January 19, 2021
Is spare capacity in your drilling program decreasing efficiency?
Can you spare some capacity?
Not the spare capacity that’s essential to success. I mean the hidden, unwanted capacity that’s a drain on your costs, and that exists because of inefficiency. While it’s important to think about this at any time, it becomes even more critical when you have to cut operational budgets but still meet aggressive targets. That’s when it becomes obvious that you need to find and eliminate the spare capacity lurking in your upstream operations. Excess spare capacity costs you, and if you focus on it, you can save a lot of money.
The spare capacity money drain
How does spare capacity manifest itself in the first place? Let’s look at some examples. If a rig is idle because it’s moved around excessively, or because parts aren’t available exactly when needed, that downtime is spare capacity. If rigs aren’t shared between different operational groups because there’s no proper collaboration going on, there’s spare capacity.
Taking steps to solve spare capacity
Today, every operator is challenged with doing more with less, more efficiently. They all have to think differently about operations and root out the inefficiencies. Many operators have already started doing so by adopting lean manufacturing principles and processes, both of which are aimed at eliminating spare capacity and improving production performance. Our oil and gas scheduling software is also being used to model multiple resource allocation scenarios, and test various assumptions about the well delivery process and the way it’s sequenced. In addition, more emphasis is being placed on decisions that involve trade-offs and there’s an encouraging trend towards better organizational collaboration.
So how do you find and mitigate this unwanted capacity? Well, you can start by:
- Digging into cost and value drivers that really matter to your rig scheduling processes;
- Looking at opportunities to push increased responsiveness and process reliability throughout your operations;
- Focusing more on demand-driven operations; and
- Searching for ways to improve operational collaboration that are centered on your targets.
Put the percentages on your side
We’ve heard on various webcasts that some companies think that there might be up to 30% spare capacity in their drilling operations. So how’s your spare capacity? And what’s it worth to you to shave a few percentage points off this number? Look into it now. There’s no time to spare.
Vice President Business Development