New Mexico Commingling Rules And Their Effect On Automation
Authors: Sumerwell R.L. 
Published: December 2007

The New Mexico Manual for the Installation and Operation or Commingling Facilities was formulated by an industry study committee appointed by the Oil Conservation Commission. To those reading the manual for the first time, the requirements might seem quite stringent. Without the manual, however, there would probably be no new commingling installations approved by the Oil Commission in New Mexico today.

This paper briefly explains the thinking behind some or the more controversial requirements or the commingling manual and emphasizes the impetus added to automation through the privilege or commingling. It might be added that the Federal Petroleum Board and a number or State regulatory bodies were interested in the Committee's study and requested copies or the final manual.

Introduction

In April, 1961, the New Mexico Oil Conservation Commission issued a memorandum which indicated that commingling abuses were probably occurring. To this end the Commission appointed an Industry Study Committee, comprising 11 producer representatives and two Commission members, to propose installations which would be as "foolproof" as possible. The Committee soon realized, however, that the design or a completely "foolproof" system would be impossible. Then primary consideration was given to the design of systems which would minimize failures or accidental mismeasurements and which would facilitate detection of purposeful mismeasurement.

As a result or this work, the New Mexico Oil Conservation Commission issued Order No. 2060 which makes available administrative procedures for two types of commingling, i.e., [1) where two or more zones underlying a single basic lease and having identical ownership are commingled into a common tank battery, and [2) commingling production from the same zone underlying two or more leases [with diversified ownership] into a common tank battery. Exception to both Rule 503 [zone segregation] and Rule 309 [lease segregation] can also be obtained for two zones underlying two different leases.

GENERAL COMINGLING RULES

The Manual for the Installation and Operation of Commingling Facilities issued by the Commission outlines minimum standards which must be met for an installation to be eligible for administrative approval. While the various types of commingling installations may differ in design as well as operational procedure, certain basic rules apply to all installations. The following paragraphs contain comments or explanations of the general rules.

When wet oil commingling, it may be necessary to use the previous month's BS and w content to estimate the net oil production in order to stay within the assigned monthly lease or zone allowable, subject to the daily and monthly allowable tolerances permitted by the Commission. This will be particularly true when metering large volumes of water prior to dehydration.

The general rules also state that data such as meter readings, meter factor, per cent BS AND W, etc. shall be submitted with the monthly production report to the State or as an alternate retained on the lease for at least two years. Since this is obviously for auditing purposes, it would be hoove each operator and/or pumper to maintain clear and concise production records. It might even be prudent to note the meter serial number even though this is not required.

An allocation formula was provided merely to proportion differences between the system production and the summation of the individual zone or lease meter readings. Some discrepancies, although small, will be inherent in most all commingling systems.