Oil Industry

 

Oil and gas are the fuels that keep our nation’s economic engine running. An important contribution to our national energy supply is made every day by thousands of oil and gas producers operating in shallow formations.

 

Fundamentally, there are three challenges producers face in keeping their wells on line - economics, basic physics and access to technology. Because many wells operate close to the edge of profitability, if oil and gas prices fall, the value of the oil or gas produced each day can quickly drop below the average daily cost of operating the wells. These costs include maintaining and operating pumps, transporting the produced oil or gas for sale, safe disposal of produced water, salaries, insurance, taxes and royalties paid to the owners of the mineral rights.

 

Any technology or new operating practice that can lower the cost of operating a well directly influences the profitability and the time that well can be kept producing.

 

Reducing costs and overcoming the physics of production both rely on technology. Unfortunately, many well producers have neither the capital nor the manpower to invest in developing new technology tools.

 

Mechanical failures are the cause of nearly one quarter of the abnormal production declines seen in wells. These mechanical failures are most commonly the result of corrosion, often exacerbated by the build up of corrosive brine in wellbores or its movement through production equipment. Marginal well operators must react to corrosion-sourced mechanical failures, but typically do not follow a proactive methodology for identifying problem areas and selecting the appropriate corrosion mitigation alternative before the failure takes place. As a result, opportunities for reducing failure rates and increasing production are missed.

 

Research suggests that 86 percent of failures in plunger lift systems are a result of corrosion damage brought on by produced brine. The inability to effectively deliver corrosion inhibitor to plunger lift wells leads to equipment failure, high operating costs, and premature abandonment.

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