Value Engineering to Achieve Low Drilling Cost

Abstract

After more than a century of fossil energy exploitation, the oil and gas industry is nowadays facing challenging period. There are unstable oil price evolution and only difficult & small- marginal reserves left to be developed.
Nevertheless, due to still high energy demand, a systematic structured breakthrough must be initiated to respond to this industrial volatile environment. One of the approaches is value engineering to lower down oilfield project cost. The foremost target is the reduction on drilling cost, knowing that this cost represents a significant portion, around fifty percent, of the oilfield development expenditure.
Value engineering identifies and eliminates unwanted costs/ operations, while continuing to improve the quality, safety and performance. By doing this, it could generate lower drilling cost and allows field development becoming profitable.
Drilling duration of 4000m Mahakam wells, improved from 24 to 15 days, is an example of utilizing the value engineering approach.
The value engineering methodology is divided into three steps job plan: identify opportunities, evaluate and then implement a new concept. In general, after analyzing and identifying unsatisfactory performance, brainstorming session should be carried out to capture new ideas. All ideas are evaluated, followed by the best ideas/ alternatives selection for further development. The best beneficial ideas are then implemented.
To give a maximum benefit, this value engineering has to be performed continuously, involving crossed-functional and experienced team. Successful value engineering could be indicated by having high performance culture among the team member such as: competent personnel, continue improving the efficiency, keep innovating, maintaining synergy and collaboration with others, and profitable growth.