WHAT’S SO WRONG WITH cheap AFTERMARKET THREAD REPAIRS?

We recently saw a user of our connection technology needing to recut nearly his entire string, after only 200 hours of service. It was sent for inspection and the company decided to recut ”damaged” connections to the tune of over 300 out of the 800 connections. And, they did it cheaply, using a threader with no ties to the OEM material (no access to traceable gauges or to original drawings, etc.) – thus saving the ‘costs’ of the OEM.

 What did this cheap job cost the company?

As another inspection was required by the operator upon arrival in the Gulf, when the rig came out of warm-stacked status, a Third Party started kicking out joints which did not pass inspection, to the tune of 75% of the repaired connections being out of tolerance.

Our Client is not interested in sharing numbers, but a quick calculation allows us to get a feel for the associated cost.

The initial repair cost

·       Inspection ($50/jt x 400 jts)                                              $20,000

·       Original “Repair” (300 connections at $175/EA)          $52,500

·       Tong Loss (Approx. 1.5” x 300 jts)                                   450 in.

To stress the importance of tong loss, it is necessary to highlight that it can define the product life. To put things into perspective, 300 joints of drill pipe with 12 in. pin and 15 in. box tong spaces have 8,100 in. of tong space, of which 3,200 in. is recut length; that is, what you can cut off before the pipe tool joints are too short to properly make up connections. Then you have to junk the joint.

We were contacted at that time and our local Licensee tried his very best to minimize the material loss in order to leave some life in the product. He picked up the lead but, unfortunately, the previous ”repairs” were so poor that, in some cases, more than 2.5 in. of material loss was necessary to reconstruct a good connection.

So, fast forward, we now have 300 joints, which have had an average of 1.75 in. of tong space removed from either the pin or box end in the initial repair job and need further repair with no use of the pipe in the meantime. Now, the OEM Licensee has to fix the issue, and will cut on average 2 in. of tong space, for a recut costing $275/end. As this would take more tong space than allowable on some of the joints, and in order to minimize tong loss, it was necessary to carefully pick up the lead on the thread (cutting the new thread in the previous one) and doing so costs more as threading time increases by roughly 50%, so what would have been a $275/ct. job is now at $415/ct.

The remedial repair cost

·       Inspection Cost ($50/jt x 400 jts )                                   $20,000

·       Recut (225 connections at $415/EA)                              $93,375

·       Tong Loss (Approx. 2 in. x 225 jts)                                   450 in. (additional wastage)

But tong length loss can be monetized; 450 in. of loss on 300 joints of pipe represents a product life loss of about 19% (450 in. out of the 2,400 in.). In financial terms, you can consider that this is the equivalent of junking 19% of the 300 joints. Considering a purchase price of 110 USD/ft for range 3 pipe, we are talking of $282 K. To build an accurate picture, this is a much larger hidden cost that would needs to be added to the above.

In summary, what was expected to be a low cost repair job for a value of $72 K (or $82 K at the OEM workshop) ends up with an additional cost of $395 K to fix it ($113,375K spent on a second unnecessary repair and a hidden cost of $282 K on product life).

This case perfectly illustrates the importance of using the OEM network of licensed workshop to maintain the product, and to keep its warrantee, and not to be tempted by the cheaper bootlegged options.

Going cheap is seldom cheap in the end!