Are You Doing These Things to Reduce Unplanned Oil and Gas Downtime?04/14/2015
For upstream operators, minimizing downtime events and increasing free cash flow go hand in hand
What everyone in today’s challenging upstream oil and gas environment wants to know is this: How can we increase our revenues and free cash flow? One key way is to increase production from existing wells.
Unconventional plays are characterized by high levels of production in the first 12 to 24 months followed by a steep decline, and then stable, low production levels for the remainder of the well’s life. Most CAPEX is on the front end with F&D activities like acquisition of land and seismic data. OPEX becomes more important post-drilling with pumpers, haulers, intense manual surveillance of the wells, and specialized engineering.
In an era of low oil prices, drilling activities will decrease because of the high capital requirements. Therefore, in order to increase revenue and boost production, it is necessary to focus on the low-hanging fruit – unplanned downtime.
Studies have shown that in the Gulf of Mexico alone, production efficiency stands at about 88 percent, which means companies are experiencing a 12% production loss. Unpacking that 12% a little further, 8% is typically due to unplanned downtime and 4% is generally caused by planned downtime and other external results.
There is good opportunity to reduce the duration of downtime events by doing the following:
- Detecting issues early and remediating them more quickly.
- Leveraging leading indicators and preventative activities to reduce the frequency of the downtime events.
However, in unconventional wells, it’s not uncommon for one engineer or operator to manage tens, hundreds, or even thousands of wells at one time, so to further increase production by understanding the underlying causes of downtime and taking preventive measures, it is imperative to optimize the processes by leveraging systems like field data capture and SCADA.
Knowing that the capacity for optimization through people will undeniably decrease, we have to fill these gaps with smart processes and workflows. Teams, therefore, must be able to give meaning to the data they collect from the field, which will lead to the creation of workflows and the automation of routine activities to identify underperforming assets and direct one’s attention to those. Combing through spreadsheets is a thing of the past; now it is necessary for systems to look at the data on the engineers’ behalf.
Leverage the investments that the business has already invested in, such as:
|Establish a set of rules, calculations, and data functions that periodically determine operating, regulatory, or integrity exceptions in the producing assets.|
|Direct information about the exception to the right role or resource, and assign the tasks required to correct the situation.|
By following these steps, I have seen operators reduce unplanned downtime by 20% or more, increasing their overall production by more than 1% as a result. In these times of low oil and gas prices, that 1% can make a big difference in increased revenue and free cash flow.
Want to Learn More?
Watch this webinar, “Every Drop Counts: How to Leverage SCADA and Field Data to Increase Your Production,” to learn more about getting the most from your wells using exception-based surveillance processes.
About The Author
Grant Eggleton, VP of Production Operations Solutions, joined P2 in August 2013 and is responsible for overseeing the delivery of integrated solutions that streamline business processes and eliminate silos among teams. Grant has worked in the real-time production space ever since he graduated from Edith Cowan University, where he earned a degree in Computer Science. His work on well surveillance and data virtualization has been published by IChemE and in MMS Magazine. In his spare time, Grant enjoys playing golf, traveling, and deep-sea fishing. He’s also a certified open-water diver.