Five steps to help E&P reduce costs
With Brent Crude dipping below $60 again this week, E&P companies have no choice but to look for options to reduce exploration and production expenditure and increase operational efficiency. Virtually all of the IOCs have announced some level of reduction in exploration investment and many have announced cost cutting measures including job losses as a result of the low oil price.
OPC has responded by introducing our 5 point action plan outlining key steps that E&P companies can take to reduce expenditure and increase efficiency:
1. Production under-performance
With over 25 years’ experience in reservoir surveillance and world leading expertise and innovative technology, our methodology utilises bottom hole pressure data to help pinpoint the root cause of production underperformance. There are a number of potential causes of underperformance, many of which can be rectified through well intervention processes to increase production efficiency and revenue from producing assets. In addition to our expert methodology, we have developed in-house software which allows us to process the large amounts of data at a much faster rate, reducing the time it takes to upload and carry out the analysis. Our work in this area has delivered significant increases in production revenues for a number of clients.
2. Integrated Well Testing
OPC are often asked to analyse data from well tests where incorrect methods have been employed to collect the data or the test has been poorly planned. This leads to inconclusive, ambiguous and false reservoir characterization, additional costs, delays and confusion. We have introduced our Fully Integrated Testing (FIT) Solutions, a service where OPC manage the planning, design, operations and interpretation of a well test, we act in the client’s interests at all times and ensure that expectations are managed and met. In some cases test duration has been reduced by 3 days which can equate to savings of hundreds of thousands of dollars. Our aim is not just to increase efficiency, but also to ensure that the correct test objectives are met through excellent planning, data acquisition and monitoring, ultimately allowing for optimal reservoir characterisation and for better informed business decisions.
3. Reservoir to Market
Last year OPC launched a strategic partnership with INTECSEA/WorleyParsons Group, the aim of which is to complement each other’s respective expertise and increase communication between subsurface and facilities companies to enhance the field development process by including all the subsurface reservoir uncertainties into the pre-FEED concept selection process to ensure the operator is able to consider all development possibilities. This is our reservoir to market full field development planning service – our alliance allows us access to facilities, topside, pipeline and subsea engineering expertise globally – increasing efficiency and reducing cost.
4. Localisation & knowledge transfer
Many E&P companies are required by specific country legislation to have a significant percentage of their labour force from the in-country population. While some companies are nervous of such programmes, OPC has been heavily involved in training, mentoring and knowledge transfer of skills such as reservoir engineering and well test interpretation. In countries such as Algeria and Kazakhstan, we have found that indigenous engineers can be developed, mentored and trained to deliver the work previously earmarked for ex-pat consultancy businesses. While this not only assists with localisation quotas, it can have significant benefits for efficiency and cost.
5. Appropriate expertise
All too often E&P companies pay high fees to large suppliers for outsourced or consultancy projects where a more flexible solution using training, mentoring and the right level of staff can deliver the project quicker, more effectively with longer term knowledge transfer benefits and immediate cost savings. OPC holds a unique place in the market whereby we can offer tailored, flexible solutions through the provision of technical support, consultant services and training services, all of which can be delivered in-house or at a client’s location for cost-effective flexibility. We are niche and very focussed on subsurface; with over 25 years of operating globally we have developed world class expertise to deploy on projects, ensuring that the quality and focus on each project is of the highest order.
These are our initial five steps that every E&P business should be considering in order to reduce cost and increase effectiveness. We hope that they have sparked some interest and please feel free to Contact us if you’d like any further details.
What’s your view? How can companies in the exploration & production sector reduce costs and increase efficiency? Comment on our LinkedIn page.