Fracturing alliance allows massive diatomite oil reserves to be economically produced at Lost Hills, California: A case study
As North American oilfield operations mature, there is a perceptible loosening of the autocratic ties between oil companies and contractors. They are being replaced by alliances or partnerships designed to minimize cost while improving profitability of the companies involved. Many papers have been written concerning alliance theory, but little documentation exists detailing actual performance. This paper evaluates a mature alliance, its implementation, structure and results. In Lost Hills, California, the diatomite formation requires hydraulic fracturing to allow oil recovery at profitable production rates. Because hydraulic fracturing is approximately two-thirds of the total well cost, it is imperative that fracturing investments be optimized to allow field development to proceed at optimum levels. Therefore, in 1990, a fracturing alliance (the first of its kind) was initiated between Chevron and Schlumberger Dowell. Over 1 billion lbm of sand has been successfully placed during approximately 2,000 fracture stimulation jobs. Through this prototype fracturing alliance, many major accomplishments are being achieved. The most notable are the hydraulic fracturing costs that have been reduced by 40% while improving the profitability of both companies. This paper illustrates the benefits of an alliance and justifies the change in management style from a low-bid operating strategy to a win-win customer/supplier attitude.
- OSTI ID:
- 403073
- Report Number(s):
- CONF-9603154--
- Country of Publication:
- United States
- Language:
- English
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