As gas prices at the pump fall, people get excited. With more savings at the pump, people have more money in their pockets and more money to spend. In this industry, however, lower prices mean lost jobs. They mean an exodus from once heavily populated oil towns. Hotels are left empty. Restaurants now have more than enough tables available, and grocery stores have plenty on the shelves. In the oil field, low gas prices mean budget cuts, contracts extended and waiting on the swing, fewer jobs, and service yards filled with stacked rigs. Expert after expert consults charts and graphs to analyze data. No one knows when or how the upswing will occur, but those who have worked in the industry for years know that it will. The uncertainty is always there. Those who have learned how to endure will once again find success. Legendary college football coach Paul “Bear” Bryant once told his football team that he would have no show boating when they scored a touchdown. He said, “When you get to the end zone, act like you’ve been there before.” Those were wise words, not just for the football field but also for the oil field. When the work is plentiful, operators and service providers must consider what may come in the industry and plan ahead. Planning ahead is what companies who have been in the industry do. Currently, no one is beating down doors to purchase new rigs, regardless of promising contracts lying on their desks. Companies are stacking rigs, wondering how to stretch the money left after their budgets have been cut if not frozen for the year ahead. For example, in February 2015, 327 rigs were removed from the active list. Workovers and completions are continuing, but providers of these services have been forced to lower their rates to maintain contracts and keep active rigs busy during this downtime. When rigs become inactive, how can service providers plan ahead for busier times?
The Time for Proper Maintenance
As rigs come in, one by one, they are being parked like cars in a lot (see Image 2). Now is the time for an effective plan to repair rigs after work in the field and to maintain them as they remain out of service. Most rigs have been out in the field for a few years without returning to the yard, working continuously to keep up with the demanding needs. Now, with so many inactive rigs, a common practice is to take a part from one rig to fix another.
The best practice is to prepare, repair and perform maintenance while the opportunity presents itself during this inactivity so that, when they are called back into service, they are ready. Cutting corners on maintenance at this time will end up costing more in the end. Maintenance should be implemented for functional and operational requirements and, more important, for personnel and equipment safety. The maintenance process should begin with an overall evaluation of the obvious and physical condition of the rig. Check the wireline because this is the perfect opportunity to take care of that. Start off with a priority list and then work down to general maintenance. To ensure that all the maintenance and repair is conducted, ask this simple question, “If the rig were needed tomorrow, would it be ready? If not, why?” Operators and service providers should not use their whole budgets for this maintenance and repair. Most items should be at hand or easy to order. Some maintenance service may also be completed at a later date. However, developing a list of action items and getting “red tape” out of the way now will simplify processes later.
Some items that can easily be taken care of at this point to avoid rig downtime in the field are:
- Making a list of parts and part numbers
- Checking with the manufacturer to determine the availability of the parts
- General rig maintenance (for example, oil changes, greasing and bearing checks)
The cliché is that “the oil field has its ups and downs.” Unfortunately, these ups and downs affect many people, directly and indirectly. Personnel who work for operating companies and service providers who have been here before sit down, evaluate and prepare for the green light, when operations return to more normal levels. Manufacturers and part suppliers buckle down and do their own maintenance and regrouping. Once again, hopefully sooner rather than later, rigs will be rolling out of the yard, one by one, and crews will quickly follow, bringing business back to the boom towns’ hotels and restaurants.