Reducing Unaccounted Oil and Gas Production Uncertainty

Emerson's Michael Machuca


Author: Michael Machuca

Management of well pad inventory, allocation and custody transfers encompasses multiple operations that contribute to overall production management uncertainty. The accumulated measurement errors and variability in operations within a storage system can quickly add up to a significant level of uncertainty. Higher levels of uncertainty reduce the prospect for timely insight into problematic field operations that quickly translate into added lease operation costs and/or lost revenue.

Much of the uncertainty reported by many oil and gas operators is the result of inaccuracies of manual tank gauging and reliance on manual haul ticketing practices which introduces errors, adds to operating costs and delays production accounting. One operator recently reported that their shale field with over 3,000 hauls per month had an estimated annual losses and exposure of over $19,000,000. A second operator stated that their total unaccounted production uncertainty was ±15%.

Well head after all the Fracking equipment has been taken off locationIn order to reduce these high levels of uncertainty, many oil and gas operators are deploying tank management software and remote operation control technology to automate operations to manage and minimize production uncertainty. It allows the automated integration of truck hauling operations and reporting, well production measurements, level-based gross volume inventory and custody transfer measurements. Integrating the various monitoring, control and operation components as system with turnkey tank management software reduced uncertainty to ±1% after 60 days. The primary contributors to this improvement were:

  • Increased accuracy in level-based gross volume inventory including shrinkage
  • Timely pay / check haul verifications using flow and level measurement
  • Reduced cost of transportation and salt water disposal

The Tank Manager software application allows producers to record liquid production and hauling using accurate level and/or flow measurements. Producers can receive confirmation of each haul ticket by introducing an audit trail that records all pertinent data. Now, all liquid is accurately accounted for with precise measurement and tracking to enhance their bottom line. The Tank Manager applications operates on the ROC800-Series remote operations controllers to record data from each haul. Security is available to limit driver access and for tracking haul volumes.

When a haul is completed, Tank Manager creates an electronic haul ticket that includes driver, ID, haul volume, corrected haul volume, and hauled time and date. Throughout the entire process, all of the time-stamped data is recorded into the ROC. The production company’s SCADA system can easily retrieve this data, which allows the producer to collect completed haul data quite possibly before the trucker leaves the location.

Tank Manager:

  • Ensures precise measurement of delivered quantities
  • Reduces uncertainty
  • Enhances revenue
  • Puts control back into the producer’s hands
  • Reduces field personnel time associated with verifying post-haul inventories at site
  • Minimizes manual data entry of hauling activity by office personnel

The application of tank management software can reduce unaccounted for production losses (proven from 15% down to 1%) and reduce lease operating expenses—while enhancing safety and community relations by reducing unnecessary truck traffic.

From Jim: If you’ll be joining us at the October 24-28 Emerson Exchange conference in Austin, Texas, make sure to sign up for the Produced Fluids Management and Well Optimization educational short course. You can also connect and interact with other oil & gas production and supervisory control and data acquisition experts in the Oil & Gas and SCADA groups in the Emerson Exchange 365 community.

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