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Oil and gas production encountered a world-historic challenge when Oil futures briefly traded in the negative numbers during April 2020. Many major and super major companies started merging for survival.
When oil and gas prices are low, the natural imperative for any oil company is to reduce both production and costs. Shrinking supply helps to offset demand, helping to return prices to "normal". Meanwhile, reducing LOE costs allows the company to manage staff efficiently and remain equipped so that it can return to a normal operating cadence when the market balances.
In order to take a look at the challenges facing the industry at large, let’s look at a microcosm (albeit a large one) as an example. The Permian Basin, which is still one of the largest oil and gas producing regions in the world, is experiencing challenges such as aging and declining production.
Oil companies in the Permian Basin started to reduce their drilling operations (or having this necessity forced on them) while also attempting to decrease LOE. Their traditional methods included:
The problem with the traditional approach is that the COVID-19 crisis was only the latest expression of a new normal in terms of lower oil production and lower gas prices at that time. Producers could not defer maintenance until production ramped up again. Not only would the pumps go offline, but the infrastructure could also fail in more-or-less permanent ways. There was perceived to be no way to resume production once prices returned to normal.
What’s more, producers could only cut production so much. Our natural gas clients experienced problems because running their compressors at reduced flow rates put them at risk of damaging their equipment. Oil producers faced similar risks. Running production equipment below normal operating thresholds can cause unexpected and undesirable behaviors—paradoxically increasing maintenance costs at the same time that decreasing LOE is most important.
In a nutshell, using IIoT can make traditional maintenance schedules a thing of the past. Operators can schedule less maintenance and leave equipment running for much longer without interruptions. They can then make more precise repairs and adjustments, resulting in shorter periods of planned downtime. This single aspect of IIoT can help oil and gas producers reduce their LOE and increase their revenue while growing their profits independently of the commodity market.
There are millions of oilfield assets and many are left unmonitored, and in need of optimization to deliver lower operating costs while maintaining top production. Lowering your LOE, operating more efficiently, and maintaining safety and regulatory compliance requires a new, digital approach.
Industry analysts report that asset optimization is being rapidly accelerated through the adoption of IIoT.
Our experience with producers confirms two things: First, data acquisition from remote assets and collecting manual data from field workers is an acute problem in the oilfield. Secondly, the benefits from digital technologies can drive meaningful improvements to operations.
Detechtion is a leader in asset optimization. We deliver a unique product suite of Asset Performance Management (APM), Industrial Internet of Things (IIoT) and Mobile Oilfield Management solutions.
Each product is designed to improve oilfield operations. Used together, they enable best-in-class operations, leading to lower operating costs and improved production.
We know our customers’ business needs because we've maintained focus exclusively on Upstream and Midstream Oil and Gas through the years.
We deliver the digital transformation and optimization of natural gas compression, oilfield chemicals and other production operations, saving our customers millions of dollars per year.
If you feel as though the economic climate has put a ceiling on your ability to generate revenue in production, reducing your LOE could help greatly.
With Detechtion's solutions, you can add authoritative intelligence to the process of reducing costs and increasing production.
Schedule a Discovery Call today to discuss how we can help!