Activity Based Costing Application To Cost Management Of SL Drilling Project

Since the second half of 2014,international oil prices have continued to decline,leading to a sharp decline in profits of oil companies,as well as expense on exploration and development.Meanwhile,private and foreign drilling companies are still pouring into the domestic drilling market,making fierce market competition.In addition to achieve sustainable development,several laws and regulations on environmental safety have been introduced and perfected in recent years.The requirements for environmental safety of oil and gas drilling project are more stringent,resulting in great changes in the cost structure of drilling project.Facing the new situation,the oil and gas drilling company how to improve the cost management level,reduce the cost of the project and enhance the competitiveness of the market become an important problem to be solved.SL drilling company has been providing drilling engineering technology service on BJ block for many years.But the cost of the project has always been high,and there have been losses in many projects,and employee benefits have been cut down.Company leaders and basic employees are eager to improve the current costing situation.How to find and solve the existing problems in the cost management of the company,reduce the cost of the project,help to achieve profit,and improve the ability of bidding naturally arouse my interest in research.In the study of the company,it is found that the cost calculation method can not reflect the cost drivers scientifically,and the cost control does not go deep into the first line of production and can not effectively reduce the cost of the project.Among them,the activity-based cost method commonly used by people is a mature management mode widely used at present.Compared with the current costing management system of SL drilling enterprises,it can enable enterprises to obtain more reasonable,appropriate and applicable calculation methods and more effective cost control approaches.Therefore,adopting activity-based costing to manage SL drilling enterprises is the best way to resolve the potential risks in their current cost management mode,realize the transformation and upgrading of investment management and enhance their management ability.In this paper,the cost management status and production process of SL Drilling Company were thoroughly investigated,and the existing problems in the current cost management and cost calculation methods are found.All the operation items involved in the drilling engineering are confirmed,the industry center is divided,and the cost drivers are analyzed.On this premise,the paper puts forward an evaluation plan that fully conforms to the actual operation cost of the enterprise,and verifies the rationality and feasibility of this plan through the concrete practice of drilling.In addition,the grey modeling method is used to predict the drilling operation investment in some years in the future,the calculation conclusion is taken as the principle standard for operation investment,and the key performance evaluation measures for enterprise management are put forward at the same time.Finally,the rationalization proposal of improving the management mode of drilling enterprises is obtained.Finally,the related suggestions for drilling operation improvement are put forward.The purpose of this study is to design and implement a set of activity-based costing for SL drilling company,and to provide a scientific basis for the drilling company to carry out single well cost accounting,to reasonably determine the price of bidding and to evaluate the performance of the cost responsibility center,so as to improve the cost management level and market competition ability of the company.