Baker Hughes 2004 Annual Report Download - page 57

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direction),฀horizontal฀wells฀(which฀are฀sections฀of฀wells฀drilled฀
perpendicular฀or฀nearly฀perpendicular฀to฀vertical)฀and฀extended฀
reach฀wells.
INTEQ฀is฀a฀leading฀supplier฀of฀both฀conventional฀and฀rotary฀
based฀directional฀drilling฀systems.฀Conventional฀directional฀
drilling฀systems฀employ฀a฀downhole฀motor฀which฀turns฀the฀
drill฀bit฀independently฀of฀drill฀string฀rotation฀from฀the฀surface.฀
Placed฀just฀above฀the฀bit,฀a฀steerable฀motor฀assembly฀has฀a฀
bend฀in฀its฀housing฀that฀is฀oriented฀to฀steer฀the฀well’s฀course.฀
During฀the฀“rotary”฀mode,฀the฀entire฀drill฀string฀is฀rotated฀
from฀the฀surface,฀negating฀the฀effect฀of฀this฀bend฀and฀causing฀
the฀bit฀to฀drill฀on฀a฀straight฀course.฀During฀the฀“sliding”฀mode,฀
drill฀string฀rotation฀is฀stopped฀and฀a฀“mud”฀motor฀(which฀con-
verts฀hydraulic฀energy฀from฀the฀drilling฀fluids฀being฀pumped฀
through฀the฀drill฀string฀into฀rotational฀energy฀at฀the฀bit)฀allows฀
the฀bit฀to฀drill฀in฀the฀planned฀direction฀by฀orienting฀its฀angled฀
housing,฀gradually฀guiding฀the฀wellbore฀through฀an฀arc.
INTEQ฀was฀a฀pioneer฀and฀is฀a฀leader฀in฀the฀development฀
and฀use฀of฀automated฀rotary฀steerable฀technology.฀In฀rotary฀
steerable฀environments,฀the฀entire฀drill฀string฀is฀turned฀from฀
the฀surface฀to฀supply฀energy฀to฀the฀bit.฀Unlike฀conventional฀
systems,฀INTEQ’s฀AutoTrak®฀rotary฀steerable฀system฀changes฀
the฀trajectory฀of฀the฀well฀using฀three฀pads฀that฀push฀against฀
the฀wellbore฀from฀a฀non-rotating฀sleeve฀and฀is฀controlled฀by฀a฀
downhole฀guidance฀system.
Measurement-While-Drilling.฀Directional฀drilling฀systems฀
need฀real-time฀measurements฀of฀the฀location฀and฀orientation฀
of฀the฀bottom฀hole฀assembly฀to฀operate฀effectively.฀INTEQ’s฀
MWD฀systems฀are฀downhole฀tools฀that฀provide฀this฀directional฀
information,฀which฀is฀necessary฀to฀adjust฀the฀drilling฀process฀
and฀guide฀the฀wellbore฀to฀a฀specific฀target.฀The฀AutoTrak®฀
rotary฀steerable฀system฀has฀these฀MWD฀systems฀built฀in,฀
allowing฀the฀tool฀to฀automatically฀alter฀its฀course฀based฀on฀
a฀planned฀trajectory.
Logging-While-Drilling.฀LWD฀is฀a฀variation฀of฀MWD฀in฀
which฀the฀LWD฀tool฀gathers฀information฀on฀the฀petrophysical฀
properties฀of฀the฀formation฀through฀which฀the฀wellbore฀is฀
being฀drilled.฀Many฀LWD฀measurements฀are฀the฀same฀as฀those฀
taken฀via฀wireline;฀however,฀taking฀them฀in฀real-time฀often฀
allows฀for฀greater฀accuracy,฀as฀measurements฀occur฀before฀
any฀damage฀has฀been฀sustained฀by฀the฀reservoir฀as฀a฀result฀
of฀the฀drilling฀process.฀Real-time฀measurements฀also฀enable฀
“geo-steering”฀where฀geological฀markers฀identified฀by฀LWD฀
tools฀are฀used฀to฀guide฀the฀bit฀and฀assure฀placement฀of฀the฀
wellbore฀in฀the฀optimal฀location.
In฀both฀MWD฀and฀LWD฀systems,฀surface฀communication฀
with฀the฀tool฀is฀achieved฀through฀mud-pulse฀telemetry,฀which฀
uses฀pulse฀signals฀(pressure฀changes฀in฀the฀drilling฀fluid฀traveling฀
through฀the฀drill฀string)฀to฀communicate฀the฀operating฀condi-
tions฀and฀location฀of฀the฀bottom฀hole฀assembly฀to฀the฀surface.฀
The฀information฀transmitted฀is฀used฀to฀maximize฀the฀efficiency฀
of฀the฀drilling฀process,฀update฀and฀refine฀the฀reservoir฀model฀
and฀steer฀the฀well฀into฀the฀optimal฀location฀in฀the฀reservoir.
As฀part฀of฀INTEQ’s฀mud฀logging฀services,฀engineers฀monitor฀
the฀interaction฀between฀the฀drilling฀fluid฀and฀the฀formation฀and฀
perform฀laboratory฀analysis฀of฀drilling฀fluids฀and฀examinations฀
of฀the฀drill฀cuttings฀to฀detect฀the฀presence฀of฀hydrocarbons฀and฀
identify฀the฀different฀geological฀layers฀penetrated฀by฀the฀drill฀bit.
The฀main฀drivers฀of฀customer฀purchasing฀decisions฀in฀these฀
areas฀are฀the฀value฀added฀by฀technology฀and฀the฀reliability฀and฀
durability฀of฀the฀tools฀used฀in฀these฀operations.฀Specific฀oppor-
tunities฀for฀competitive฀differentiation฀include:
•฀ the฀sophistication฀and฀accuracy฀of฀measurements,
•฀ the฀efficiency฀of฀the฀drilling฀process,
•฀ equipment฀reliability,
•฀ the฀optimal฀placement฀of฀the฀wellbore฀in฀the฀reservoir,฀and
•฀ the฀quality฀of฀the฀wellbore.
INTEQ’s฀primary฀competitors฀in฀drilling฀and฀evaluation฀services฀
are฀Halliburton,฀Schlumberger฀and฀various฀other฀competitors.
Key฀business฀drivers฀for฀INTEQ฀include฀the฀number฀of฀drill-
ing฀rigs฀operating,฀as฀well฀as฀the฀current฀and฀expected฀future฀
price฀of฀both฀oil฀and฀natural฀gas.
WesternGeco
WesternGeco฀is฀a฀seismic฀venture฀in฀which฀we฀own฀30%฀
and฀Schlumberger฀owns฀70%.฀WesternGeco฀provides฀compre-
hensive฀worldwide฀reservoir฀imaging,฀monitoring฀and฀develop-
ment฀services,฀with฀one฀of฀the฀most฀extensive฀seismic฀crews฀
and฀data฀processing฀centers฀in฀the฀industry,฀as฀well฀as฀one฀of฀
the฀world’s฀largest฀multiclient฀seismic฀libraries.฀Services฀range฀
from฀3D฀and฀time-lapse฀(4D)฀seismic฀surveys฀to฀multicompo-
nent฀surveys฀for฀delineating฀prospects฀and฀reservoir฀manage-
ment.฀WesternGeco฀is฀positioned฀to฀meet฀the฀full฀range฀of฀
customer฀needs฀in฀land,฀marine,฀and฀shallow-water฀transition-
zone฀areas.
Seismic฀solutions฀include฀proprietary฀Q-Technology*฀for฀
enhanced฀reservoir฀description,฀characterization฀and฀monitoring฀
throughout฀the฀life฀of฀the฀field฀–฀from฀exploration฀through฀
enhanced฀recovery.฀Q*฀single-sensor฀hardware฀and฀software฀are฀
setting฀a฀new฀quality฀and฀capability฀standard฀for฀seismic฀solutions.
WesternGeco’s฀Omega*฀Seismic฀Processing฀System฀encom-
passes฀one฀of฀the฀industry’s฀most฀advanced฀and฀comprehensive฀
suites฀of฀algorithms฀and฀runs฀on฀multiplatform฀technology,฀
ensuring฀timely฀turnaround฀for฀even฀the฀most฀complex฀pro-
cessing฀projects.฀WesternGeco’s฀major฀competitors฀are฀Com-
pagnie฀Generale฀de฀Geophysique,฀Veritas฀DGC,฀Inc.฀and฀
Petroleum฀Geo-Services฀ASA.฀
For฀additional฀information฀related฀to฀WesternGeco,฀see฀the฀
“Related฀Party฀Transactions”฀section฀in฀Item฀7฀and฀Note฀8฀of฀
the฀Notes฀to฀Consolidated฀Financial฀Statements฀in฀Item฀8,฀both฀
contained฀herein.
*฀Mark฀of฀WesternGeco
Marketing,฀Competition฀and฀Economic฀Conditions
We฀market฀our฀products฀and฀services฀on฀a฀product฀line฀
basis฀primarily฀through฀our฀own฀sales฀organizations,฀although฀
certain฀of฀our฀products฀and฀services฀are฀marketed฀through฀
supply฀stores,฀independent฀distributors,฀agents,฀licensees฀or฀
sales฀representatives.฀We฀ordinarily฀provide฀technical฀and฀advi-
sory฀services฀to฀assist฀in฀our฀customers’฀use฀of฀our฀products฀
and฀services.฀Stock฀points฀and฀service฀centers฀for฀our฀products฀
and฀services฀are฀located฀in฀areas฀of฀drilling฀and฀production฀
activity฀throughout฀the฀world.
Our฀products฀and฀services฀are฀sold฀in฀highly฀competitive฀
markets,฀and฀revenues฀and฀earnings฀can฀be฀affected฀by฀
changes฀in฀competitive฀prices,฀fluctuations฀in฀the฀level฀of฀฀
2004฀Form฀10-K฀฀฀฀฀7