OCTG Standardization and Surplus Reutilization Bring Cost Reduction Efforts to Fruition

Abstract

Abstract The ongoing low oil price environment underscores the need to be constantly prudent. Long term sustainable changes implementation are necessary in all areas to preserve profitability including that of effective drilling materials and surplus management with OCTG (Oil Country Tubular Goods) being the prime issue from both quantity and price perspectives. Drilling operators especially those with large scale and diversely complex well programs have to manage excessive surplus mess uncontrollably amassed when oil prices were high. Some opted to dispose while others chose surplus reutilization. Disposal seems to be an easier way out as it frees up yard space and reduces preservation cost but it incurs value leakages as it often fetches unreasonably low scrap prices. PETRONAS took on a bold strategy to overcome the issue by channeling efforts on producing a robust OCTG standardization program as well as enhancing reutilization through reverse engineering which involves meticulously designing wells casing programs based on available surplus. These initiatives aim to take materials management to a higher level of efficiency and avoid future excessive surplus accumulations. This paper will walk through the various hurdles and solutions in the course of delineating Fit-For-Purpose (FFP) configurations and minimum technical criteria for OCTG material and connections specifications to satisfy PETRONAS’ application requirements for all well types ranging from conventional to High Pressure High Temperature (HPHT) and Deepwater. It also describes various operational challenges from onshore machine shop support to offshore tubular running equipment and services which were critical pieces in putting together the standardization puzzle. It will further provide a lowdown on the misperception of having the lowermost specifications and lowest prices as the primary drivers in realizing the greatest value for money for OCTG applications especially for operators with wide ranging application needs.