Silhouette three oil pumps

Development and Production of Oil from an Oil Well


After operators decide that they are going to develop an oil field, a development and production plan is made. The field should be capable of producing oil for several years and it should be feasible to do so, even when oil prices are low. So the company will look for solutions to reduce costs. Floating production rigs, reusing installations are some techniques that can reduce costs, leading to better profitability.

Procuring a development license

Note that the development and production plan has to be approved by the oil authorities of the concerned country. Once it is approved, the company is given a development license. Once the company decides to develop an oil field, the field may be tagged as a reserve.

Acquiring services of specialists, materials for drilling and building infrastructure

To develop the oil rig, services and materials have to be procured and infrastructure must be installed. The engineers will also build a system to transport the oil. The company may do this work themselves or they may outsource it to outside contractors.

Production wells can be dug either horizontally or vertically. It means a production area can have nearly 40 wells in an area of sq. 10 km. Once drilling is over, the engineers test run the facility and fine tune it, so that they can achieve stability during production. While an onshore oil rig can be developed in as little as one year, an offshore facility can take as much as 3-7 years to develop.

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