Surviving the Low Oil Price Cycle While Increasing Production Through Best Practices in Workover and Drilling Operations; Case Study of a Marginal Field in Niger Delta, Nigeria

Abstract Few companies had the impetus to increase crude oil and gas production to sustain revenue during the recent oil price crisis that rocked the petroleum industry. Multinationals, mid-sized and marginal independent oil companies were all impacted, suspending all field development activities such as drilling, workover, completion and recompletion. How do you survive as a company if you still manage your capital projects in a wasteful manner? What is your company's culture on project management? To efficiently manage your capital projects without creating huge debt for the company, you should have a culture on project management in place. This is one of the critical success factors surviving the low oil price trough ride. It was even more excruciating for marginal independents characterized by low production; high unit operating cost; hostile communities; poor credit rating; frequent pipeline vandalization for theft of oil and near zero economies of scale in projects execution. As a company, we were able to carry on with our field development plan to increase production and consequently revenue during the crisis because we have managed our projects, eliminating wastes even with high oil price through tested project management processes. These processes have been lumped into planning, execution and closing with other critical success factors such as: process ownership, incentive driven performance and smart contracting. The result was an unprecedented ten-million-dollar deviated well in the Niger Delta drilled to a measured depth of 11,000ft and completed dual. A second well was sidetracked with less than eight million dollars from 4000ft to 10,500ft at an angle of 40 degrees and also completed dual. Typical wells in the Niger Delta cost between eighteen million and thirty million dollars but for the systematic approach of a motivated team, huge savings were made at the same time increasing the field production by seventy-five percent. Performance from previous workover have been included in this paper to demonstrate the consistency of our approach to drilling project management. This paper will help operators especially small independent operators to manage their drilling and workover projects more efficiently to increase profitability bottomline and find their exit from huge debts arising from projects with high capital expenditure (capex).