Will it be a Miracle to bring down the Production Cost of Petroleum Product (per barrel) resulting either from EOR or Heavy-oil to be at par with that of Conventional Oil?
EOR or Heavy Oil requires an additional 5 - 10 $ per barrel with reference to the production cost of petroleum products of conventional oil (per barrel), while the potential production of EOR & Heavy-oil/Tar-sands (billion barrels) is nearly double the potential production of conventional oil (leaving aside the Gas to liquid-synfuel and Coal to liquid-synfuel).
Of course, it will be nearly impossible to digest the production cost (per barrel) of Oil-Shales (it may even reach 100$ per barrel as the extreme case), despite having a potential production of about 20,000 billion barrels.
So, we are neither "Running Out of Oil" NOR "Running Out of Ideas".
However, we are "Running Out of Our Comfort Zone", I suppose.
How to Minimize Oil and Gas Production Cost
Cost of production means (1) removal, (2) accumulation, (3) treatment, (4) field processing, and (5) oil and gas field storage (including, in addition to storage tanks, (6) maritime terminals and pipelines Gallun, Stevenson and Nichols (2001, p. 303) describe production costs as follows: Oil and gas production costs, (a) costs incurred to operate and maintain wells, as well as related facilities and equipment, including depreciation and (b) operating costs of supporting equipment maintenance and other operating and maintenance costs of these wells, as well as related facilities and equipment. and gas produced.
Minimizing production costs involves REDUCING:
(a) labor costs to operate wells and related facilities and equipment;
(b) repairs and maintenance;
c) Materials consumed and supplies used in the operation of wells and related facilities and equipment;
(d) taxes and insurance applicable to proven properties, as well as wells and associated facilities and equipment;
e) Amortization / depletion of reserves;
f) Extraction taxes.
According to Gallun, Stevenson and Nichols (2001, p. 160), production costs are divided into direct and indirect. Direct costs are those that can be related to oil and gas production in specific mineral properties, such as at concession, lease, field or well level. Gallun, Stevenson and Nichols (2001, p. 161) add that indirect costs are those that are not related to the production of oil and gas in a specific mineral property and are not controllable at the same level as direct costs. These costs are accrued and then allocated to the well, lease, concession, etc. The same authors cite examples of direct and indirect production costs. Examples of direct costs include salaries and employee benefits, service contracts, maintenance and well workover, surface equipment repairs and maintenance, and production taxes. Examples of indirect costs include depreciation of support facilities, expenses with oil and gas collection systems, transportation of equipment, electricity and so on. In short, you have to review all the expenses incurred
Conference Paper COST MANAGEMENT IN OIL EXPLORATION AND PRODUCTION ACTIVITY
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