BP hunts for quicker payback in older oil fields during downturn - Report
Bloomberg reported that BP Plc and Halliburton Co. are looking to the world’s older oil fields to survive the worst crude market crash in decades.
While shale fields in the U.S. are being hailed as the new swing producer because of large output that can be ramped up quickly, older wells in so-called brownfields are the sleeping giant, Mr Ahmed Hashmi, head of BP’s upstream technology, said.
Mr Hashmi said that “Brownfields are the silent one; shale is the more visible one. Some of the best investments in any environment are in brownfields. In the onshore today, it’s probably the quickest payback.”
According to a September 2015 presentation from Halliburton, the world’s second-largest oil services provider, the International Energy Agency on Monday forecast that total U.S. crude output, most of it from shale basins, will increase by 1.3 million barrels a day from 2015 to 2021 despite low prices and less spending. Roughly 70 percent of global production comes from mature fields.
Mr Mark Richard, senior vice president of global business development and marketing at Halliburton, said that “Mature fields is a good play right now. We’re seeing a lot of customers moving back in to do a lot of well intervention-type work.”
Outside the U.S. and Canada, activity in older onshore fields is expected to be the most resilient this year, Halliburton projected in October.
Mr Hashmi said that working in older fields requires using digital technology to monitor output in wells to calculate the best time to go back in and boost output. Sometimes that job involves clearing out debris such as sand that can gum up the well and slow down production.
He said that BP has boosted its so-called operating efficiency, or the amount of time an existing well is producing, to 95 percent over the past five years.
He added that “That is actually akin to building a new profit center.”
Source : Bloomberg