JOURNAL OF ENGINEERING AND MANAGEMENT IN e-ISSN 2477-6025

INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

CONTINUOUS IMPROVEMENT OF DRILLING ULTRA-SHALLOW

HORIZONTAL WELL THROUGH LEAN SIX SIGMA
METHODOLOGY
Petrus Tri Wahyudi1), Gatot Yudoko1)
School of Business and Management
Institut Teknologi Bandung, Indonesia 1)

Abstract Low oil price environment impacted to business of Oil and Gas Company including PT. SDEC.
However, PT. SDEC was able securing limited and fixed capital budget to drill well and had committed to
drill certain well number to Government of Indonesia. When the initial 12 wells were completed with longer
cycle time (average 9.9 days/well) than business plan (7.5 days/well) and also higher cost, the problem
became more complex because company needed to complete well as per commitment and in other hand no
additional capital would be spent by parent company if actual expenditure exceeded the initial budget.
Company assigned a team to solve the problem through Lean Six Sigma. Through strong collaboration
among teams, the project execution performance was improved (the Cp of drilling cycle time was improved
from 0.06 to 1.08). As the result of this project save cost around $ 2.8 million

Keywords: DMAIC, Drilling cycle time, Lean Six Sigma, Ultra-shallow Horizontal Well

1. Introduction
PT. Suwarnadwipa Energy Company PT. SDEC is one of subsidiaries of EC#
(PT. SDEC#) is a major Oil Company in Inc., which is considered as one of the biggest
Indonesia, which works under PSC term with energy Company in the world. PT. SDEC
Indonesia (represented by SKKMIGAS as manages many fields which are all located in
representative of Government of onshore area, one of them is called Uap
Indonesia/GoI). Panas (UP)# field. The size of UP field is about
18 km long by 8 km wide, this field composed
of 14 areas. The main production formation are
named sand 1, sand 2 and sand 3. The lithology
of those formation is unconsolidated sandstone
with 2,000 – 3,000 mD permeability. The depth
of sand 1-formation is around 350 – 450
TVDSS, while sand 2-formation is around 450
– 550 ft TVDSS and sand 3-formation is around
550-650 TVDSS respectively.

Figure 1. PT. SDEC Area of Operation

* Corresponding author.
Email: pt.wahyudi@gmail.com; gatot@sbm-itb.ac.id
Published online at http://Jemis.ub.ac.id
Copyright ©2018 JTI UB Publishing. All Rights Reserved
#
: it is not real name Figure 2. New Well Count Drilled by PT. SDEC for
Cite this Article As Wahyudi, P.T, Yudoko, G. (2019). CONTINUOUS IMPROVEMENT OF
DRILLING ULTRA-SHALLOW HORIZONTAL WELL THROUGH LEAN SIX SIGMA
METHODOLOGY. Journal of Engineering and Management in Industrial System, 7(2),p.90-103
Paper Accepted : 2019-11-28
Paper Published : Nov, 30th 2019
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INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

Last 6 Years Improvement = 9.9 days – 7.5 days = 2.4

Historically, PT. SDEC had massive days ! rounded up to 2.5 days
drilling activities, it was considered as company • Daily spread cost: $30K (rig rental cost,
with the highest drilling activities in Indonesia. matting board rental cost, G&A,
PT. SDEC drilled hundreds wells in many supervision, telecommunication rental, H2S
fields across company’s working area rental cost)
(concession) including drilling in UP field. • Other cost variable (such as but not limited
During 2013 – 2015, team D&C of PT. SDEC to mud cost, cementing cost, directional
drilled hundred wells per year (see figure 2). cost, etc.) are assumed constant.
During low oil price environment, many • COPQ = 2.5 days x $30k/day x 30 wells =
project including drilling new wells became un- US$ 2.25 million
economic and were dropped due to could not The research scope and limitations are:
pass the economic hurdle. This situation created • This research only applicable for drilling
huge impact to all stakeholders. If all drilling ultra-shallow horizontal wells activity in UP
new well projects were dropped, several field.
impacts would be occurred such as: • The method used in this research is DMAIC
• The production decline rate would be higher framework of Lean Six Sigma (mostly in
than original plan, it would impact to PT. SDEC, Lean Six Sigma is simplified and
national oil production. called as Lean Sigma).
• Drilling rig contract would be terminated • This research only focus on D&C team’s
• Supporting contract of drilling would be work related.
terminated as well • This research focus on effort of cost
• Potential of employees lay off massively reduction (other improvement efforts,
both for PT. SDEC itself and also for especially technical effort, which were made
business partner but not related directly with scope of current
• Would impact to surrounding community project to reduce the cost will be described
Consider those situation, project teams of in general description but not in detail).
drilling projects re-evaluated the project,
including also project team of drilling Ultra 2. Drilling Horizontal Well
Shallow Horizontal well projects in UP field. An oil well is a hole into the earth which
After did several high effort, project team was is drilled by using drilling rig and several
able to develop very promising strategy. supported equipment by rotating a drill string
Therefore, management gave green light for which is completed by a drill bit in front of that
this project to be executed. However, since the drill string. Once the hole is established, metal
technical risk was higher compare to previous casings are inserted to the hole and usually
similar projects and in other hand the cemented to give well integrity. The drilling
supporting data was very limited, even though project start from planning phase. Generally
it had been planned thoroughly, problem was activities in planning phase (well design) for
still exist during execution and causing longer D&C cover completion design, casing design,
cycle time/CT (average 9.9 days/well) compare cementing design, mud design, well trajectory
to Business Plan/BPlan (7.5 days/well). (directional) design, BHA design, rig selection,
This research is intended to find out the cost estimation development & secure AFE,
solutions to improve drilling cycle time contracting and material purchasing, etc.
(focusing on cost reduction). This research will Execution phase will be initiated with well pad
identify the possible areas to be optimized and (platform) preparation. Once well pad is ready,
how to reduce the cost. This efforts are rig will move in and rig up the rig. Spud in is
expected to give benefit around US$ 2.25 terminology to describe the first drilling (bit
million at the end of control phase with make a hole). Operation team will execute the
calculation assumption: drilling process by follow the drilling program,
• This project will be able to improve and step by step, well section by well section until
achieve drilling cycle time as per target in new well is completed.
BPlan A horizontal well basically is a
Improvement = CT of baseline – CT in directional well but have higher inclination,
BPlan typically it will be more than 85 degree

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INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

inclination. In production section of horizontal called as Ultra Shallow Horizontal Well) would
well which has inclination around 90 degree creating more complexity. Starting package 1
(usually called lateral section), the hole drilled which drilled in 2011 until 2018, there was a lot
follow formation layer, the objective is to get of change done for horizontal well drilling
longer exposure to interest zone (more pay project to improve the performance.
zone), longer pay zone can increase the
production of hydrocarbon. Recently, many oil 4. Improvement through Lean Six Sigma
company drill horizontal well to optimize their In this paper, the root cause of the
production and generally the well cost per problem will be analyzed using Lean Six Sigma
barrel oil produced will be cheaper. Due to (LSS) methodology. Actually Lean Six Sigma
length of lateral section will have positive is combination of Six Sigma and the lean
correlation with oil production, it trigger oil manufacturing/lean initiatives. Lean initiatives
company to drill as long as possible of lateral are fantastic to improve the productivity,
section, they try to beat each other by achieving culture changing, et cetera within short time;
the longest lateral section. however lean initiatives don’t have tool to fix
unseen quality problem. Six sigma is data-
3. Evolution Horizontal in UP Field driven approach which intended to produce
UP field is categorized as the busiest consistent products/services (reducing or even
field from drilling activity in PT. SDEC. eliminating defects). Six sigma is very powerful
Horizontal oil wells in UP field was introduced to uncover root causes, focused and effective;
in 1999, but that type well was not continued however six sigma usually take long time. A
due economic reason (the well cost was very combination of both lean initiatives and six
high, at the time it was considered not sigma will provide the tools to create business
economic). So, the drilling development in UP improvement (Smith, 2003, p.1, [7]). George
field was dominated by vertical wells. Some (2002, p.6, [2]) described that Lean Six Sigma
directional wells project was initiated on 2010 is a methodology that maximizes shareholder
due to surface limitation. value by achieving customer satisfaction,
Refer to subsurface team review, that in quality, process speed, cost and invested capital
several area, oil remaining in certain sub-sand in the fastest rate of improvement.
layer was exist and consider also there was The concept and objective of Lean is to
success similar project in other country, then identify and eliminate things which do not have
horizontal oil well campaign in UP field was or give additional value (people call it as
introduced again in 2009 (as trial project). From waste), as the result the cycle time will be
4 trial wells, there was promising result both accelerated. Usually people use acronym
from executability and production. As the DOWNTIME (use the first letter of every waste
result, starting 2011, PT. SDEC had developed type) to identify type of waste, which are
horizontal oil well in UP field, this well type (goleansigma.com, [3]):
was considered as extended reach well because • Defect/Rework: out of specification pro-
the true vertical depth (TVD) well in this field ducts/services which need resources to
was around 600 – 700 ft TVD and average total correct it
depth 2,200 ft MD (the ratio of MD to TVD • Over Production: produce more than
was around 3). Due to the true vertical depth requirement or before is needed
(TVD) value was very shallow, then this type • Waiting on/Delays: inefficient time due to
well was called as shallow horizontal oil well. waiting on some material, services, next step
In this period, the well design used was big readiness
design (using big size of casing) and the • Non-utilized talent: underutilizing people’s
average drilling cycle time of shallow knowledge, talents and skills
horizontal well was around 14.5 days/well. • Transportation: unnecessary movement of
On 2013, there was trial to drill one well materials and or products
with shallower TVD using slim hole design. • Inventory: over production and or excess un-
Starting 2014, opportunity to drill shallow processed materials
horizontal well was decreasing and the • Motion: unnecessary people movement
available opportunity was to drill in shallower • Extra-Processing/Over Design: more
depth. The shallower TVD (this type well was working done or higher quality than should

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INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

be (required by customer)
Erick C. Jones (2014, p.72, [4]) classified
waste become 7 categories which are known as
“Oh-no seven source of waste”, those seven
categories as same above list, the only category
not included is Motion.
Once company able to eliminate the
waste or “non-value added” along entire value
streams, company will operate efficiently and
effectively. As the result, company will require
less resources (less capital, less human efforts,
Figure 3. DMAIC Framework of PT. SDEC
less time). (Source: Internal Data PT. SDEC)
Pyzdek and Keller (2010, p.148, [6])
stated that five steps of Lean Six Sigma Project: 4.1 Define Phase
• Define: establish the goals or targets of the The objective of this phase is to express
improvement activities, incorporate into a the encountered problem which is extracted
project contract. from business issue and to establish a team to
• Measure: activity to know the existing solve the problem. Define phase cover:
system, determine reliable and valid variable • Project Team forming. Align with PT.
(metrics) to support monitoring progress of SDEC’s guideline about Lean Six Sigma,
target, determine the baseline performance. this project was composed of project
• Analyze: analyze the system to find out the sponsor, project champion, project
potential root causes, close the gaps between facilitator, project team members and project
existing performances of current system resources.
with the goals. In this step, statistical tools • Identify the opportunity. The opportunity
commonly used to help the analysis. was improving drilling cycle time and
• Improve: After understand the root causes reducing drilling cost so PT. SDEC could
and have solution from analyze phase, in complete all proposed wells as per business
this phase we will improve the system by plan. As described in section 1 about
implementing the solution. The quality and business issue, during low oil price
creativity of project team during analyze environment, only limited capital spent in
phase will directly impact to the quality of Oil & Gas Company including in PT. SDEC.
offered solution. The user of lean six sigma Even though PT. SDEC had been
including PT.SDEC, usually expect safer, successfully secured certain amount of
better, faster and cheaper result. The capital from parent company to drill new
improvement can be validated use statistical well, but the amount was fix. When 12 wells
method. which drilled in second semester of 2017
• Control: in this phase we talk about how to completed with longer cycle time which was
sustain the improved one. To sustain the causing higher cost than business plan,
improvement, usually project team will project team was requested to overcome the
develop clear guideline about what to do, the problem soon, otherwise with same amount,
PIC, how to measure to ensure that the PT. SDEC would be able to drill less well
improvement will be sustained. number. In other hand, when PT. SDEC had
Jones (2014, p.65, [4]) explained about proposed certain number of wells to
six sigma approach which known as The Juran SKKMIGAS through WP&B, SKKMIGAS
Six Sigma approach, the component is DMAIC would keep asking to drill same number of
(like mentioned above) + replicate which using wells as per WP&B (SKKMIGAS will more
know-how, knowledge, skill acquired by team focus on number of wells to support
to improve other problem. production instead of focus on budget
PT. SDEC’s Lean Six Sigma DMAIC limitation).
Framework depicts in figure 3: • Voice of Customer. The customer of this
project were Business plan team, Asset team
and D&C team. The voice of customer
summarized in Appendix 1

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INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

• Project Scope. Described in table 1

Tabel 1. Project Scopes
Parameter In Scope Out of Scope
Area UP Field Other field in PT.SDEC
Well type Horizontal Oil Well (HOW) Other type well (vertical & directional)
Task sequence Drilling activity only Before and after drilling activity (such
as well pad preparation, POP, etc.)
Discussion boundary • Discussion focus on drilling cycle • Detail technical (engineering part)
time improvement & cost reduction
• Completed Ultra-Shallow HOW • In-completed well (for example due
to significant problem well A was not
completed as Ultra Shallow HOW)

• Project Contract. To formalize and as calculated as Capital Avoidance – LPO due

documentation, this project documented in to process improvement
project contract. = (Average baseline drilling well cost –
actual drilling well cost) – (Total oil loss due
4.2 Measure Phase to increase distance criteria for shut in
The objective of this phase is to know producer well).
and to understand parameters that affect on
performance. Measure phase cover:
• Determine Measurement Parameters. The
metrics would be measured for this project
were Health, Environment and Safety
(HES), drilling cycle time and drilling well
cost.
• Determine Measurement System. Project
team will use data from daily drilling report
to get those three data.
• Data Collection & Determine Baseline.
Data was collected from 12 wells which
were executed during 2nd semester of 2017. Figure 4. Cpk Analysis of Drilling Cycle Time
The record system of HES metric was well
established, therefor the writer would not
discuss in detail about this metric. Drilling
cycle time would be expressed both in
day/well and hour/footage drilled. Upper
spec limit (USL) was set 7.5 refer to cycle
time as per business plan, even though the
faster would be better for company, but the
lower limit was determined 5.3 days as the
fastest drilling cycle time achieved (even
though with less complexity and less drilling
depth). The Cpk analysis of drilling cycle
time was shown in figure 4 and figure 5. Figure 5. Cpk Analysis of Drilling Cycle Time per
Novaes et. al., (2016, p.4, [5]) stated that Cp Footage Drilled
value < 0.67 indicate poor process. The Cp
of current process was less than 0.1, it was Similar with drilling cycle time, drilling
concluded that current process was poor. well cost would be expressed in $/well and
• Determine COPQ. COPQ is the impact on $/footage drilled (see figure 6 and figure 7).
financial or cost if no improvement done to Upper spec limit (UCL) was kept at US$ 750K
existing problem (or sometime people call it refer to well cost budget as per business plan,
as financial benefit). In this case, COPQ was the lower limit was determined at US$ 530K
(even though the cheaper the cost, would be

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INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

better for company but in this project assumed additional time for logging which done
LCL = US$530K refer to P10 of cost separately (not during drilling), this issue came
estimation). The run chart is available in from D&C team (explained in section voice of
Appendix 2. customer). Consider the portion of NPT and
also the complexity, team decided by focus to
reduce the additional time for logging and to
reduce (or even eliminate) the NPT instead of
trying to reduce the normal cycle time. If
around 2.5 days of NPT could be eliminated,
the drilling cycle time would achieve the target.

Figure 6. Cpk Analysis of Drilling Well Cost

Figure 8. Pareto Chart of Drilling Cycle Time in

2nd Semester of 2017

Refer to figure 9, the 3 biggest hitter

were well problem (among factors contribute to
well problem were 51% due loss circulation and
39% due to tight hole), waiting on something
and rig equipment problem. Therefore, team
Figure 7. Cpk Analysis of Drilling Well Cost per was only focus to those 3 category and focus to
Footage Drilled reduce additional logging time as raised up by
D&C team (normal operation but considered as
4.3 Analyze Phase “waste”) while found out the root causes.
The objective of this phase is to find
problem’s root causes. Project team performed
Forum Group Discussion (FGD). This FGD
involved the Subject Matter Expert (SME) from
D&C team, Asset team (Geologist and
Petroleum Engineer), business partner
representative refer to their expertise. This
activity was started with narrow down the
possible root causes refer to historical data,
performed brainstorming and developed the
why tree.
In determining the process variance or
Figure 9. Pareto Chart of Contributor Factor to NPT
defect source, the project team used Pareto during Drilling in 2nd Semester of 2017
principle. As mentioned by Fryman (2002,
p.189, [1]) “around 80% of the problem in a The why tree is available in Appendix 3,
product or process lie in 20% of factors”. Refer the result is summarized in Table 2.
to that principle, FGD started with reviewing
historical data. Refer to historical data which 4.4 Improve Phase
was presented by Pareto chart in figure 8, team Improve phase will discuss possible
found that the source of variance mostly came solutions of root causes which were found in
from NPT. Beside about NPT, there was

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Table 2. Root Causes Category

No Root Cause Controllability Related to
1 Improper well direction Controllable Design
2 Weather Un-controllable Nature
3 No allocation time for rig maintenance Controllable Procedure
4 No economic comparison between shut in surrounding producer Controllable Procedure
wells vs cost of problem
5 Flow rate while drilling is too high Controllable Design
6 New mud engineer to this kind of project Controllable People
7 In-accurate formation pressure prediction Controllable Design
8 No clear information about fault Controllable Design
9 Long time for mixing mud Controllable Procedure
10 High permeability formation Un-controllable Nature
11 Depleted zone Un-controllable Nature

Analyze Phase. Project team collected the together during design well trajectory
possible solutions, evaluated them including especially about well direction with
communicated to respective team to get support objective as long as possible would avoid E
from them. The recommendation solutions – W direction and or parallel to second
were summarized as below: largest stress direction.
j. D&C Operation team would put preventive
a. Project team would re-arrange the well
Loss Circulation Material (LCM) on active
execution sequence to give ample time for
tank
project team to re-evaluate the design, while
k. Production team would maximize proximity
rig kept drilling other well candidate
to injection well
b. D&C team would assign qualified mud
l. D&C Operation team would arrange
engineer only to this project.
composite matting board and provide
c. D&C team would improve the drilling
additional dozer from D&C Services
practice by using 400 GPM during drilling
(support team).
and they would do reaming after stand
down. While bit had reached casing point,
4.5 Control Phase
D&C operation team would increase the
Control Phase will cover about
flow rate to 520 GPM to ensure hole
implementation of solution plans which have
cleaning.
been discussed in Improve phase. This section
d. Production team would shut in respective
is the last step of DMAIC methodology.
surrounding producer wells within 50 m
After spent a lot of effort, finally this
radius prior drilling in respective formation
project was moved to control phase. To be able
section and turned on the producer wells
implemented the proposed solution, project
again once casing of new well was in place
team spent around 5 days to do Forum Group
and cemented.
Discussion (FGD). In this FGD, project team
e. D&C Operation team would prepare high
collected the data, found out the root causes and
concentration mud in separated tank, it
proposed solutions. Consider the business
would be transferred to active tank and
nature in D&C of PT. SDEC which was PT.
diluted as per requirement when any loss
SDEC still need to pay cost (rig cost and some
circulation.
other rental cost) even though if rig was not
f. Rig Company would do preventive
operated, the implementation of solutions were
maintenance during moving (prior spud in)
applied directly to next candidate well (let’s call
in every well.
as well improved#1). To be able implementing
g. Asset team would provide detail and
the solutions directly, during that FGD, project
accurate data about fault.
team performed well by well assessment to
h. Asset team would provide accurate
determine the risk rank and the improvement
formation pressure prediction.
requirement, and after that the project team re-
i. Drilling engineer and asset team would work

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arranged well execution sequence. Wells which NPT around 3.1%, Rig Company had agreed
need a lot of improvement, the well execution with the proposal. They did several
was delayed to last schedule and vice versa for maintenance especially for critical
wells which not require many improvement, the equipment such as mud pump, top drive
execution schedule was accelerated. As part of system, etc. prior spud in well improved#1
implementation strategy, team would applying and on every well.
trial on 3 wells and team would evaluate the d. Asset team (sub-surface) provided
result of those trial. If the result was showing information about fault for first 3 wells. The
significant improvement, the proposed solution information about remaining wells would be
would be applied to all remaining wells. provided later (the information of remaining
While rig was drilling baseline well#12, wells were provided during rig was
team directly performed socialization and did executing trial wells).
further follow up action to ensure that the e. Respective drilling engineer communicated
proposed solutions could be applied directly in to and secured additional tank from D&C
first 3 wells of 30 remaining wells. The support team (DCS) to store high
proposed solutions would be discussed in detail concentration mud. 2 tanks from DCS had
well by well basis during pre-spud meeting. been secured and dedicated to this project to
The implementation of proposed solutions were store high concentration mud. DCS also
explained below: provided more vacuum truck to transfer the
a. 2 proposed solutions (re-design well mud to next location if no loss circulation
trajectory to avoid E – W direction and event on well being drilled.
study to provide formation pressure f. Respective Petroleum Engineer
prediction) were not applied yet in trial due communicated to asset team (production
to the well direction of 3 wells were not team) and got approval to shut in
pointed to E – W and study for formation surrounding producer well. The meeting was
pressure prediction would need long time. performed directly and as result project team
b. Respective D&C Engineers engaged Mud successfully secured the approval to shut in
Company and assessed mud engineer surrounding producer wells within 50 m
Drilling engineer informed Mud Company radius during drilling execution. Shut in
on 4 January 2018 and worked together with scenario itself was performed while rig
Mud Company to satisfy the requirement drilled in same sand formation only and
related to mud area. Drilling engineering once casing was in place and cemented,
team spent around a half working day to surrounding producer wells were put back
perform assessment to all mud engineer on production mode.
candidate on 5 January 2018. g. Respective drilling engineer run again the
c. Respective D&C Engineers engaged Rig simulation to get more suitable drilling
Company and secured approval from them parameters.
to perform rig maintenance prior spud in. Starting well improved#1, flow rate was
After project team showed the comparison reduced during drilling to minimize loss
calculation between perform preventive circulation, but flow rate increased again
maintenance maximum 16 hour per month while performed circulation hole clean.
as per allowed in contract and no preventive
maintenance as per current practice but get

Table 3. Detail Duration Time and Comparison between Baseline vs Trial Result
Well Name NPT (hour) Normal CT Total CT
Well Waiting Reliability Others Total NPT
Problem On Equipment NPT
Baseline 67.6 20.5 16.4 6.8 99.3 152.1 247.8
Well Imp.#1 0 1 1 0 2 156 158
Well Imp.#2 13.5 2 4 0 19.5 151 170.5
Well Imp.#3 1 1 0 2 4 153 157
Av. Well Improved 4.8 1.3 1.7 0.7 8.5 153.3 161.8

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able to achieve safety metrics target which

were 0 fatality, 0 day away from work, 0
serious + catastrophic Motor Vehicle Crash
(MVC), 0 spill.
2. Drilling Cycle Time
The average drilling cycle time of improved
wells was 7.39 day/well and after
normalized by taken out non-controllable
NPT, the average cycle time was 6.91
day/well. From average cycle time
perspective, project team met or even
Figure 10. Comparison between Baseline and Trial
Result
exceeded the customer expectation. As per
shown in figure 11, the mean of drilling
The result of trial on first 3 wells were cycle time after improvement was 6.91
displayed in table 3 and figure 10, the result day/well. Even any significant improvement
indicated significant improvement. was observed (Cp improved from 0.0749 to
Refer to promising result, team agreed to 0.5941 and Cpk improved from -0.1082 to
apply the recommendations to remaining wells 0.3211), however the Cp and Cpk value
(27 wells more) and the practices would be were less than 1, it indicated incapable
adopted for upcoming other similar projects. process. This condition was happened
The detail information related to well design, mainly due to different well depth from well
information about fault, surrounding producer to well (even though there were several
wells need to be shut in, etc. were available and other factors, such as well direction, length
those information would be discussed during of tangent section, et cetera, also triggered
pre-spud meeting. To ensure the consistency of result variance). By considering depth of
this improvement, control plan document was well as the main contributor of variance, the
developed. writer made comparison in hour/ft to get
Toll gate meeting is required for every better explanation. Refer to Cpk analysis of
Lean Six Sigma project which formally will drilling cycle time which was stated in
enter “control phase”. Toll gate meeting is a hour/ft unit in figure 12, the Cp value had
meeting among LSS advisor, Champion and improved from 0.06 to 1.08 and Cpk value
project facilitator to discuss about project had improved from -0.07 to 1.03. This result
status. The facilitator presented about the indicated that solutions applied successfully
project since Define phase until the end of improved drilling cycle time.
Improve phase including trial process which
showing the result of improvement, and if all
involved person (especially LSS advisor) agree
that the project has make progress and able to
show improvement result, the project will be
declared enter “control phase”. Toll gate
meeting for this project was conducted on April
2019, and this project had been declared in
control phase, then project team was requested
to monitor the actual financial benefit (AFB)
for 12 months period and to update the result in
online database of lean six sigma. Consider
concession issue, unfortunately similar drilling Figure 11. Cpk Analysis of Drilling Cycle Time of
project for Q4 of 2018 and 2019 were postpone Improved Wells
until undecided time yet. The results of
improvement applied in 30 wells, which had
been agreed in WP&B, were as per below:
1. HES
No recordable safety incident during
execution this project, so project team was

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Figure 12. Cpk Analysis of Drilling Cycle Time per Figure 14. Cpk Analysis of Drilling Well Cost per
Footage Drilled of Improved Wells Footage Drilled of Improved Wells

3. Drilling Well Cost The run chart of this project is available

The average drilling well cost of improved in Appendix 2.
wells was US$639,795/well. If refer to total In brief, the total efforts done for this
cost for 30 wells which actual cost was US$ project consisted of 5 days FGD involving 10
19,193,840, the actual cost was less that persons SME (equivalent to 5 x 8 x 10 = 400
target cost (target for 30 remaining wells = man hour) and spent another 96 man hour to
$22.430 million). In this metric, the project revisit design and further meeting with team
team also met or even exceeded customer outside project team. However, no cost was
expectation. As displayed in figure 13, the charged to this project related to 496 man hour
mean of well cost after improvement was spent to do this project improvement due to
US$639,795/well, even there was employee salary and benefits had been included
tremendous improvement compared to as company G&A cost and also no additional
baseline, however the Cp and Cpk value cost charged to this project related to
were still less than 1 (it indicated incapable software/application utilization (company had
process). Similar with drilling cycle time, spent cost to rent software in annual basis) or
the different well depth from well to well services cost from Business Partner. The cost
was the main contributor to that condition. component counted for this effort was cost
By considering depth of well as the main related to Lost Production Opportunity (LPO)
contributor of variance, the writer made due to asset need to shut in more producer wells
comparison in US$/ft to get better which causing loss production. Total cost
explanation. Refer to Cpk analysis of well related to this LPO was US$623,867.
cost which stated in US$/ft in figure 14, the By spending US$ 623,867 additional
Cp value improve from 0.11 to 1.12 and the cost, project team was able to save drilling cost
Cpk value improved from -0.02 to 1.01. This US$ 3,480,523. By subtracting the additional
result indicated that solutions applied cost from cost saving, we got the actual
successfully improve the well cost. financial benefit which was around US$ 2,85
million as result of improvement.

5. Conclusion and Recommendation

After the implementation of
improvement plan from this project, several
points taken from this paper:
a. Lean Six Sigma with DMAIC (Define –
Measure – Analyze – Improve – Control)
methodology is a powerful methodology to
improve the performance, it is scalable (fit
for purpose), and it is applicable to improve
simple process until complicated process.
Figure 13. Cpk Analysis of Drilling Well Cost of This project “Continuous Improvement of
Improved Wells Drilling Ultra-Shallow Horizontal in UP

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INDUSTRIAL SYSTEM VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

Field” is an example of success story of LSS https://goleansixsigma.com/8-wastes/

implementation in D&C department of PT. [Accessed on 31 January 2019].
SDEC. [4] E.C. Jones. Quality management for
b. Even in low oil cost environment, PT. SDEC organizations using lean six sigma
was able to deliver the target in term of well techniques. Boca Raton – Florida – US:
count drilled of Ultra-Shallow Horizontal CRC Press Taylor & Francis Group; 2014.
Well as per agreed in WP&B with [5] A.C.N. Novaes, et.al. Process capability
SKKMIGAS by performed proper process, index cpk for monitoring the thermal
utilized fit for purpose strategy and got performance in the distribution of
support from all team. refrigerated product, Production Vol.26
c. Complexity (such as loose formation, high no.1 Sao Paulo.Jan/Mar 2016 Epub Nov
permeability, steam flooded, high DLS 2015. Available from:
requirement, etc.) and other limitations (such http://www.scielo.br/pdf/prod/v26n1/0103-
as limited technology availability in 6513-prod-0103-6513170514.pdf
respective area, limited partner choices, [Accessed on 26 February 2019].
limited budget, etc.) always create [6] T. Pyzdek & P. Keller. The six sigma
challenges, but like two side of coins, there handbook 3rd edition. New York – US:
are always opportunities behind those McGraw Hill; 2010.
challenges. In this case, PT. SDEC was able [7] B. Smith. Lean and six sigma – a one-two
to optimize the opportunity to deliver punch, Quality Progress Press; 2003.
tremendous result within very challenging
environment.
Some recommendations and the next
opportunities are:
a. Apply this project improvement in other
project (align with “replicate” as 6 phase of
“the Juran approach”), the replication can be
started from similar project in different area.
b. The writer recommend to include this
improvement in standardized book of
Drilling Ultra-Shallow Horizontal Well in
UP field to ensure the continuity. This step
is to anticipate if all involved personnel
(person who knows this project) move from
D&C team or even from PT. SDEC, the
process still be applied consistently.
c. Consider the nature of drilling activities are
contains many variable (mostly the design
from well to well is always different),
recommend to use cluster/range approach as
comparison during analysis or perform the
analysis in detail and normalized un-
controlled (out scope variable).

References
[1] M.A. Fryman. Quality and process
improvement. New York – US: Delmar –
Thomson Learning Inc.; 2002.
[2] M.L. George. Lean six sigma: combining
six sigma quality with lean production
speed. New York – US: McGraw-Hill;
2002.
[3] Goleansigma.com. 8 Wastes. 2017.
Available from:

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APPENDIX 1. Voice of Customer

Voice of
NO Customer Clarification Customer Critical Requirement
Customer
Drilling cycle Business plan Refer to 12 well which drilled • Improving drilling cycle time,
time was team and in second semester of 2017, total drilling cycle time for 30
longer than Asset Team total cycle time was 119.9 days remaining well max was 225
1 business plan (average drilling cycle time was
days as per BP (average 7.5
9.99 days/well) compare to
business plan was 90 days (7.5 days/well) with cost $31.5
days/well) million for 42 wells (for 30
Well cost Total cost US $9,069,745 remaining wells= $22.430
higher than compare to US $9,000,000 million) and no delay on well
2 business plan deliverability (no delay on oil
production)
• Need to deliver same well count
Late deliver Well deliverability was late as per WP&B
wells around 2.5 days/well
3

Keep safe General No improvement allowed if Execute project with incident free
drilling Manager sacrifice safety
4
execution D&C

Need to D&C Risk assessment done in project Need to know more detail about
elaborate more level not well by well the well hazards within well by
5
detail about well
well hazards
Reduce run D&C Casandra survey need longer Need to review well direction to
Casandra time avoid run Cassandra survey
6
survey

Reduce D&C D&C team believe that there Minimize factors contribute to loss
controllable was several controllable factors circulation
factors which contribute to loss circulation
7
contribute to such as wells penetrating fault,
loss surrounding producer, etc.
circulation

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APPENDIX 2. Run Chart

Run Chart of Drilling Cycle Time of Improved Wells Expressed in Day Run Chart of Well Cost of Improved Wells

Run Chart of Drilling Cycle Time of Improved Wells Expressed in Hour/Ft Run Chart of Well Cost Expressed in US$/Ft of Improved Wells

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VOL. 7 NO. 2 YEAR 2019 DOI: 10.21776/ub.jemis.2019.007.02.4

APPENDIX 3. Why Tree

Longer drilling cycle time

Additional trip for

High NPT (31%) logging

Rig Equipment
Well Problem Problem
(additional trip, ST, Waiting on (drawwork, TDS, Can't run LWD
reaming, etc.)
mud pump)

Loss circulation Sensor too far

during drilling to Tight Hole & hole Lack of away behind the
collapse Weather WO transport maintenance
LP bit

Hydrostatic less
High permeability Chemical reaction than formation Hish stress on Transport still No dedicated Field magnet
There is live Depleted zone formation High ECD Cross fault water & formation wellbore maintenance interference
pressure utilized by other
producer well (longer time as
close to proposed
impact of
well (within weather)
drainage area)

Improper DRL No clear Blind drill using 2%

parameters Improper mud information about Improper mud Improper well Improper well
properties KCl water only (not properties direction direction
(flowrate too high) fault good properties
mud)

Rejected by
production team
due to loss Prod. if Hole cleaning
well shut in (refer simulation) In-accurate
New mud engineer pressure Very long time to In-accurate
prediction mix good mud (not New mud engineer pressure
catch up the loss prediction
rate)

Why Tree of Longer Drilling Cycle Time and Higher Well Cost of Ultra-Shallow Horizontal Well in UP Field

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