When sourcing oilfield equipment, the first decision you need to make is whether to purchase the items you need outright or to rent them for the duration of your project. There are benefits to both options. The following guide can help you make the right choice.
How long will you be using the equipment?
Depending on the equipment and the job, you may need a specific piece of gear for just a few months or many years. As a general rule, the longer you anticipate using a piece of equipment, the more sense it makes to purchase it outright. It's better to rent equipment that you only plan to use for a short time. If you are unsure if a specific piece of equipment will work for your oilfield, then renting it before you make a purchase option is a good middle-ground option so you don't make an investment that you regret later.
Do you have the cash flow to invest in ownership?
Although you can purchase equipment on time, you will likely get a better deal and save thousands in interest if you can purchase necessary equipment outright. It also makes it easier to sell and upgrade if your equipment isn't financed. If your oilfield doesn't yet have the cash flow to support the purchase of the necessary equipment, then rentals are the wiser choice for your bottom line.
Will ongoing maintenance pose any challenges?
Even the newest and most advanced pieces of oilfield equipment can break down, especially since most gear on an oilfield is subjected to heavy workloads and a harsh environment. If you own your own equipment, you will either need to bring in outside service mechanics or add some oilfield mechanics and techs to the payroll. Most rental agreements also come with a service agreement, which means repairs are included in the cost of the rental. Even better, you can usually work with a rental company for an immediate replacement of the equipment if it requires a time-consuming repair, which means you can get your oilmen back to work all the quicker.
Do you anticipate the need to upgrade?
If you move operation sites frequently or expect the job to evolve rapidly over the extraction period, thus necessitating newer or different equipment, then a rental is a better choice. If you own your equipment, you will have to arrange to move it to a new site, whereas the rental agency will typically move rental equipment. If upgrades are necessary, then you must go through the process of selling the old gear and purchasing new equipment. With rentals, you can simply call up the service and swap out your current equipment for the new gear that you need.
Contact an oilfield equipment rental company for more help.
Take a look around at the industrial equipment in your facility. Hopefully it is all working and in good shape. If you want to keep it that way, you will need to provide it with the proper care. Every machine has somewhat different maintenance requirements, but in most cases, some lubrication and an annual inspection by a qualified repair professional will go a long way. Here's the thing: you can't be in this industry without the right equipment. So rather than spending more on new equipment, it is wise to care for the stuff you've got. Read more on this and related topics right here on this website about industrial equipment.