HEAVY IRON NEWS
Technology Can Turn Oil Around
- By Design Team
- •
- 12 Jan, 2016
Though oil and gas companies are still maintaining their production, the market as a whole remains in disarray. Per barrel crude oil prices have plummeted to an 11 year low, well below $40 a barrel. Changes within both domestic and international oil markets have increased the supply for oil while demand has remained relatively static, and the only way this can be countered is through the use of technology.
THE CURRENT STATE OF DOMESTIC OIL
The domestic oil market is strong but struggling. Following the shale oil boom, the market was flooded with an excess of oil. Rather than pulling back on their supply, oil producing countries flooded the market with cheap oil. Today, oil is trading at an extremely low per barrel price, which has pressured many domestic oil and gas companies to slow down their operations. Rather than shutting down, many oil and gas companies have instead focused on improving and optimizing their operations.
REGAINING CONTROL OVER THE DOMESTIC OIL MARKET
It's impossible for domestic oil and gas companies to regain control over market prices. Instead, oil and gas companies must focus on utilizing technology to the fullest extent, thereby capturing more revenue despite the low per barrel prices. Oil and gas companies will need to optimize their logistics and supply chain management through the use of big data, and apply big data analysis to maintenance and safety issues for better predictability. Oil and gas companies will also need thorough analysis of real-time market data and predictive analysis of the future status of the market, so that they can better plan ahead. A significant component of near industry collapse occurred due to overly optimistic forecasts.
Technology can be further used to monitor and maintain oil sites, reducing administrative overhead, and to perform calibration and other necessary tests. Better detection technology could lead to better well sites, and better oil recovery procedures could increase the ability to recover oil from previously depleted sites. Altogether, technology can be used to improve upon every level of the oil and gas extraction process.
POTENTIAL ROADBLOCKS AHEAD FOR OIL AND GAS
Even with technology, there are some potential issues that could cause significant setbacks for the oil and gas industry. In particular, increasing regulations, safety requirements, and environmental protection protocols are making it more costly for domestic oil companies to operate. If oil companies are to compete with foreign nations, they will need to be able to control and secure their own operations. Technology will also aid in improving upon safety and avoiding issues such as spills and environmental damage.
An emphasis on technology is undoubtedly the best chance for the oil and gas industry to recover. Moreover, an emphasis on technology could greatly benefit the oil and gas industry once prices have rebounded once again; the profit margins will be far greater, as the entire system will have been streamlined and optimized. For more information about how technology is helping (and will help) the oil and gas industry recover, contact Heavy Iron Oilfield Services LP today.
Subscribe to Email Updates
Recent Post
| A new project in development in Oman may be able to revolutionize the way that people think about solar energy and oil and gas. The Miraah project currently being developed will use solar power in order to produce oil, thereby reducing the amount of natural gas Oman residences will need to rely upon. Ideally, the Miraah project will be able to address many of the outstanding issues with solar technology related to energy capture, while creating a more efficient and effective method of oil production. |
Xodus Group, an international group of energy consultants, has now completed the first stage of its multiphase flow research project
, and is now entering the second. Multiphase flow is designed to research, simulate, and predict how dynamic forces act within the piping that is commonly used throughout the oil and gas industry, for a better understanding of the technology's potential improvements.
Reports have revealed that two-thirds of the natural gas in the United States are now coming from fracking
, thanks to the extensive shale gas resources and the proliferation of unconventional drilling throughout the country. Natural gas is increasingly being used throughout the globe as a more environmentally-friendly alternative to goal, and the domestic energy markets are seeing a significant reduction in utility costs.
As the oil and gas industry has been hard at work decreasing its oil production costs, the oil transportation industry has been similarly engaged. The need for oil transportation on a national and global level has been increasing alongside the need for oil throughout the world. As oil production ramps up in the United States, the old oil transportation methods have become insufficient and inefficient for the new volume of materials that need to be moved. New technologies are presently being developed to make it easier and faster to transport oil, thereby reducing overhead for the industry as a whole.
The Gulf of Mexico has been steadily increasing its oil production despite concerns regarding plummeting oil prices. In fact, production has increased enough that the Gulf of Mexico is expected to reach a record high in 2017. Many oil production companies and unconventional drillers have increased production throughout the United States rather than slowing down. Despite this, oil and gas remains a big and booming business.
