Petrobras has saved around US$1 billion in cost reductions, design optimisation and productivity gains since it launched its Well Cost Reduction Program in 2013. These savings are expected to increase further as growing numbers of production development wells are constructed in pre-salt areas.
The program’s results have been impressive: the savings made in 2013 were US$344 million, rising to US$1 billion by the end of 2014. This cost reduction is significant, given that well construction accounts for the large single share of Petrobras’ investment – it currently represents 32% of the company’s overall investment and 46% of the Exploration and Production area’s spending.
The Well Cost Reduction Program is composed of 23 different initiatives: four designed to reduce unit costs, six to optimise designs, and 13 to improve productivity. Unit cost reduction initiatives include the use of simpler, lower cost vessels to replace drilling rigs in some activities, such as the installation of cabling equipment. Design optimisation initiatives include the simplification of designs for multiple sets of wells and operations.
Finally, one of the initiatives contributing to higher productivity has involved increasing the efficiency and availability of the fleet of floating rigs (equipment used to construct and maintain wells). In 2014, the company improved its performance by 2% in this area, generating a saving of US$115 million during the year. Thanks to this initiative, the floating rigs’ operational efficiency increased to an average rate of 92% in 2014.
Adapted from press release by Joe Green