Case study: Saudi Aramco obtains 250% ROI and reduces drilling costs
The Saudi Arabian Oil Company (Saudi Aramco) is the largest oil company in the world in terms of proven crude oil reserves and production.
For the people on the front lines—those who actually manage oil fields and schedule drilling operations—keeping up with production demands can be challenging. Challenging because several issues must be considered in deciding how to put together a rig schedule: which wells to drill, and when to drill them. For example:
- Multiple types of rigs are available for use, with differing configurations, so rig/well compatibility issues must be addressed;
- Wells are not always available for drilling when expected, so last minute schedule changes must be taken into consideration;
- Crew availability and preparedness must be considered;
- Unanticipated complications can arise during actual drilling operations: for example, special equipment delivery delays and unexpected rig breakdowns.
Many of these issues result in conditions that are fluid; they change continually, which creates added disruptions. What's more, conflicting objectives can further complicate matters. Drilling management must keep rig transportation costs within a budgeted target, for example, while reservoir management doesn't have the same goal.
Generating an ideal drilling schedule, which meets everyone's needs and satisfies an ever-growing demand, is a complex process, and the greater the number of variables introduced into the process, the more complex it becomes.
Taking steps to improve rig scheduling
The number of drilling rigs in use at Saudi Aramco has recently expanded by approximately 300%, and the number of oil wells has grown by an even greater percentage. Since there is not a one-to-one relationship of one rig for every oil well, rigs must be moved from one well to another. And drilling rigs are large, bulky, heavy pieces of equipment, so the cost of transporting a rig from one well to another is substantial.
Saudi Aramco had been deciding on the allocation and transport of rigs by having people study a map displaying the location of the rigs and the wells, and then manually creating the rig movement plan and drilling schedule. The company clearly needed a better way to generate schedules for this complex operation.
After learning about Actenum'ss software at a conference in early 2006, Saudi Aramco arranged for Actenum to visit Saudi Arabia to watch the rig scheduling team at work, and to hear their specific needs. This resulted in the development of a software solution (DSO/Upstream) (originally named Actenum RAS) that was based on Actenum's existing software, customized for Saudi Aramco's specific requirements for improving the coordination and scheduling of drilling rigs with oil wells to minimize rig transportation costs and improve overall production.
Saudi Aramco's results
Once the the Actenum solution was installed for the Drilling and Workover scheduling team, they quickly produced some impressive results. Financially, Saudi Aramco achieved a 250% Return on their Investment in Actenum's software, which significantly reduced their rig transportation costs (by approximately $3 million in the first six months of use). While this was their number one goal, Saudi Aramco can also use the software to optimize oil production. At the same time, Actenum has provided other important, but not so easy to measure, non-tangible benefits as well, including:
- Developing a yearly plan is done in a few minutes, while the former, manual approach used to take a couple of people up to two days to complete;
- Planning and scheduling is done with greater accuracy;
- The software minimizes rig moves; previously rigs could pass each other on the road moving in opposite directions, swelling transportation costs; and
- Collaboration between rig scheduling and well production management has been enhanced.
Since their initial deployment of the software, Saudi Aramco now runs the software for six to nine month window increments. And to make sure they stay current on changes in the environment, they'll rerun the solution when appropriate to account for operational changes and disruptions.