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Embed code for: سلطنة عمان
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e - Drilling contracts in the oil field :
Day rate contracts
Modified day rate (footage bonus) contracts
I Day rate contracts
This is the most common type of contract used worldwide. The drilling contractor is paid a specified sum by the operator for each day that he spends on the well. There is no performance bonus on this type of contract but the contractor can be penalised for negligence.
Most drilling contractors like this type of contract as there is little downside for them. They supply the equipment and personnel and, providing that they do not make too many mistakes, they can enjoy a regular income for as long as the well takes. There is no financial incentive for the contractor to drill more quickly or handle BOPs more efficiently; in fact the converse is true.