How to Increase Oil & Gas Production in 2 Steps04/13/2015
Recent study shows that upstream firms use a small percentage of the data available to them
This is the second in a series of six blog posts that covers the six key ways for upstream oil and gas companies to adapt to today’s low-price environment. This post addresses the topic of increasing production.
Maintaining or increasing production from each well is critical for oil and gas operators to maintain revenue and free cash flow. Particularly as drilling slows, there is a bigger emphasis on existing production.
There are really two keys to managing production that are available to all companies: 1) having timely and accurate data that is available in a consumable format, and 2) analyzing the data to determine trends and exceptions in an automated fashion. In the webinar “6 Ways to Adapt to Low Oil & Gas Prices,” I discuss the production operations maturity model, moving from “unaware” at the lowest level to “optimized” at the highest level. Driving the two keys above moves a client to the “proactive” level, which is one below “optimized.”
When we think about field data, there are many types and sources, from manually collected production and equipment readings to SCADA and third-party data, such as analysis or outside operated detail. There are also economics projections from Aries or another solution. To meet the first objective, this data must be validated and put in a consolidated database in a timely manner, making it easily consumable. Many engineers spend their time collecting data in spreadsheets, but if companies want to reach the next level of maturity in production data management and more easily maintain and increase production, their approach needs to change. You can always throw more engineers at the problem, but that’s not sustainable or profitable.
Two interesting stats contained in a recent study done on data collection and usage, as well as their potential impact, support this position. The first stat indicated that less than 1% of SCADA data collected was used in decision-making. This means we aren’t using data effectively, i.e., there are no systems or tools in place to utilize the data. Small amounts of data are probably used by production accounting or production engineering, but this data is likely consumed via manual analysis of spreadsheets, which is neither effective nor efficient.
The second stat showed that better data analysis could boost production by 6-8%. We are not talking about spreadsheet analysis here; we are talking about scrubbing the data looking for anomalies, trends, and exceptions that may not be visible when analyzing small samples or short time frames.
Exception surveillance is based on rules that scan the data and trigger workflows and alerts when exceptions are noted. These rules can be complex, layered, and manage data from a variety of sources. The exceptions can then be managed by engineers or field personnel in a near real-time response. This reduces downtime and ensures production is at or near target volumes a greater percentage of time.
My next blog will cover best practices for managing capital expenditures. So be sure to check back in soon.
In the meantime, I’d love to hear your thoughts on strategies for increasing oil and gas production. You can reach out to me directly or contact us below.
About the Author
Tim Wadle, a Director of Product Management at P2, has more than 18 years’ experience developing software solutions for oil and gas companies and has served on many industry committees along the way, including the American Petroleum Institute’s Committee on Production Measurement & Allocation and the Energistics PRODML Executive Committee. His work has been published in Oilfield Technology magazine and he has also been a featured speaker at the Offshore Technology Conference. When he’s not behind his desk, you’ll likely find Tim either skiing one of Colorado’s slopes or biking one of its trails.