Equipment Rental means an option when a Customer not only rents/leases equipment, but also gets a complete package of application engineering, operation, maintenance and repair services.
The main benefit of the rental/lease relationship between an Oil Company and Borets Service Company is a long-term cooperation on a mutually advantageous basis.
Furthermore, the Rental/Lease option allows the Oil Company to
- cut lifting costs due to lower maintenance/fewer workovers and reduced tubing costs;
- reduce manpower;
- enhance oil production due to lower downtime.
Economic Advantages for Oil Companies
- Flexible pricing policy (the prices are fixed in long-term contracts regardless of inflation);
- No need to draw funds out of the cash cycle to purchase new oil field equipment and, in consequence, it enables the Oil Company to implement new projects, such as drilling programs and new wells;
- No need to borrow funds under loan agreements to purchase new equipment and consequently to incur additional expenses related to loan servicing;
- No need to insure the oil field equipment and to pay property taxes, since the Oil Company doesn’t account for the equipment, and as a result it allows for reducing tax payments and risks related to storage and operation of non-repairable equipment (optimized environmental costs);
- Potential reduction of costs related to manpower, insurance, communication, transportation, work overalls, qualification tests, training, etc.
Furthermore, as soon as the equipment has been transferred to the account of a service center, Borets Service Company undertakes to purchase, ship, select, store, safeguard and make an inventory of this equipment enabling the Oil Company to lower costs incurred in the above-said cost items.
Borets Service Company has been leasing downhole equipment since 2006. Today over 1,000 wells operate with the equipment provided under leasing agreements. Leasing well stock tends upwards and increases by 15–20% annually.
Leasing offers advantages not only to small and medium oil operators, but also to major Oil Companies, particularly, operating in complicated environments that require high maintenance.