Abstract

From the summer of 2014 to the summer of 2015, global oil prices declined by nearly 60%. The initial impact of this decline on unconventional assets was to reduce or stop drilling and completion activity, but the lower oil price also had a significant impact on cash flow from existing wells. Operators were able to achieve some reduction in operating expenses through contract renegotiations with suppliers, but cash flow margins from sales of oil and gas from production operations were severely impacted. In fields with higher operating expenses due to corrosive environments, the need to manage costs became even more critical. For example, in onshore fields with highly corrosive reservoir fluids, production chemicals can account for more than 40% of monthly operational expenses. Reducing chemical spend can therefore seem like an easy way to reduce lifting costs. However, a reduction in treatment volume can lead to mechanical integrity issues that are more costly to remediate than to prevent, therefore requiring a strategy to balance cost reduction and mechanical integrity preservation.

A cost-conscious corrosion management strategy was developed and implemented for an onshore, sour-bacteria-laden oil from a shale oil development in south Texas. The strategy addressed treatment cost per barrel produced, the effectiveness of chemical formulations, metallurgies of downhole and surface facility components, and the cost of remediation. This full-spectrum corrosion management approach had a positive financial impact across the field.

Key performance indicators were defined and tracked, and a workflow was implemented to manage the large amounts of data from wells in the field. A lifecycle data management system was employed to not only capture failures, but also facilitate root cause analysis. This afforded the opportunity to design-out repeat failure mechanisms, for example by changing downhole metallurgies. This workflow supported the on-time optimization of chemical pumping rates, which reduced operating costs without ceding equipment integrity. This workflow reduced time spent toiling over corrosion management, thus saving on engineering resources.

Despite a challenging economic environment, corrosion management must be maintained in operational budgets. The example of the successful cost-conscious methodology used in the south Texas field shows that even dramatically reduced budgets can still support the safe, environmentally sustainable operation of an oilfield asset.

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