The total annual cost of corrosion in the oil and gas production industry is estimated to be $1.372 billion, according to a NACE study. That figure can be broken down into $589 million on surface pipeline and facility costs; $463 million annually in downhole tubing expenses; and another $320 million in capital expenditures related to corrosion.
These costs and environmental risks could rise further in the years ahead, as new hydrocarbon sources are found in more challenging environments—deeper reservoirs with higher temperatures and pressures and containing greater concentrations of acid gases.
It is widely recognized within the oil and gas industry that effective management of corrosion will contribute towards achieving the following benefits:
- Statutory or Corporate compliance with Safety, Health and Environmental policies
- Reduction in leaks
- Increased plant availability
- Reduction in unplanned maintenance
- Reduction in deferment costs
Assets in the upstream oil and gas environment needing protection from corrosion may include wells, risers, drilling rigs, offshore platforms, pipeline connectors, and more.