alaska competitive in the midst of America’s energy renaissance.

“Janet Weiss, BP Alaska president, recently announced that under the new tax reform law, BP plans to reinvest nearly ninety cents of every dollar we make here over the next five years in Alaska. This reinvestment rate represents an increase of 60 percent from previous years under ACES.”

As for Parker Drilling, the successful deployment of Rigs 272 and 273 is an incentive to continue the work of the past eight decades.

“We will continue to focus on safely delivering innovative solutions that reliable and efficiently reduce risks and costs for our customers,” Dixon says. “We are proud of our achievements in the Alaskan market and value the relationships and partnerships we have in the region. We stand ready to help our customers achieve their business goals safely and in an environmentally sound manner.”

Julie Stricker is a journalist living near Fairbanks.

This first appeared in the February 2014 print edition of Alaska Business Monthly magazine.
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