Abstract
This paper discusses the application of benchmarking to Heavy Oil operations in Western Canada. Benchmarking is used in many industries to compare performance among competitors. Benchmarking can enhance a company's competitive position which can lead to increased profitability and added value for the shareholders. The Ziff Energy Group, using its ten years of benchmarking the Western Canadian Exploration and Producing Industry, prepared an in-depth Heavy Oil Benchmarking Study with the participation of key Western Canadian heavy oil producers. The study covered the period January 1 to September 30, 1993. The report focused on benchmarking the main cost categories of "operating costs" for approximately 140 heavy oil fields. The classifications Included; well servicing, repairs and maintenance, property taxes and lease rentals, fuel and utilities, contract services, labour, emulsion trucking, sand disposal, and miscellaneous. Given the diversity in oil quality, reservoir characteristics, and royalty regimes in Western Canada the fields were benchmarked for each of the four main heavy oil producing regions: (1) Western Saskatchewan (2) East-Central Alberta (3) Cold Lake and (4) Southeastern Alberta. The study provides the producer with a practical tool to compare it's operating costs with competitors’ costs in the same geographic area. Such comparison can be valuable in developing plans to lower costs and increase profitability.
