Managing Oil and Gas Produced Fluids from Allocation to Sale

by | Nov 9, 2016 | Industry, Oil & Gas | 0 comments

For onshore oil & gas producers, how accurate are your measurements from allocations at the wellhead to custody transfer?

Emerson's Michael Machuca

In a recorded webinar, Produced Fluids Management – Getting Paid for What you Produce, Emerson’s Michael Machuca describes the financial gains from improved measurement and control from the wellhead to the point of sale. And, how you can ensure production measurement compliance, reduce unaccounted for losses, control emissions and optimize custody transfer logistics.

Produced Fluids Management – Getting Paid for What you ProduceMichael opens showing some produced fluids storage tanks in the Texas Permian basin that are largely manual operations for custody transfer and hauling. Security for this process could be improved and the picture shows a communications tower in the background that could be used to move the custody transfer information to the producer in another location off of the lease.

He defines produced fluids management as measuring, tracking and accounting for all the oil, gas and water produced at each well—all the way from the wellhead through the sales point in order to minimize any kind of losses. This includes gas measurement and vapors off of tanks.

Some of the key points of measurement on a typical well pad includes the wells and test separators for allocation and royalty payments, central processing where separation and heater treater processing is performance, tank management and vapor recovery and transfers for water hauls, oil hauls and manual tank measurements, and lease automatic custody transfers (LACT).

Michael notes discrepancies in missing or manual measurements have been known to cause up 30% differentials from allocation to sales measurement, up to 20% overpayment for salt water disposal costs, and up to 15% lost and unaccounted for production.

By looking at each of these areas as one system instead of separate functions, these discrepancies and can be significantly reduced through better measurements and automation.

Michael takes a closer look at each of the areas. I’ll highlight one of the areas and invite you to watch the webinar for the other areas. He provides a facility profile with 120 wells, 150 barrels/day average well production, oil with API 40 gravity, a $45/bbl sales price and a $2.10 per MMCF natural gas price. He used these prices to help quantify the risk of losses through the facility.

A separator is where most oil & gas production facilities get their allocation measurements. These separators give insights into the producing reservoirs and how each of the wells are producing in their oil, gas, basic sediment & water cuts. These measurements can be challenging given non-steady well flow rates, the process itself of separating volatile fluid into their individual components—all while measuring accurately under dynamic conditions.

Not measuring and controlling this separation process can cause a number of problems. One result is gas carryunder where the gas remains entrained as gas bubbles in the liquid when there is poor flow and level control. Water carryover into the gas stream is another issue.

Smart Vapor Recovery Management SystemFor the liquid streams oil in the water or water in the oil can occur. All of these conditions cause inaccuracies in the allocation measurements. In addition, gas carryunder can lead to a loss of sales revenue when it goes to storage tanks or flares. Michael cited one operator losing 3.4% of their sales gas through the flare system.

Smart vapor recovery management systems help eliminate these losses and provide a payback in under 2 years.

Watch the webinar for other opportunities across the production process and ways to improve production measurement compliance, reduce unaccounted for losses, control emissions and optimize custody transfer logistics.

You can also connect and interact with other oil and gas production experts in the Oil & Gas group in the Emerson Exchange 365 community.

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The opinions expressed here are the personal opinions of the authors. Content published here is not read or approved by Emerson before it is posted and does not necessarily represent the views and opinions of Emerson.

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