By: RK Energy
Excessive costs associated with maintaining oil and gas sites are risky, the smart solution is to rent equipment instead of purchase it.
Due to limited resources, profits can drop drastically because of the substantial up-front cost that comes with buying new equipment. Rental equipment is a great alternative that can also greatly reduce industry barriers allowing for multiple projects to occur simultaneously. In addition, many oil field and construction equipment suppliers rent out specialized equipment for individual needs and often streamline the process by delivering and installing it on site as well.
There are several hidden costs to owning oil and gas equipment.
Besides the decrease in value that comes with years of use, owners are also responsible for equipment repair, maintenance, transportation and more. Renting reduces these concerns and often allows renters the option to buy the equipment down the line. Ongoing maintenance costs are typically included with a rental which avoids unexpected expenses if a piece of equipment suddenly needs service.
During a downturn, companies focus on increasing production to remain competitive and profitable.
With an increase in production comes more exploration, projects and equipment to do the job. Renting equipment allows a business to have multiple on-going projects without tying up too much cash in equipment.
Companies should look beyond rental rates when deciding on a piece of equipment or rental company.
It’s important to understand the rental company’s ability to service and obtain parts quickly which can affect long-term savings and peace of mind. Customers should consider operating costs, emissions generation, increased performance and maintenance requirements as well.
Government regulations can also increase costs when purchasing equipment. Renting equipment ensures that operations are in compliance with regulations rather than having to invest in new equipment when a regulation changes.
Renting can help operators test out the latest technologies and models, gain equipment knowledge, obtain access to specialized or temporary-use equipment, analyze equipment before buying and avoid high start-up costs and maintenance.