Lower Cost Per Barrel
Price versus quality is one of the oldest trade-offs in business, but in the oil industry the general rule is pick the cheapest – regardless.
This approach is often dictated by corporate policy and supplier agreements. While that’s not always wrong – a Hyundai or a Hummer will both get you to your destination – it’s worth taking a moment to think about it.
We put our lift equipment downhole, expose it to heat, put gas and solids through it, make it run at high speeds and generally do our best to beat it up. In car terms, that’s a rough cross-country drive. You’d want the Hummer.
Just as cars differ, not all pumps are born equal.
The run time before failure can quickly make a cheap and cheerful option expensive and cheerless when you include the costs of downtime, replacement equipment and the workover cost.
Can you find the balance between equipment and maintenance costs vs. production revenues to achieve the lowest cost per barrel?
Our approach is:
- Working out where you’re spending your money and why (not as easy as it looks)
- Analysing where your production is coming from and what portion of your wells gives you the majority of your production
- Examining runlives, premature failures
- Inspecting the equipment specification and developing a suitable equipment plan for the lift method in that field
Now we have a basis for evaluating wells that we workover and we can ask questions such as, “Is this equipment going to give us the best possible chance of reaching our target runlife?”
Next, we need to make changes stick with accurate review and audit procedures to ensure that the design, assembly, installation, commission and operation steps are all being performed correctly for your field, long after we have left.
Lastly (and this is a bit we love), we make sure that you have the right purchasing strategy and agreements in place. We like contracts with aligned objectives, where your supplier is rewarded for equipment longevity and performance, not just for supply.
All this means your equipment in the ground has the best chance of longevity. When this process is used alongside our More oil and Fewer failures approaches to optimising oil production, the lowest cost per barrel is a given:
- The equipment is fit for purpose
- We analyse and monitor well performance to ensure the artificial lift is always performing properly
- We perform expert witness teardowns on all systems to determine the corrective actions to prevent recurrence of failures
Contact us to start lowering your cost per barrel.