Permian operators are choosing gas lift over ESPs
Operators have several options with three main types of artificial lift being
(1) electric submersible pumps (ESPs), (2) sucker-rod pumps, and (3) gas lift.
The oil and gas industry has long been comfortable with ESPs, which work
efficiently in horizontal wells and often provide the best assist to well
production. ESPs, however, are expensive, costing anywhere from $150,000 to
$200,00 per pump, need higher levels of maintenance, and struggle with
reliability in harsh formation conditions. Given these challenges, operators are
increasingly questioning the value of ESPs although 30% to 50% of new wells –
depending on the play – utilize them.
Sucker-rod or beam pumps are another popular choice especially for wells that
are in the later stages of their lifecycles. Over 80% of old Permian wells have
been outfitted with rod pumps. Since most of the well fleet is relatively
new, operators are paying little attention to the choice of rod pumps although
the intensified focus on costs will drive rod pump adoption
Operators are adopting gas lift. Given growing concern around ESPs and their
limitations, the proliferation of harsh conditions in several plays such as
water and solid particles flowing aggressively through the tubing thereby
damaging ESPs, and attractive low costs, gas lift adoption is growing rapidly.
A typical gas lift operation can cost from $100,000 to $400,00, can handle harsh
conditions more efficiently, and can be used to support multiple wells enabling
efficiencies of scale in increasingly-concentrated shale plays. These benefits
are collectively overcoming the limitation of gas lifts yielding lower
production relative to ESPs.
Operator adoption of gas lift has increased dramatically. For example, in
plays such as the Permian, anywhere from 40% to 60% of new wells are being
outfitted with gas lift equipment.
https://adi-analytics.com/2017/11/16/shale-2-0-a-shift-to-gas-lift/