Gas Lift A Service Company Perspective
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Transcript of Gas Lift A Service Company Perspective
Gas LiftGas LiftA Service Company A Service Company
PerspectivePerspective
Gas Lift Workshop February 2003
Brian A. Matusek
2 Initials
Artificial Lift Market Info and Well Distribution
World: 830,000 wells
Canada 48,200
US 500,0
00
Argentina13,50
0
FSU 115,00
0
Indonesia 9,500
Venezuela
14,200Brazil 6,300
Peru 4,500
Nigeria 300
Egypt 1,100
Oman 2,300
China 77,000
India 3,000
Australia
1,100
North Sea 600
Germany
1,000
MM$Rod Pumps (reciprocating) 670Gas Lift 110PCP's 260Electro Submersible Pumps 980Hydraulic Pumping 25Others 10
Worldwide Expenditures 2,055
(excluding CIS and China)Spears 2001 Annual Spend
% WW Wells WWRod Pumps (reciprocating) 71% 443,000Gas Lift 10% 62,000PCP's 6% 39,000Electro Submersible Pumps 10% 61,000Hydraulic Pumping 1% 8,000Others 2% 15,000
* Total Systems 100% 628,000
BY WELLS / SYSTEMS (exclude CIS and China)
3 Initials
Artificial Lift Market Evolution
0
200
400
600
800
1000
M$
Mar
ket
1990 330 500 160 16 140 1146
2002 985 550 110 270 60 1975
ESP Rod Pump Gas Lift PCP Other Total
* Excludes Russia and China.
Artificial Lift Industry has grown by more than $500 million in the last 12 years
4 Initials
Gas Lift – Areas of Opportunity & Encroachment
Land Gas Lift Applications Growth Opportunity - De-Watering Gas Wells with Gas Lift Encroachment - Electric submersible pumps; some PCP applications due
to drawdownInland Bay & Offshore Gas Lift Applications Opportunity – Competitive due to infrastructure limitations, available natural
gas; alternative uses? Encroachment – Electric Submersible Pumps and other lift methods as reliability
improves Offshore Deep Water/Sub Sea Gas Lift Applications Still undefined, although systemic issues currently limit application depth
Land Inland Bay & Offshore (Shelf)
Offshore (Deep Water/ Sub Sea)
5 Initials
Largest Oil-Producing Companies, mb/d
6 Initials
Contribution to Falling E&P Costs
Source: Salomon Smith Barney
1995 to 1997
Drilling Technology
Horizontal Drilling
Subsea
CompletionsFracturing
Seismic
46%8%
26%
5%
11%
4%
7 Initials
R&D Spending 1990 to 2001
8 Initials
Return on Capital Employed - Oil Service Companies
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
'94 '95 '96 '97 '98 '99
WACC = 12.2% Source: Simmons & Co.
9 Initials
Product Development Processand Risk Reduction
Size of Effort
Risk
Time
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So what is taking Schlumberger so long to introduce new Gas Lift
Products?• SLB Systematic approach to the Product Development• Technical Audit of Gas Lift Product Line mandated the
“re-engineering” of several product lines to accommodate the incorporation into the SLB Engineering Database and Manufacturing Process
• Over the past two years, SLB has invested a significant amount of its annual Gas Lift Revenue on the Sustaining and Re-Engineering of the Product Line
• New Product Development project commenced in 2002
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Business Issues affecting new Gas Lift R&D Decisions
• In the end, it is a Risk vs. Reward Proposition– Commercial Risk Factors
• Early Market acceptance of technology• Viable Business Model - Market pricing and volume which
allows for reasonable return on the R&D Investment
– Technical Risk Factors• Will it work! – that is, does it fulfill the product
requirement s• Can we build it for the original estimate?
• Other Influencing Factors– Marketshare Impact of new technology– Leverage across Schlumberger is an advantage– Strategic Initiatives can assist in project funding– Track Record
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Potential Gas Lift R&E Focus Areas
• Energy Optimization through engineering improvements
• Expanding the range of Gas Lift Deployment• Continuous Gas Lift Optimization• Systemic Improvement efforts with surface
equipment providers such as control valve companies and compression companies
• Reliability
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Concluding Remarks