Back to Volume 4 | Summer 2019

“Factory” Models in Oil and Gas Field Development

Executive Summary

During the past few years, oil and gas executives have begun to profess they use a “factory” or “manufacturing” approach to field development. Terminology such as “factory” or “manufacturing” is intended to connote a sense of improved operational efficiency, compared with what was achieved with previous approaches to field development.

What is meant by a “factory” or “manufacturing” approach? How does it relate to the true definition of the terms? Do these approaches actually achieve the promised gains in practice?

This paper explores what defines factory manufacturing, what makes factory manufacturing efficient and how that efficiency can be successfully applied to oil and gas field development. We show that it is misleading to draw a direct analogy between operations in field development and the production processes in a traditional manufacturing or factory environment, such as on a car assembly line.    Operations Science, the science of processes for different forms of production, is the scientific framework underpinning traditional manufacturing in factories, and better approaches to field development. We use the Operations Science framework to compare and contrast the differences in “manufacturing production” that occur in field development with more traditional forms of manufacturing. We conclude with an analysis of public data showing the most effective means to improve operational efficiency in field development.

Mark Spearman, Technical Director, Project Production Institute,
David McKay
Ram Shenoy, Technical Director, Project Production Institute,

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