Easy Oil is Gone - Stay Ahead of the Problems and Competition

The lifespan phases of a typical hydrocarbon field can be separated into 3 phases - the early production phase, followed by the plateau phase, and ending with the late-life / tall-end production.

All 3 production phases have different challenges, but they have a common characteristic: the fluid composition and the physical properties of the produced hydrocarbons always change with the production, and typically the technical and economic challenges increase after the plateau phase is finished.

So, what do you do when the easy oil is gone? In this blog article, we discuss what has been the common practice to handle the production changes, the consequences of continuing with this practice, and what to do to remain competitive and stay ahead of the problems.

As this article is one of the more extensive ones we have published here at the Process System Performance blog, we have for your convenience, highlighted its content here:

1. Start with the most profitable then shut down and move on

2. Why this is not sustainable

3. Stay ahead with instrumentation

4. Consequences

5. Conclusion


Download guide technologies for water in oil analysis

Start with the most profitable then shut down and move on

Traditionally, the oil companies invested in explorations. Statistically, many of these exploration campaigns showed no commercial findings, except for a few relevant discoveries. Once a portfolio of discoveries was established, the oil company started the first field development, prioritizing the most economical project, meaning the most profitable field in terms of total produced volume and profitability of the single barrel. 

This way of expanding the business has been common in all oil basins and regions of the world, with oil companies putting the largest fields in production first, located onshore and in proximity to existing infrastructures.

With the availability of new technologies, more and more reservoirs become profitable, pushing the development boundaries and allowing developments of hydrocarbons fields located in a great variety of places - remote areas, in desert and arctic environments, from the calmest to the harshest ocean, first in shallow waters, then deep and ultra-deep waters. It also allows the safe production of more and more complex reservoirs, containing more water, more contaminants (e.g. CO2 and H2S), or having challenging physical properties (like high temperature and / or high pressure).

With a growing market, a portfolio of untapped resources and a range of always new available technologies, the oil companies had a variety of options to grow the business and keep it competitive.

One of the common practices adopted was (and in many cases still is) to entirely avoid the production challenges of the late life, shutting-down the wells that enter in that phase (for instance once they start producing too much water), drill new ones and tie-in them to the central production / processing facility. This technique is for sure capital intensive (it requires to drill a lot of new wells), but at the same time it has proven to be able to quickly accelerate production, extend the plateau of each field, and overall increase the production of each individual oil company or country.

We can say that in a growing market it was the most logical approach to adopt, even if it had a larger carbon footprint (drilling a lot of new unnecessary wells) and left a relevant portion of the recoverable resources of each reservoir in the ground. 

Suggested reading: Real Time Well Monitoring: Why is it so Important? 


Why this is not sustainable

Going forward, this approach is not going to be sustainable and is fated to be abandoned. The main reasons are the following.

First, look at the market growth. The market growth is already slowing down, and the forecast shows no growth in the medium term and probable decline in the long run. The natural consequence of this scenario is that the oil companies are investing less and less in exploration. Less exploration activities is equal to less findings. Consequently, there will be less and less new fields to drill, tie-in and put in production.

Second, the easy oil is gone. There are a lot of untapped reservoirs, but developing them will be more challenging than extending the life of existing ones. 

Third, the energy transition. Oil companies are working hard to reduce emissions of their operations, meaning that for each new development they have to prioritize the concept with less carbon footprint. They also have to reduce the number of new wells, while maximizing the production from existing infrastructures.

Last, the cost of production. To remain competitive, they are already reducing their CAPEX investments. With a market that is not growing, they have to sacrifice the speed and acceleration of production, while focusing on the profitability of each individual barrel of produced oil.

Utilizing the existent infrastructures and applying the right technologies, the operators can maximize the production and the assets utilization, achieving higher profitability and lower carbon footprints and emissions.


Stay ahead with instrumentation

Oil companies are competing not only to nature, physics and other companies that produce the same type of hydrocarbon products. They are now competing with new companies focusing on producing a greener form of energy, and that are growing in scale and becoming more competitive in price. Consequently, the traditional oil companies are forced to optimize their processes and production techniques by implementing new technologies.

Ignoring to intervene and letting things happen, will result in competitors being ahead in terms of profitability, production, efficiency and reduced carbon footprint.

It might look like a given principle, but companies who doesn’t invest in new technology see their production stagnating and going down year after year. Most oil fields naturally loose productivity with approximately 6-7% a year. To remedy this reduction, techniques to stimulate the field (water injection, chemical injections, polymer injections, steam injections etc.) are implemented. This in turn affects the fluid stream from the well.

Choosing instrumentation that allows for monitoring the fluid closely will help avoid surprises and keep performance at its maximum.

Today, there are a lot of software able to predict and anticipate the behaviour of the production. However, they need data as an input. If the data is wrong, the prediction will be incorrect. Using instrumentation will give you correct and up to date information. You can have the most powerful software out there, but if you feed it the wrong data, you will not get the right results.

Suggested reading: 4 Criteria You Must Consider Before Selecting a Water Cut Meter



By ignoring the technological evolution, you risk potential problems that can heavily affect three crucial aspects:

Finance: The company loses profitability. Or even more critical; inaccurate data can cause costly accidents. Investing in instrumentation can save the company for great economic losses.

Safety: Without instrumentation able to monitor and anticipate the production, you compromise the safety of your employees working on site and the integrity of your assets.

Environment: Accidents leading to great oil spills can be avoided by monitoring the production continuously and anticipating what could go wrong. In addition, without the use of technology will not be possible to effectively reduce emission and reduce the operation carbon footprint.



Investing in instrumentation that monitor the fluid closely is a given to ensure competitiveness when the easy oil is gone. It helps to keep the existing infrastructures producing, avoiding shutdowns, accidents, and unnecessary cost.

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