Costing of Geothermal Wells

Abstract

Well cost forms a major cost component of the total cost of developing any geothermal development project. Due to this fact, it becomes a key consideration in the determination of the economic viability of a geothermal field. Well costs are generally categorized into two components; Tangible and intangible drilling costs. Tangible drilling costs are mainly cost of equipment that become a permanent part of the well and include Well Casings, Wellhead Equipment and Casing Setting Equipment, while intangible costs refer to money spent primarily for services. In addition, one formula of cost monitoring, during drilling, has been suggested. This formula can be a useful tool in ensuring that acceptable variation in the actual drilling costs and planned drilling costs. It can be deduced that well costing is of vital importance since it can help quantify the substantial cost associated with development of any geothermal project thus enabling adequate budgeting/financing. It can also help investigate the costs of drilling and completion of wells and relate those costs to the economic viability of the geothermal project. In addition, since well costs usually contribute a big percentage of the total project cost, determination of the selling price of energy produced will be easy if the well cost is accurate. From well costing records, it is possible to carry out analysis using drilling-costs-with-depth for various regions and couple them with energy-recovery-with-depth as they relate to various regions. Obviously, areas with relatively low drilling costs will have greater return on investment.