By OGJ editors
HOUSTON, Nov. 3 -- Operating costs are increasing for producing fields on the Gulf of Mexico Outer Continental Shelf while shallow-water shelf production volumes continue to decline, said Ziff Energy Group.
This trend adds urgency to shelf operators' efforts to monitor and manage operating costs, Ziff said in its Shelf Reducing Operating Costs study on operating costs for calendar year 2002.
The study features analysis both on a field and company level. Overall on a volumetric-weighted basis comparing 2002 with 1999, natural gas fields showed unit operating cost increases to 29¢/Mcf from 25¢/Mcf, or 20%. Oil fields showed increases of 40%, jumping to $2.30/boe from $1.65/boe.
Study participants included the majors as well as independents. Participating operators provided operating expenses and technical data on more than 220 operated fields encompassing 1 million boe. The fields' annual operating costs were more than $750 million.
The report covered asset types throughout the Gulf of Mexico, ranging from very shallow to deeper shelf assets. Assets also ranged from relatively young in their producing cycle to very mature.
Costs were broken out into 10 standard categories. Between 1999 and 2002, the most significant increases occurred in surface repairs and maintenance, 53%, and total labor and field supervision, 34%.
Shelf operators said they are responding to cost drivers by:
--Selling marginal properties that no longer meet their portfolio requirements.
--Outsourcing noncore parts of the business.
--Utilizing field contract operators.
--Closely managing and scheduling transportation logistics.