Methods and Countermeasures of Controlling Drilling Cost under New Normal

Haixu Qu¹, He Huang², Haiqing Cui¹, Jingjie Liu³, Liang Zhao⁴

¹School of Petroleum Engineering, Northeast Petroleum University, Daqing, China.
²Economic Evaluation Center for Exploration and Development of Liaohe Oilfield Company, Panjin, China.
³Special Oil Company of Liaohe Oilfield, Panjin, China.
⁴Research Institute of Petroleum Exploration and Development, Beijing, China.

DOI: 10.4236/epe.2015.713055                

Abstract

The oil price drops in the international crude oil market and the benefit of upstream operations reduces which has been the new normal of oil companies so far. The upstream operations production and management of oil companies face numerous problems and challenges. One of the most significant aspects is to control and optimize investment. Drilling investment is an important component of development investment in drilling oil and gas wells. This paper proposes ways and countermeasures of controlling drilling cost from 3 aspects which are technology innovation, management innovation and system innovation on basis of studying drilling cost structure and influence factors analysis. The results have some guidance and exemplary significance to show how to improve production and management effect respectively on upstream operations of oil companies under new normal.

Keywords

New Normal, Drilling Cost, Upstream Operations, Investment, Innovation

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	Xu, K., Hu, W.G. and Wang, S.H. (2015) Development Strategy of China’s Petroleum Enterprises under Background of Low Oil Price. Oil Forum, 34, 3-4.
[2]	Lukawski, M.Z., Anderson, B.J., Augustine, C. and Capuano, L.E. (2014) Cost Analysis of Oil, Gas, and Geothermal Well Drilling. Journal of Petroleum Science and Engineering, 114, 1-14. http://dx.doi.org/10.1016/j.petrol.2014.03.012
[3]	Bahari, A. and Seyed, A.B. (2009) Drilling Cost Optimization in a Hydrocarbon Field by Combination of Comparative and Mathematical Methods. Petroleum Science, 6, 451-463. http://dx.doi.org/10.1007/s12182-009-0069-x
[4]	Power, M. (1995) The Effects of Technological Innovation on Hydrocarbon Discoveries. Resources Policy, 21, 263-273. http://dx.doi.org/10.1016/0301-4207(96)85059-8
[5]	Bernardo, M. (2014) Integration of Management Systems as an Innovation: A Proposal for a New Model. Journal of Cleaner Production, 82, 132-142. http://dx.doi.org/10.1016/j.jclepro.2014.06.089
[6]	He, Z.M. (1999) Discussion about the Comprehensive Control of Drilling Cost. Natural Gas Technology and Economy, 6, 106-109.
[7]	Nita, C.G. and Stefea, P. (2014) Cost Control for Business Sustainability. Procedia—Social and Behavioral Sciences, 124, 307-311. http://dx.doi.org/10.1016/j.sbspro.2014.02.490
[8]	Ma, X.Y. (2013) The Drilling Cost Management and Control Based on Project Team Management. Friends of Accounting, 3, 37-38.
[9]	Yang, C.B. and Fan, N.Q. (2013) Discussion about the Types of Drilling Contract in Sudan Petroleum Market. Chemical Enterprise Management, 24, 28-29.
[10]	Yang, J.H. and Guo, X.X. (2015) The International Drilling Contract Market in the Low Oil Price Environment. International Petroleum Economics, 23, 25-30.
[11]	Jiang, D.H. (2012) On Effective Control of Drilling Cost through Total Factor Cost Management of Single Well Contract. Journal of Jianghan Petroleum University of Staff and Workers, 25, 40-45.
[12]	Shiravi, A. and Majd, F.A. (2015) Foreign Investment in Iran’s Upstream Oil and Gas Operations: A Legal Perspective. The Journal of World Energy Law & Business, 8, 269-287. http://dx.doi.org/10.1093/jwelb/jwv005
[13]	Jin, S.Z. (2013) Discussion on Several Issues of Drilling Cost Control in the Oilfield Enterprise. Economic Research Guide, 10, 114-115.
[14]	Yin, D.R. (2008) Fine Management of Drilling Cost. China Petroleum Enterprise, 11, 88-89.
[15]	Si, G. and Wei, L.H. (2009) The Main Influencing Factors on the Drilling Cost and the Corresponding Controlling Measures. Natural Gas Industry, 29, 106-109.