Facilities Optimization: Harnessing the Full Potential of Your Well Site
What is Facilities Optimization?
In general, Facilities Optimization has focused on decreasing facility energy use, increasing equipment reliability, and reducing overall operating costs. In other words, doing more with less by boosting output or throughput using less energy.
The International Facility Management Association (IFMA) has typically characterized Facilities Optimization in terms of the three “Ps” of People, Processes, and Place. In the IFMA model, Facilities Management (FM) stands at the intersection of the three Ps, focusing on their interdependencies. FM gives us a framework for evaluating the performance of facilities and can be useful in identifying opportunities to eliminate waste, remove bottlenecks, reduce friction, improve productivity, and generate synergies.
In the upstream oil and gas industry, Facilities Optimization is concerned primarily with the efficiency and performance of well sites, production pads, and production facilities (i.e., central tank batteries and other shared assets). The goal of Facilities Optimization in the oil and gas sector is the same as it is in any other industry – doing more with less.
Unlike other industries, however, the oil and gas sector is working with natural resources where the primary asset is the proved reserves waiting to be produced.
Our focus is on realizing a well site’s full potential for generating the most value possible over the life of the well, regardless of its age and where it sits on the decline curve.
What is full potential?
Whether your well is newly drilled and still on flowback or further down the decline curve, it has a full potential to live up to. When operating at “full potential” a well site is operating cost-efficiently, free of operational constraints and in compliance with applicable regulations.
In general, a well operating at full potential is one where production is being maximized, unit operating costs are low and EHS risks are minimized. Achieving full potential, however, can be a challenge for even the largest operators.
“Full potential,” however, is different for every well since we are working with natural resources and the inherent variability in reservoir characteristics and natural processes. No matter how old a well site is, extracting the most value from it is an essential goal.
What is holding you back from realizing your well site’s full potential?
A lot of thought from experienced, well-trained, and educated staff typically goes into designing production facilities, so it is usually safe to assume that a well site was designed initially with efficiency in mind. This assumption, however, can often create “blind spots” leaving us vulnerable to changing circumstances that can generate inefficiencies and constraints over the life of a well.
Over time, variables can change as the result of equipment repair and replacements, new regulations, aging equipment, variability in production rates and timing, increased water production, changing production stream composition and other dynamic factors that may create inefficiencies as a well ages.
Factors that can hold back the performance of a well site:
Improperly sized equipment
Poor maintenance and repair processes
Leaks and venting that result in loss of sellable product and emissions
Changing equipment needs over time
Diagnosing inefficiencies and impediments to achieving full potential requires a systematic and comprehensive approach.
Environmental and safety performance is economic performance
Traditionally, safety and environmental considerations are seen primarily in the light of compliance and not operational efficiency. It is not possible, however, for a well site to achieve its full potential without good environmental and safety performance.
The best performing assets deliver both economic and environmental performance improvements.
The reason is simple – most environmental performance measures also increase natural gas sales volumes and convert what used to be a waste stream into incremental revenue. Solutions that reduce tank flaring and venting not only mitigate emissions, but also stop burning what is typically the most valuable gas on the well site – high-Btu tank vapor gas rich in NGLs.
Performance Audits – Getting the full picture on full potential
Assessing your well site’s full potential is best determined with a 360-degree view of your facility’s overall performance, including production, cost, environmental, compliance, and safety.
An objective performance audit becomes useful, by giving you a transparent and in-depth assessment of factors holding back your well site’s performance along with a roadmap for achieving its full potential.
A good performance audit should look at the interdependencies and interfaces between equipment and processes, which are often where inefficiencies and compliance issues are to be uncovered.
The performance audit is created by executing a straightforward, step-by-step process.
Step 1, problem definition. The first step is to, of course, define the challenge or problem. Typical events that signal a problem include:
Increased incidents of unexpected downtime
Pervasive tank flaring
Rising lease operating expenses, both on an absolute and per-unit basis
Notice of violations and/or fines
Complaints from the community
Most of the above events are symptomatic of one or more underlying problems. Diagnosing the root cause(s) of these symptoms is essential to developing a plan that will result in lasting performance improvements.
Step 2, critical factor analysis. We begin with the three Ps – Process, People, and Place, taking a deep dive into equipment, processes, and system interfaces. Factors we typically consider include:
Production stream composition and flow
Tank vapor volume quantification
Piping, including sizing, angles, and type(s)
Equipment age and condition
Oil and water storage systems
Well site power gensets
Site condition, including cleanliness, weed control, containment, and other factors
Production staff training, knowledge, and experience
Not evaluating all the above factors and process interdependencies risks treating symptoms instead of root causes. Otherwise, an incomplete plan may produce temporary improvements that inevitably fail to deliver lasting results once the root cause eventually resurfaces, or worse, can even create significant unintended negative consequences.
Step 3, identify key constraints and compliance issues. In Step 3, we identify the specific factors holding you back from achieving peak efficiency and performance.
These observations are very specific and based on both field inspections and interviews with key personnel.
Our experience developed from hundreds of performance audits informs our judgment and helps us evaluate information and data provided by client staff, bringing objectivity and transparency to the process.
Some common examples of key issues:
Inefficient routing of vent lines
Undersized combustors resulting in inefficient disposal of contaminated gas, creating emissions and increased wear on equipment
Improperly sized Vapor Recovery Units unable to safely handle actual volumes
Inefficient piping resulting in unnecessary and inefficient flow constraints and bottlenecks
Inconsistent equipment maintenance resulting in worn seals and leaks
Scrubbers dumping into tanks instead of heater treaters
Ineffective tank pressure management
Poor site conditions creating safety hazards
Improperly installed or repaired containments
The above represent only a few of the issues we have uncovered for clients in the past, and the list grows by the day.
Step 4, recommendations. Our recommendations are very specific and made in the context of your specific operations, offering you an actionable plan for achieving lasting performance improvement.
One of the key reasons our performance audits work is that we do not have a fixed set of generic “solutions” we pull off the shelf in every situation. Each well site or facility is unique, has its own characteristics, and demands a site-specific solution.
The main takeaway is that an experienced professional that has seen hundreds of well sites using a standard, proven framework of analysis can take an objective and transparent look at your operations, helping you avoid your blind spot.
The benefits of a comprehensive performance audit conducted by an experienced team include:
Identify opportunities outside of your potential “blind spot”
Solve the root cause(s) of performance constraints
Improved economic performance over the long term
Better environmental performance
Increased safety profile
Reduced risk of non-compliance
Conversion of waste streams into new revenue and higher production volumes
Higher uptime resulting from fewer unexpected process interruptions
Ultimately, you will have an actionable roadmap for achieving lasting performance improvement.
Contact us today at firstname.lastname@example.org to learn more about our solutions and how we can help you harness the full potential of your well site.