Continuing oil price pressures increasing operator focus on well integrity and prompting renewed investment in innovative technology to minimise integrity risks

Since 2009, it has been estimated that poor well integrity has cost operators around the world over US$75 billion. As oil prices continue to plummet and margins remain low, operators are becoming increasingly sensitive to these risks. As such, conversations around safety, well integrity and regular maintenance are slowly coming to the fore.

Towards the end of 2014, FC Business Analyst, Jamie Davies, was quoted saying: “We’ve seen a definite sharpening in focus on well integrity over the past two years as operators face up to the fact that a partial or disjointed approach to this crucial issue has a big effect on their balance sheets.”

Dr Liane Smith, Managing Director and founder of Wood Group Intetech, has recently restated how, nearly 10 years after the first well integrity management systems were implemented, well integrity is increasing in importance as operators are “concentrating on squeezing maximum value from existing assets”. She rightly points out that optimised production from wells “must be achieved without worsening damage mechanisms like erosion and corrosion”.

The scale of the integrity challenge was highlighted at the recent Well Integrity Conference where, as an example, it was estimated that half of the wells in the Middle East have integrity issues, with 10-15% of these being critical.

However, while well integrity management systems have been in use for nearly a decade, as Davies has pointed out it is only relatively recently that well integrity strategies have started to be implemented into the initial phase of the design process. There still remains considerable scope for innovation and development in this area however - embedding well integrity planning even deeper into initial design phase. To support this operators need more information, and also more timely information, to mitigate the risk and cost of intervention and this means investing in intelligent tools that provide real-time information.

With substantial cost savings to be made, we anticipate seeing investment in technologies that significantly increase the data and information available to engineers during the planning phase over the next few years. While problems will always arise, innovative tools are already beginning to transform the industry’s approach to well integrity – and this can only be expected to continue, as the market’s future remains unpredictable.

Indeed, as Jamie Davies highlighted: “Well integrity has always been paramount to successful oil and gas operations… Traditionally it has not received the levels of investment which you would expect for such a key focus area, but I think that, with all that has happened in the last several years, 2015 will see well integrity come into its own.”