As oil prices continue to drop to their lowest levels in several years, oil and gas companies have started to cut back on new investment. Inevitably, they will turn to optimizing their existing production infrastructure to continue to deliver the dividend levels that investors have come to expect.
The industry is not new to cycles of expansion and rationalization. Each time, we have seen a leap forward in capabilities in companies around production monitoring, management and optimization as they streamlined and redirected their focus and available investment.
Having already spent billions of dollars on wells, facilities and infrastructure, the opportunity before companies lies in ‘sweating’ these assets. They can do this by leveraging data continuously captured across the operation to clearly identify opportunities for performance improvement.
Appropriate field data capture and analytics tools will help deferment management encouraging production optimization and efficiency. Specifically, understanding deferment issues within the production area and applying the choke model concepts to help identify and prioritize the portfolio of opportunities to enhance production can return massive value to an organization.
While there are long-term, complex business processes and IT systems which can be deployed to support the optimization activity, there are short-term tactical and one-off analytics exercises that can be rapidly applied to a field operation to evaluate historical performance and short-term opportunities. Using the latter will help oil and gas companies identify value activities in a few weeks rather than the months or years taken to deploy new systems. Additionally, these initiatives can be used to try out the concepts with minimal investment for the potential value returned.