When your company doesn’t control enough of your markets to affect pricing, as is often the case with large commodity producers in a crowded and competitive market, the only way to improve profitability is by increasing output or reducing costs.
Such is the situation for operators working in tight oil and shale gas fields, as Tom Bass reminds us in his article in the November 2018 issue of World Oil, Achieving Production with Efficiency: Keys to Profitability. So where should producers look to improve operations and increase profits?
The most important profitability gains are those made internally by re-evaluating legacy operating practices and engineering standards. One of the main ways to do this is by revisiting some of the automation projects left undone previously. Wireless-enabled instrumentation and remote telemetry units (RTUs) are the most cost-effective and low-risk enablers of this approach.
The undone projects he’s talking about are often final improvements that were planned for various well sites, but never quite carried out. Many companies ran their wells as hard as they could during the boom, leaving some tasks to be done manually. Those projects got pushed back even farther during the downturn, but now it might be time to revisit them to take advantage of reduced costs through automation, facilitated by the information provided by wireless instrumentation.
The clearest value of wireless technologies is avoiding the cost of wired infrastructure. The next largest source of saving is the reduction of engineering and programming, which is possible by using the drag-and-drop capabilities, which are possible through a distributed wireless RTU network. It is much easier and faster to establish new wells on a reliable communication link to the SCADA backhaul network as well as other local network nodes.
Wireless saves installation costs substantially, but it also has the ability to reduce integration costs thanks to highly intuitive programming tools available with today’s RTUs working in conjunction with WirelessHART. It’s much easier and far less expensive to use these tools than traditional methods, and they can have a major positive impact on operational costs.
Beyond initial drilling and completion operations or subsequent infill expansions, the value associated with an existing wireless sensor network extends to asset and production reliability, as well as health, safety, security, and environmental risk mitigation. Improvements in any one of these areas have a direct impact on reducing overall lease operating expense, which reduces production costs per barrel and feeds cash flow for an operator’s drilling program.
Read the full article for more details on reducing chemical additive usage, wellsite operator call-outs, and equipment repairs. Even something as basic real-time inventory monitoring can capture thousands of barrels of additional product that might go unrecognized.
You can find more information like this and meet with other people looking at the same kinds of situations in the Emerson Exchange365 community. It’s a place where you can communicate and exchange information with experts and peers in all sorts of industries around the world. Look for the WirelessHART and Oil & Gas Groups and other specialty areas for suggestions and answers.