Research On The Cost Management Of Extra High Water Cut Oil Fields

The competition between oil products ultimately come to cost competition for they arenon-differentiated products. Oil costs has been higher compared with its cost abroad. Afterdecades of mining development, most of the major oil fields in china have entered the latestage of high water cut, part of them has entered the extra high water cut stage. Large amountsof capital was invested to guarantee stable yield which leads to the contradiction of"production-cost-efficiency" more and more prominent. To break through the bottlenecks forthe development, we need to start with the characteristics of extra high water cut oil fields toidentify trends and new demands on technology and management, to form a managementmodel appropriate to their characteristics.This paper, first, based on oil and gas producing flow, this paper analyzes oil enterprises’cost composition and cost drivers. Summarize the characteristics of extra high water cut oilfield according its product practice, analyzes the effects of these characteristics on the costand costing management then raised solutions of cost management issues on this basis. Next,on the basis of understanding former cost management theories and guided by the theory ofReservoir management, this paper put forward a series of solutions including independentmanagement unit, differential cost management system, winner in advance of budgetmanagement system, production and cost early warning mechanism and decision-makingmechanism based on the cost-benefit analysis. This sections are not independent, the first twoparts are adjustments to the organizational structure, they are also the basis of operatingmanagement. The rest three parts illustrate how to make efficient management of old oil fieldfrom the point of winning in advance through budgeting, process control and scientificdecision.