Cost Reduction Strategies in Workover operations in the Face of Low Oil Price: The Agbada Workover Project

Abstract

The current low oil price has resulted in several continuous improvement drives particularly focused on capital efficiency. With over 60 producing oil fields and approximately 700 producing wells, some of which date back to the 60s, work over operations in Shell Petroleum Development Company (SPDC) is imperative. Having completed over twenty (20) Work Over operations in the last six years in SPDC, the importance of Work Over operations as a means to sustain production especially for relatively old, dysfunctional or non-compliant wells and keep the production funnel full at a relatively lower cost compared to new drills is more evident. Work over operations, defined as the repair and/or stimulation of existing wells in order to improve production performance presents the opportunity to maximize short term gains from already existing facilities. The objective of the workover operations on Agbada ABC and XYZ was to restore well integrity with the installation of sub surface safety valves and gas lift mandrels instead of insert orifice while assuring the development of oil and associated gas. The insert orifice had been installed on both wells to enable gas lift operations from the Agbada Associated Gas Gathering (AGG) plant since they were unable to sustain natural flow. However, due to epileptic AGG, both wells quit frequently requiring nitrogen lift with an average Non-Productive Times (NPT) of 6 months per year while Agbada XYZ was put on cyclic production and had been a pressure build-up well with at least two weeks down time per month. The workover operation was therefore proposed to replace the existing (punched) tubing, install proper gas lift mandrels for optimum performance, reduce well operating cost arising from AGG outage and/or compressor failure and restore production in the reservoir. This paper aims to discuss the cost reduction strategies such as collaboration, re-use, program optimization and operational efficiency applied in driving down Non-Productive Times (NPT) in the efficient delivery of these workover operations which resulted in <6% NPT, >30% time savings, ca. 40% cost savings and early return of wells to production.