Cost Control Strategies in Oil Drilling Operations
Cost Control Strategies in Oil Drilling Operations
Blog Article
Oil drilling engineering is an activity with high technical requirements, wide involvement, and complex content. Because many content projects are involved, the amount of funds required for investment is large, and the production and operation risks are also high. Controlling the operating costs in oil drilling projects can reduce the investment in oil drilling projects, reduce the risk of capital investment, and improve the production and economic benefits of oil drilling companies. Based on the actual situation of oil drilling operation cost control, this article briefly discusses the current situation and problems of oil drilling operation cost control, and conducts a preliminary analysis and brief discussion on how to adopt scientific, advanced, and reasonable oil drilling operation cost control management methods to effectively improve the enterprise's management level and production profits. Keywords: oil drilling; operating cost; control; management Oil drilling operation costs are generally divided into two categories: direct costs and indirect costs. Direct costs include the direct labor costs incurred during oil drilling operations, and some common materials such as drill bits and diesel required for construction operations. Indirect costs include relevant taxes, risk fees, profits, and related costs such as management fees of affiliated units.
The content of oil drilling operations is relatively complex, requiring basic geological knowledge, mastery of operation methods of common drilling tools such as drill bits and drill strings, a series of drilling technologies such as vertical well anti-deflection and jet drilling, directional drilling, and certain construction methods for handling and preventing drilling engineering accidents. The operation technology requirements are high and the required knowledge is broad. Driven by reform waves, especially after the country joined the WTO, companies have carried out institutional reforms to adapt to the market's capitalization-oriented operating system. Oil mining and crude oil processing companies began to restructure and reorganize. After restructuring, the operating methods and management models of some oil drilling companies changed. Independent operation and self-financing altered the economic benefits of oil drilling companies. The reform and opening up of the market economy enabled oil drilling companies to enter market competition. To survive and compete for more market share and economic benefits, reducing investment, costs, labor costs, and material losses became top priorities. Some companies began implementing capital budget control management and cost reduction methods, using operating cost methods to manage and control oil drilling investments. Most have achieved certain control effects, but shortcomings remain. Drilling a well costs millions or even tens of millions, so companies want to save costs. Some are reluctant to update aging equipment or only buy new machinery when funds are available, leading to slow equipment updates. Aging equipment causes frequent mechanical failures, requiring repairs and halting production. This intermittent production delays projects, increases costs, and reduces profits. Some departments have implemented contracting systems, and construction enterprises formulated relevant management methods. However, due to the wide technical scope and varied personnel quality, control of construction processes is weak. Cost control in pre-drilling exploration, preparation, cementing, logging, and testing has increased. Materials, equipment leasing, and maintenance costs lack specific control. Exploration design is essential, but integrated management is lacking. Bidding processes do not always ensure quality control, leading to design deviations and errors. Production technology has yet to reach informatization and industrialization levels. Electronic control and intelligent drilling are not fully mastered, causing longer construction periods, operational pauses, and increased costs. Safety facilities are sometimes imperfect, negatively impacting economic benefits. Managers should adopt a long-term vision instead of temporary savings. Drilling speed is critical; extending drilling time increases labor, material, and risk costs. Updating old machinery improves efficiency, reduces accidents and repairs, accelerates project progress, shortens operation cycles, and reduces costs to increase profits. Establishing and improving rules based on contracting methods is essential. Enhancing management personnel’s business skills and modern management concepts strengthens construction process control. Costs should be strictly budgeted and controlled from staffing, material procurement, equipment leasing, to maintenance fees. Performing cause analysis on each project and operation node enables targeted cost control. Reward and punishment systems should encourage skilled workers and penalize negligence. Design management is key to cost control. A supervision and evaluation system for design results should be established, with strict drawing review processes to reduce design errors and deviations. Increased demonstration efforts reduce additional investments. Accelerating technical and economic integrated management through increased science and technology investment is necessary. Production technology should move towards informatization and industrialization, and drilling technology towards internationalization. New processes and technologies should be actively developed and promoted. Mastering electronic control and intelligent drilling, improving safety facilities, and handling complex projects reduce operation cycles and costs, improving efficiency and economic returns.Current Status of Oil Drilling Engineering Operations
Challenges in Cost Control Management
Slow Mechanical Equipment UpdatesImprecise Cost Control ManagementLagging Design and Production TechnologySuggestions for Improving Cost Control Management
Investment in Machinery and EquipmentFine Management and Strict Cost ControlUtilizing modern production management methods, including Drilling simulations, helps standardize management. Pre-operation forecasting and benefit evaluation reduce production risks and waste, ultimately lowering drilling costs.Strengthening Design Management and Technology Training
