Most workovers are associated with oil wells. Workover rigs are used to pull tubing for repair or replacement of rods, pumps and tubular goods which are subject to wear and corrosion. A low level of workover activity is particularly worrisome because it is indicative of deferred maintenance. The situation is similar to the aging apartment building that no longer justifies major renovations and is milked as long as it produces a positive cash flow. When operators are in a weak cash position workovers are delayed as long as possible.
Workover activity impacts manufacturers of tubing, rods and pumps.
Service companies coating pipe and other tubular goods are heavily affected. This update begins a series on crude oil pricing issues on a new page by examining some of the conflicting goals of OPEC members.