Release Date: September 30, 2002

SAN ANTONIO, TX - Government and industry officials today announced a major innovation that turns an oil and gas drill pipe into a high-speed data transmission tool capable of sending data from the bottom of a well 100,000 times faster than technology in common use today.

The new system, aptly named IntelliPipe^TM, could revolutionize the way companies probe for oil and gas. It was developed by an engineering team of Grant Prideco, Houston, Texas; and Novatek Engineering, Provo, Utah, under a project funded by the U.S. Department of Energy.

"The IntelliPipe is one of the most remarkable advances in drilling technology in the last 25 years," Energy Secretary Spencer Abraham said. "President Bush, in the National Energy Policy, directed me to pursue advanced technology in energy production. I think the IntelliPipe is exactly the type of technology we need to move our domestic production capabilities into the next century."

IntelliPipe^TM is a drill pipe with built-in telemetry. It can transmit large amounts of data to the surface as fast as one million bits per second. It also will allow data to be sent the other direction just as fast, giving drillers the first-ever capability to "tell" a drilling tool what to do thousands of feet below the surface almost instantaneously.

The "smart pipe" has undergone several field tests and is expected to be introduced commercially sometime next year. Grant Prideco and Novatek have formed a joint venture called IntelliServ^TM to market the technology.

The 1-million-bit-per-second transmission speed is especially impressive given that for the last quarter century, oil and gas drillers have labored to read downhole drilling data at the painstakingly slow speed of 3 to 10 bits per second. Even today's common computer modems – at 56,000 bits per second – are speed demons compared to downhole drilling telemetry.

"In the drilling industry, the term ‘real-time' has meant ‘real limited' because the data rate has been so slow," said Mike Smith, the Energy Department's Assistant Secretary for Fossil Energy during a news conference at the Society of Petroleum Engineers Annual Meeting in San Antonio, Texas.

With the lightning-fast IntelliPipe^TM system, however, drillers receive high-resolution data almost instantaneously. "The drill pipe is no longer just ‘dumb iron.' Now it can be the conduit of a sophisticated computer network," Smith said.

The key to the new system is a unique non-contacting coupler embedded in connections between 30-foot long sections of drill pipe. The coupler permits data to be sent across the connection and on through a high-speed cable attached to the inner pipe wall.

For more than 60 years, engineers have struggled with the problem of a drill pipe connection, or "tool joint," that would stand up to the wear and tear of increasingly hostile downhole drilling conditions, yet provide reliable electrical connections every 30 feet over thousands of feet of pipe penetrating deep into some of nature's harshest environments.

Largely because of the stumbling block, in the mid 1970s developers turned to a technology called "mud pulse telemetry." Mud pulse telemetry foregoes electrical connections and transmits data as pressure pulses through fluid circulated to clean the cuttings out of the wellbore.

But the excruciatingly slow pace of mud pulse telemetry – 3 to 10 bits per second – often meant that data resolution was so poor that the driller could not make crucial decisions in real time. Often, time-consuming operations would be required to retrieve the downhole data or drilling would have to stop while other procedures were employed to confirm the low-resolution data pulsed to the surface.

Now, with a high-speed, bi-directional communications link, a drilling system's azimuth, inclination, pressure, temperature, loads and vibration, along with information on rock characteristics near the drill bit, can be evaluated almost instantly. Also, because of the ability to send high-speed data through the drill pipe, technologies once thought unobtainable – such as collecting seismic data at the drill bit – may now be possible.

With high-resolution seismic data collected "ahead of the bit," operators could steer the drill bit more precisely toward oil- and gas-bearing sweet spots and away from less productive areas. This will enhance the efficiency of oil and gas wells and reduce the number of wells needed to produce a reservoir.

It may also be possible to place sensors at select points along the length of drill pipe to monitor conditions throughout the wellbore and give operators early warnings of well control situations.

For the U.S. Department of Energy, the IntelliPipe^TM system represents one of its most important government-industry "success stories." The Department's Office of Fossil Energy helped begin developing the technology when it awarded a small business contract to Novatek in 1997.