Research On Cost Control Of A Downhole Operation Company

The successive drop of oil price is making a big difference to the oil industry, which reduces the management benefit and even probably leads to a deficit state. Under the current development situation, the key measures to keep the oilfield enterprise alive is that to lower the cost and strengthen the cost control.Firstly, relevant literatures about cost, cost control, budget management and target cost management are collected to master the research state of cost control. Based on the theories of cost control, the paper takes the downhole company as the main study object and analyzes the cost which holds a high proportion in earnings. Meanwhile, further study on the cost control of this company is performed combing with the present situation of cost-control method in downhole companies. In addition, the cost-control measures, especially the measures centered on target cost management and developed against all the staff are taken into account. Finally, the paper evaluates the extra efficiency of cost reduction by quantificational management of working achievement.Through the study of downhole services company, problems existing in cost control are summarized as follows:The irregular management is ubiquity in bidding procedure and contract management.Meanwhile,there is much omission in materials management and the budget management is not fully at work. Finally, the cost data can not be shared in time. In the operation aspect, the staff lack the sense of cost control and the cost control method is relatively outdated. The prior prevention and in-process control are not taken seriously.To solve problems as mentioned above, the paper put forwards some targeted measures. On one hand, in the aspect of management, the paper suggests that organizational structure and staff composition should be flattened. In addition, the bidding process and contract management must be normalized. Simultaneously, the materials purchasing and management methods need to be changed in the right way. At last, the budget management and reasonable evaluation system is advocated. The system of cost control which emphasizes the importance of single well should also be built. On the other hand, in the aspect of operation, the paper suggests that cost control awareness of all the staff must be strengthened and new methods should be applied to the whole process of control. In the end, the paper offers some detailed proposals about the labor cost, materials cost, direct cost as site and other key controllable costs for this specific downhole services company.