Improving the Profitability of Production Facilities in Mature Fields
Authors: Johnson Donald E. 
Published: October 2008

What is an FOS

On the basis of the experience of over 350 Field Optimization Studies (FOS) conducted with the primary objective to improve the profitability of mature oil and gas producing and processing facilities, it is apparent that a significant amount of unrecognized profitability is available to mature field owners. Although 350 studies is a very small sampling of the total number of mature fields worldwide, these studies in total have quantified over ﹩2.5 billion in annual profitability improvement. The improvements are generally associated with a combination of both cost reduction and increased production.

Production increase opportunities are usually more valuable in respect to profitability than cost reduction and normally have a greater range of improvement potential. Improved facility operation performance in terms of better efficiency can be predicted to increase production on the order of 4% to 6%. However, it is not uncommon to see 20% improvement opportunities. These gains are significant because they can usually be realized quickly in most cases with little, if any, capital funding and minimum economic risk.

Study results have revealed some interesting characteristics. With respect to cost reduction, on an individual facility basis, the most valuable opportunities typically are in the areas of cost elimination rather than reducing purchasing price. Over the course of the total FOS samples, cost reductions in the order of 18% to 22% can be commonly anticipated as being available for most fields.

Several recent studies have identified opportunities for improving the reservoir recovery rate. FOS studies associated with reservoir analysis are less common than pure facility studies, but the performance results in a number of documented cases clearly indicate additional value potential for the effort. Obviously, these opportunities require capital, take more time to realize, and involve a need to seriously evaluate economic risk.

Justification for FOS

It is not the intent of this paper to provide a history lesson on the Oil and Gas Production Industry, but a brief history recap may be in order to help understand why significant profitability opportunity exists in many older producing fields. As field owners know, there have been many lost opportunities in instances where an old oil field has been sold cheaply and the new owner has literally made a fortune on its revitalization. With today's technology, there may be even more opportunities for substantial profit improvement than many mature field owners realize. The purpose of this paper is to explain how to determine if a profitability opportunity does exist in a mature field and if so, how to exploit that opportunity.

The search for new oil and gas reserves since the 1950's has become increasingly more technically challenging and notable more costly. With respect to petroleum reserves, the known worldwide volume of reserves peaked in the 1960's and in spite of remarkable advancements in technology to find, develop and produce new petroleum reserves, the demand for energy exceeds the industry's ability to fully replace the peak reserves.

Actually, this information is widely known and simply serves as a reference. In that respect, two points are significant.