Slashing costs by $16million on a mature field

What do you do when your average production is only 8 bopd per well and you have lots of wells? You can reduce your $/barrel cost just as effectively by reducing costs.

Problem

An operator had some 2121 producing wells with an average runlife of just over 3 years.. However, a small number of wells had rod pump systems with repeated failures in less than 6 months. The company culture is such that when a well goes down, the focus is to get it back on production as soon as possible – rightly so, but a step was missing. Repetitive failure of small number of systems in less than a year was costing the company an estimated $32 million per year.

What we did

On any well that failed in less than one year, the engineers specifying the replacement equipment were asked the question “Is this what you believe will give the best chance of a three year runlife?.”  Initially, the answer was ‘no’,  that changed! Solutions found and implemented were:

  • An audit of all equipment suppliers performed and the quipment provider who scored highest on the audit was given the majority of the work.
  • Applied pump off controllers on more wells
  • Applied VSDs to control
  • Stopped reusing low cost parts
  • Inspected more tubing and rods and developed a philosophy around when equipment should be inspected.
  • Lift specialists attended teardown of short runlife systems

Results

A mentality shift was made within, the team, whereby their focus was to run a system capable of achieving 3 year runlife. The number of systems failing per year in less than a year was halved, saving $16 million per year.