Premium Essay

Drilling

In: Business and Management

Submitted By Naoki
Words 1824
Pages 8
1. Case Summary
Northern Drilling (“Northern”), an exploratory diamond drilling contractor, was invited to submit a request for proposal from Mond Nickel Company (“Mond”), one of the largest players in the Canadian mining industry. Northern only has three weeks before the proposal deadline. However, Northern currently does not have a drill or the crew necessary to work on the contract, which requires experienced drillers. Northern needs to consider whether the contract is financially feasible for the company; whether the contract is worth the risk of spoiling Northern’s relationship with their current biggest customer, Noranda Nickel (Noranda); whether the contract would help in strengthening the business; and if it would aid the growth of the business as a whole. Would Northern be able to handle these issues?

2. Problem Definition
(1) How to respond to Mond’s request for proposal? Bid high or low?
(2) How to secure necessary resources to implement the job?
(3) How to maintain the relationship with Noranda, and a reputation in the closed mining guild?

3. Criteria Selection
(1) ROI (%): Will Northern be able to generate profit in line with management requirement?
(2) Labor availability: Does Northern have enough labor to handle the contract or not?
(3) Noranda: How does Northern’s decision affect its relationship with Noranda?
(4) Future growth: Is Mond’s contract essential for Northern’s future growth or not?

4. Alternative Development
(1) Will Northern respond to Mond’s request for a proposal or not?
(2) If Northern bids to Mond, should Mond apply for a deep job, intermediate job, or both jobs?
(3) In each job, should Northern buy a new machine or ask Noranda to tranfer a machine?

(1) ROI: Will Northern be able to make enough profit in line with management’s requirement?

Costs
Direct costs are calculated based on the number of shift in

Similar Documents

Premium Essay

Drilling

...entrance side and the presence of burrs on the exit side (unless they have been removed). Also, the inside of the hole usually has helical feed marks.[3] Drilling may affect the mechanical properties of the workpiece by creating low residual stresses around the hole opening and a very thin layer of highly stressed and disturbed material on the newly formed surface. This causes the workpiece to become more susceptible to corrosion at the stressed surface. For fluted drill bits, any chips are removed via the flutes. Chips may be long spirals or small flakes, depending on the material, and process parameters.[3] The type of chips formed can be an indicator of the machinability of the material, with long gummy chips reducing machinability. When possible drilled holes should be located perpendicular to the workpiece surface. This minimizes the drill bit's tendency to "walk", that is, to be deflected, which causes the hole to be misplaced. The higher the length-to-diameter ratio of the drill bit, the higher the tendency to walk. The tendency to walk is also preempted in various other ways, which include: * Establishing a centering mark or feature before drilling, such as by: o Casting, molding, or forging a mark into the workpiece o Center punching o Spot drilling (i.e., center drilling) o Spot facing, which is facing a certain area on a rough casting or forging to establish, essentially, an island of precisely known surface in...

Words: 920 - Pages: 4

Free Essay

Underbalanced Drilling as an Effective Solution for Drilling Issues

...Underbalanced Drilling Methods as an Effective Solution for Drilling Issues Rodrigo H. Ruschel Bridging Course Centre for English Language Teaching, University of Western Australia Semester 1, 2013 Introduction The Oil and Gas industry is looking for new methods of exploration and production. Currently, the oil and gas reservoirs are becoming more difficult to access because the operators are required to deal with complex and depleted reservoirs, such as low pressure zones, sub salt formations and tar zones. This is a challenge for both the on onshore and the offshore environment. These complications are directly related to drilling engineering because these professionals have to deal with complex situations involved in risks and pressure in order to keep operations under control. In order to avoid problems during drilling operations might causing financial and environmental issues, underbalanced drilling (UBD) methods have been implemented. These methods are based in which both hydrostatic and dynamic pressures in the circulating down-hole fluid system are intentionally kept below or the same as the pressure of the formation being drilled UBD methods have been used in order to defeat issues such as avoid formation damage, lost circulation, differential sticking and reduction of non-productive time. Also, it might improve productivity, reduce drilling time, bit life and also indicate reservoir zone productivity. UBD methods are appearing as an effective solution...

Words: 1878 - Pages: 8

Premium Essay

Offshore Drilling

...Offshore Drilling Does anything out weigh the importance of our planet’s health? You would be surprised by the number of people who look the other way when it comes to keeping the planet clean. Offshore drilling is just one of the major environmental issues that has existed for many years and still continues to be a problem. The topic of offshore drilling not only touches on environmental issues but also political, economic, and ethical issues. All of these tie into the huge debate over offshore drilling and its impacts on the environment. But when the human race depends on oil, how can we ignore the fact of drilling for oil off the coast of our land. Investing in greenhouse energy is just one of several ways to help keep the environment clean and continue to get the energy we need. America needs to realize that offshore drilling is a leading factor in pollution and we can’t keep collecting oil like this forever, we need to discontinue this process of drilling off shore and expand our possible options of renewable energy. So you might be asking yourself “how does offshore drilling affect our environment?” It all starts with finding the oil. The oil companies use a system like sonar that sends out waves, these “Seismic waves used to locate oil can harm sea mammals and disorient whales. ExxonMobil recently had to suspend exploration efforts near Madagascar after more than 100 whales beached themselves” (HowStuffWorks). Just the thought of going to your local beach to find...

Words: 1565 - Pages: 7

Premium Essay

Offshore Drilling

...Offshore Drilling – To Drill or Not to Drill The Effects of Drilling on the Environment and Business Lydia M. Wityk Strayer University Abstract This paper will explore the business of oil companies drilling off the coast line of the United States. It will explore the benefits from the business of oil companies to the detrimental effects of the oil spills from the offshore drilling. Should we continue to drill for oil off the coast with the possibility of additional spillage into the oceans. We know that oil spills damage the environment, and the social and economic welfare of the residents in the area. At the same time the oil companies can positively affect the economy and the United State’s welfare. In comparing both sides of the argument I will look at the past and current oil companies to determine if they acted morally in their everyday business practice. At this post-BP disaster era, the United States is questioning whether we should continue to drill and expand our drilling. I will utilize the consequentialist theory to determine what would be the best next step for the U.S. to take. Using the current information gathered on BP’s business practice and the effects of the oil spill, I will weigh the ratio of good to bad to determine my opinion on whether to drill or not to drill. Off Shore Drilling – To Drill or Not to Drill The Effects of Drilling on the Environment and Business The United States has been offshore drilling for oil since...

Words: 3209 - Pages: 13

Premium Essay

Offshore Drilling

...The History of Offshore Oil and Gas in the United States In looking at the history of offshore drilling for oil and gas, it has been a long and grueling process that has revolutionized the industry in its own. Beginning in the 1890s, oil companies have drilled wells in the ocean, but from wooden piers connected to shore. It wasn’t until the 1930’s, that Texaco and Shell Oil deployed moveable barges that were not considered ocean worthy to drill in the South Louisiana marshes. After years of trial and error, in 1938 the first offshore well was constructed by a construction company known as Brown & Foot for two independent oil firms known as Pure Oil and Superior Oil. The well was built in a field known as Creole Field and was considered the 1st offshore drilling site ever constructed. With this drilling site in operation, business opportunities for independent contractors and large oil companies developed with large research development programs in charge of finding new geological environments. With the vast amount of land being unused under the water, oil filled land would revolutionize the future of oil production, and flourish in record breaking profits. It is predicted that the largest hydrocarbon reserves and production during the next several decades will likely come from offshore drilling in deep water beyond 3,000-foot depths. With the offshore drilling and production industry just beginning it was unclear of just how successful it would be. In fact, many...

Words: 1097 - Pages: 5

Premium Essay

Offshore Oil Drilling

...Stop Offshore Drilling The environmental impacts of offshore oil drilling greatly outweigh the economic benefits provided. Although it has been a continuous activity for more than a decade, One can not help but wonder why offshore drilling continues when considering the pollution caused, how it eliminates the supply of natural resources, murders innocent sea creatures, and actually damages the national economy. There are, however, solutions to this problem. Before solutions can be presented, it is important to discuss the various problems. First, offshore oil drilling results in both sea and land based pollution. The Environmental Protection Agency, or EPA, claims that "with offshore drilling comes substantial routine pollution in the forms of oil and gas." By routine, the EPA means "a near constant flow from oil rigs and derricks" (Sisskin). Nothing is ever done about the pollution, and until something is done about the oil being put into the sea, our oceans are at risk. So just how much oil is put in the oceans? According to a study conducted by the World Research Institute, "...between 3 and 6 million tons of oil are discharged into the oceans every year" (Gorman 48). To put this in perspective, that is approximately 4 football stadiums filled to the top with oil. That is just every year...and this has been going on for more than a decade. In total, 45 million tons of oil in the past ten years that have been put into the oceans. There are several ways that oil ends up in...

Words: 1401 - Pages: 6

Premium Essay

Drilling

...energy. It is my position we should continue to drill wherever oil is available. There is a Congressional ban on drilling offshore in regions along the North Atlantic coast, most of the Pacific coast, parts of the Alaskan coast, and most of the eastern Gulf of Mexico (When a science fiction nightmare becomes a reality). The areas under the ban are estimated to hold over 18 billion barrels of oil but after recent estimates have increased the previous estimates of untapped oil in Gulf of Mexico from 9 billion to 45 billion barrels, there could be much more oil under the sea than previously thought. Environmentalists have argued against all types of drilling. They do not approve offshore drilling because of danger to marine life. They do not also approve onshore drilling because of the pollution risks involved to the extent of opposing oil pipelines. The recent oil spill in the Gulf has strengthened their argument further but they do not bring to the table adequate answers to American energy needs. Whereas the oil spill in the Gulf was a serious matter, it was just an accident and accidents happen all the time. The perception that oil pollution is a result of drilling is wrong. Equipment failure and human error are the causes. We do not stop flying just because there has been a plane crash somewhere. We identify the problems and fix them. The advantages of drilling far outweigh the disadvantages. We can still drill in a way that protects the world’s oceans and our coastal communities...

Words: 548 - Pages: 3

Free Essay

Donner Case

...Appendix II: Break-even analysis for Drilling and Profiling processes ............................................................ 3 Appendix III: Standard operation times (setup and run time scaled per board) ............................................ 4 Appendix IV: Total operation time results for the order sizes 1, 8, 200 and 800 ............................................ 5 Appendix V: Capacity in the DFPR area ............................................................................................................ 6 ! II! Executive Summary The Donner Company manufactures Soldermask over bare copper circuit boards. Meeting specifications of small and large electronic firms by a self-invented process making them one of the industry leaders. The routine process1 can be divided in three main stages - preparation, image transfer and fabrication (Appendix I). In both, image transfer and fabrication, it is possible to choose between two alternate technologies (manual vs. automatic) leading to the same output in a sub-process while differing in a fixed setup time and run time per board. Therefore, a break-even quantity was calculated for both in order to configure a decision rule on which option to schedule customer orders to achieve the smallest total production time (Appendix III). As a result, for manufacturing orders of more or equal than six boards the CNC Drill should be the preferred technology in the drilling process. However, for orders greater...

Words: 1688 - Pages: 7

Premium Essay

Drilling

...Recently the United States had the worst oil spills ever in history, and yet we continue to keep drilling and harming human life, animal life and nature as we know it. I do however understand that accidents do happen, but this was a 100% preventable accident. I am curious what the government and British Petroleum are doing to prevent a further situation like this from happening. I do understand that unfortunately this country is so depend on crude oil. However, I think that is the problem to begin with, we rely too much on crude oil. There are many other alternatives in the environment that can be further researched but I think the government is more worried about the dollar figure than our eco system. The United States is one of the biggest and most dependent countries to oil. History itself has shown us the affects of drilling offshore, yes they are rare but, they are very deadly. Oil spills can kill within a matter of minutes. It can take years or even decades to clean up and see rebuilding of its affects. We could put a man on the moon, make cell phones which talk, watch 3D television, but yet we cannot find another source or way to free ourselves from the dependency on oil. My viewpoint on life has always been the same, human life, animal life or even plant life deserves a chance to survive. As a child I was always worried about the environment and our eco system, what will happen to the next generation? If we don’t take care of it now what will it be like when I have...

Words: 422 - Pages: 2

Free Essay

Steps in the Fracking Process

...Step 6: Once the drilling gets about 500 feet above the shale formation, a downhole drilling motor with sophisticated measuring instruments begins the angle drilling creating a new horizontal path into the shale formation. Step 6: Once the drilling gets about 500 feet above the shale formation, a downhole drilling motor with sophisticated measuring instruments begins the angle drilling creating a new horizontal path into the shale formation. Step 4: The cement and casing are then pressure tested to ensure hydrocarbons and other fluids don’t seep out. Step 4: The cement and casing are then pressure tested to ensure hydrocarbons and other fluids don’t seep out. Step 3: Cement is then poured into this tubing throughout, displacing any remaining fluids and securing the casing in place. Step 3: Cement is then poured into this tubing throughout, displacing any remaining fluids and securing the casing in place. Step 2: The drill pipe and bit are removed and a steel “surface casing” tube is inserted into the well which stabilizes the well sides, creating a barrier. Step 2: The drill pipe and bit are removed and a steel “surface casing” tube is inserted into the well which stabilizes the well sides, creating a barrier. Step 1: Vertical well begins to be drilled with a drill pipe and drill bit past the ground water level a few thousand feet down. Step 1: Vertical well begins to be drilled with a drill pipe and drill bit past the ground water level a few thousand feet down. ...

Words: 724 - Pages: 3

Premium Essay

Business Ethics

...supplying a natural gas that burns cleaner than others because of the molecular structure it possess. This supply of natural gas allows the United States to be less contingent on foreign companies for energy supplies and provides royalties for the state of Wyoming. Questar drills and operates in close proximity to wildlife habitats that rely on the mesa, sagebrush and high elevation for survival. The Bureau of Land Management has specific limitations based on the habitat surrounding the drilling sites that Questar must follow to protect the wildlife. Studies were conducted that indicated that the restrictions were not sufficient enough to address the decline in the sage grouse; although Questar have followed the guidelines set forth by the Bureau of Land Management. The sage grouse are being considered for the endangered species list as it is believed to have a population of only 250,000 remaining. The argument that Questar presents is that the federal land was needed for the United States for drilling and mining. To reduce the impact of operations that would affect wildlife, Questar executives prepared a plan to invest in new technology. They petitioned for permits that would allow them to drill for the entire year at a single pad instead of closing down for the winter...

Words: 588 - Pages: 3

Premium Essay

Ethics Overview Bp Oil Spill

...but by that time, more than 4 million barrels of oil had been released into the gulf. The BP oilrig, owned by Transocean, Deepwater Horizon had been in operation in the Gulf of Mexico since February 2001. The rig was valued at more than $560 million dollars and worked on many different wells in the gulf. The last well it operated on was the Macondo well. It was this well that the oil spill came from and was brought about by several preventable errors on the part of BP and Transocean management and employees. The Deepwater Horizon vessel was an exploratory rig assigned the duty of finding oil, reporting it, and capping the well for another extracting type rig to come in and harvest the oil. While drilling the well, the rig encountered pockets of natural gas buildups where it was drilling. A week prior to the fatal explosion, Horizon encountered one of these pockets and the natural gas began to rise up the drill bore and began surfacing on the rig platform. When this happened, an immediate freeze was put on all activities to prevent an explosion. These same events would eventually play a part in the explosions aboard Horizon. A second major factor was the cementing process. When the well was being prepared for closure so another rig could use it in the future, the team...

Words: 5006 - Pages: 21

Free Essay

Donner Case Partial

...Introduction: Donner Company, a customized printed circuit board manufacturer is facing three main problems: productivity, quality issues and delayed deliveries. We start analyzing with a diagram showing information flow beginning from the customer placing the order to the delivery of that order can be represented as below. Customer places order Customer places order Estimate Labour and Material costs Estimate Labour and Material costs Prepare and submit bid Prepare and submit bid Check & Verify Design Check & Verify Design Detailed specifications and factory order by Altmeyer Detailed specifications and factory order by Altmeyer Normal Normal Customer accepts bid? Customer accepts bid? Yes Yes Promise delivery time Promise delivery time 1 day from bid accept-ance 1 day from bid accept-ance Rush Rush Scheduling & processing of order Scheduling & processing of order 4 days from bid accept-ance 4 days from bid accept-ance 2 days 2 days No No End End Material specifications by Schnabs Material specifications by Schnabs Delivered to customer Delivered to customer Send order to purchasing agent Send order to purchasing agent Shipping the order Shipping the order Instruct purchasing agent & procure material Instruct purchasing agent & procure material Blue print, factory order sent to Flaherty Blue print, factory order sent to Flaherty Blue print, factory order sent to Flaherty Blue print, factory order sent...

Words: 2220 - Pages: 9

Premium Essay

Management

...situation? Explain your choice(s). Feedforward control would have been the most useful type of control in this situation. The Deepwater Horizon accident had massive implications for the health of workers and nearby residents, the economy, and the environment. BP had a responsibility to take the potential dangers of their drilling operation seriously and plan for potential problems. There should have been backup protections to prevent accidents like the one that occurred. At the very least they should have practiced concurrent control. At the first signs of a problem they should have taken whatever actions were necessary to prevent the type of disaster that occurred. 2. Using Exhibit 18-2, explain what BP could have done better. First the company needed to measure their actual performance. They needed to look at their practices and analyze the data that they were receiving from engineers on the site to determine whether or not the work was being completed in the proper manner. Once this data was collected it needed to be analyzed in an objective way and compared to both the internal standards and the external regulations set by governing bodies for oil drilling operations. When issues were discovered they needed to be taken seriously by people at all levels of the company and appropriate action needed to be taken to prevent the explosion which endangered both BP employees and residents in the area. Management needed to act quickly and in whatever manner was necessary to prevent...

Words: 315 - Pages: 2

Free Essay

Rock Excavation

...information will provide an understanding of rock excavation and the various considerations (i.e. cost, local regulations, safety, etc.) contractor’s should have in mind when estimating and planning projects that involve rock excavation. The Rock Breaking Process When determining the proper method for excavating rock there are a few things you should consider. Determine how much rock you anticipate needs excavating. Is the rock solid? Is the rock easily accessible, how far below grade? Do the aesthetics of the rock matter in the end product? And is there any local regulations restricting particular methods? These are all questions that need to be answered before any rock excavation method begins. The traditional methods are ripping, drilling, breaking and blasting. Blasting is the controlled use of explosives to excavate rock and has been used for many years. When blasting a careful...

Words: 3885 - Pages: 16