Annular velocity is the speed of fluid moving up the annulus and it must be high enough to transport cuttings generated while drilling from the wellbore. However, if the annular velocity is too high, it can create hole wash out and excessive equivalent circulating density.
When the drilling mud is circulated through a system, the moving speed is lower at location where the cross section area is bigger. Conversely, when the fluid flows through the small cross section area, the annular velocity at that point is higher.
The cross section area around drill collar and BHA has the smallest area so the annular velocity is the highest.
(Annular velocity around drill collar and BHA)
On other hand, the area around drill pipe has the biggest cross sectional area, hence, the speed of fluid around the drill pipe area is smallest.
(Annular velocity around drill pipe)
The annular velocity around drill pipe must be used to determine if it is good enough for hole cleaning because it is the lowest velocity in the wellbore. If the annular velocity around the drill pipe is good enough for hole cleaning purpose, it will definitely be sufficient for hole cleaning around drill collars, BHA and tool joints.
If you have some formations which can be easily washed out, you need to look at the annular velocity around drill collars, BHA and tool joints. The size of drill collars and BHA should be reduced if the flow rate can cause excessive wellbore erosion.
To adequately transport the cuttings from the wellbore, the annular velocity is affected by mud properties, rate of penetration, mud types, formation types, hole angle, size of cuttings, etc.
A formula for the annular velocity in an oilfield unit is shown below:
Va = annular velocity, ft/min
Q = flow rate, gallon per minute
Dh = hole diameter, inch
Dp = outside diameter of drill pipe, inch
Note: You can see the annular velocity calculation from this post => Annular Velocity Calculation
Reference: Drilling Hydraulic Books