overview
Technology, Innovation Key to Oil & Gas Production Cost Reduction
Drones are one of the innovative technologies that can be used to make the oil and gas industry more effective and effi cient.
A
s persistent low oil prices take their toll on both industry profi ts and spending projections, oil & gas operators are turning, in part, to technology and
innovation to reduce costs and increase capital effi ciency in the short term, while aiming to meet increased future energy demand in a low-carbon environment, according to new analysis from IHS, a consultancy that provides information and analysis to support the decision-making process of busi- nesses and governments.
“Rapid changes in price, such as the halving of the oil benchmark between 2014 and 2015, naturally bring into focus the need for oil companies and their suppliers to reduce costs to maintain viable returns. Technology helps on two fronts,” said Paul Markwell, vice president of upstream oil & gas consulting and research at IHS Energy. “The fi rst is in raising short-term production, the key denominator in the cost-per-barrel equation. The other involves attacking capital costs and operating expenses head on. Both place an emphasis on effi ciency.”
Still, investment in oil & gas technology should be viewed as a long game. Producers, Markwell said, must commit to unwavering innovation through the oil & gas price cycles if they are to meet demand safely and at competitive costs through
to 2050 and beyond. Markwell, along with Judson Jacobs, director of upstream oil & gas research at IHS Energy, was a contributor to the recently published BP Technology Outlook, which features their external perspective entitled, “Prioritizing Technologies through the Oil and Gas Price Cycles.”
The phenomenal growth of shale gas and tight oil can be attributed largely to manufacturing-style continuous improvement.
To meet demand and remain competitive, the IHS authors said in the BP report, operators are pursuing a range of cost-cutting and effi ciency initiatives, including automation and mechanization of high-cost, repetitive oil & gas activities, such as drilling. They’re also looking to apply data-driven an- alytics to draw key insights from high-volume data streams, such as detecting when a piece of equipment is going to fail or identifying ‘sweet spots’ in unconventional oil & gas plays. In still other instances, operators are increasing their use of mobility technologies to improve the effi ciency and effective- ness of their fi eld workforces.
13 — Energy Manufacturing 2016
Photo courtesy Insitu
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