As oil prices remain low, maximising the efficiency of existing assets and safely abandoning inactive wells has never been more important. Using the latest monitoring technologies is one way operators can ensure wells remain profitable in an unstable market.  

The first quarter of 2016 has seen oil prices continue to decline and even hit their lowest point since 2003 at $27.67 per barrel. Although prices have shown signs of recovery in recent weeks, forecasts of stronger non-Opec production mean that excess supply on the market this year will likely sharply increase. Other moves in the market, such as Iran’s vow to not limit its production until it hits four million barrels a day, will exacerbate the supply trend. In these circumstances it is likely that any price ‘rebound’ will continue to be limited.  
 
With oil prices currently averaging around $35-40 per barrel, operators find themselves in a precarious position. New completions are difficult to consider, but low recovery rates from existing assets mean that huge numbers of wells are simply not economically sustainable. At the same time operators do not have the tools to confidently abandon wells, meaning that tens of thousands of wells are being left inactive – or in other words, in the least profitable situation.
 
These challenges apply to both conventional and unconventional plays. 
Indeed, unconventionals are perhaps even more susceptible to these challenges, as it is a market that has heavily relied on scale to maintain profitability.
 
Such unpredictable market conditions show no signs of short-term improvement. As a result, operators worldwide are evermore determined to find solutions that will reduce the break-even point on all wells and ensure they remain financially viable. 
 
The key to solving this challenge is acquiring the right data from within the well. Distributed Fibre Optic Sensing monitoring technologies such as DAS and DTS have previously been very much viewed as a ‘nice to have’. However, the current market conditions mean that they are now intrinsic to improving the economics of the oil and gas market.
 
Fibre sensing systems like our Helios DAS solution are key in delivering spatial information and insights from within the well. This extra layer of intelligence gives operators the data they need to improve production efficiency, enhance well integrity monitoring and provide the confidence that a well can be safely abandoned if necessary.
 
The real-time data that Helios DAS provides is fundamental to improving production efficiency in wells. For example, Helios DAS-enabled production profiling allows operators to identify the fluid phases that are present, any existing issues and flow rates. These combined factors enable operators to isolate water production, reduce the loss of product and ultimately, enhance oil and gas recovery.
 
Preventing integrity incidents is as important as maximising production. More than 25% of the world’s oil and gas wells have experienced at least one leak in their lifecycle. Helios DAS has the capability to detect a range of well integrity events, giving operators the insight they need to intervene when necessary and adopt safer and more efficient operational practices. Moreover, as operators retain liability for wells long after abandonment the integrity monitoring that Helios DAS delivers can also play a key role in abandonment. This monitoring increases the confidence that it is safe to abandon a well and minimises the resources needed to safely decommission wells that are no longer economically viable. 
 
The market conditions are driving operators to change the way they manage their assets. With the situation likely to worsen before it improves, now is the time to invest in the tools that will pay-off in the long-term and ensure that the tumbling oil prices don’t force operators out of business.