Enhancing Economic Resilience in Marginal Oilfields Through Discrete Event Simulation Optimization of Coiled Tubing Reutilization
Abstract
Coiled Tubing Gas Lift (CTGL) is an artificial lift method contributing the majority of oil production in marginal fields. These fields face a double challenge: reserves continue decreasing while operational costs tend to increase. This research aims to develop optimization models for reutilizing coiled tubing, shifting from current practices where CTGL installations always use new coiled tubing materials. A Discrete Event Simulation (DES) mirrors current operational practices based on empirical historical data (2019-2024) from the mature marginal oilfield Kutai Basin, with a target reservoir interval of 700 to 8000 ft in East Kalimantan, Indonesia. A baseline model (Scenario 0) and four optimization models (Scenarios 1- 4) of DES were developed to evaluate the most optimal strategies incorporating recycling and distinctive cutting policies. Scenario 1 (Dynamic Recycle) emerged as the best-performing model, delivering the highest Net Present Value (NPV) of $58.53 million with 100% demand fulfillment; Scenario 4 (Hybrid Cut) performed equivalently but generated slightly more scrap, while the fixed-cut policies (Scenarios 2–3) were operationally unviable. Compared to the current practice (Scenario 0), which incurs an average Coiled Tubing (CT) cost of $69,000 per well, Scenario 1 improves NPV by 7.62% (~$4.1 million), creating significant value for marginal fields to maintain profitability and continuity. It also drastically reduces CT consumption by 53% and metal scrap by 60% while fulfilling 100% of job demand. The DES approach successfully validated that recycling CT is highly viable without compromising operational continuity. Earlier studies on coiled tubing are related to technical and operational failure factors and quality of service, while this research addresses problems such as the permanent application of CTGL in long-term project economies. Using DES, decision-makers can quantify the economic trade-offs of strategies without risk before implementation in the oil and gas industry.