Journey to the center of the earth
Have you seen National Geographic’s documentary on Perdido – the world’s deepest direct vertical access spar? It’s capable of delivering the equivalent of 130,000 barrels of oil per day from some of the most extreme depths ever reached in the Gulf of Mexico. This giant structure was brought into place and secured with acre piles in the sea floor nearly 2,350 meters below sea level to hold firm against tropical storms and hurricanes like Katrina.
Also entering the ultra-deep-water-drilling space is Shell’s new project, Stones. This project will soon host the deepest production facility in the world at nearly three kilometers below sea level. Perdido and Stones were built as an answer to the volatile nature of the oil and gas industry. Limited amounts of easily accessible oil is driving companies to explore at greater depths of the ocean and in remote places like the Artic.
Facing the harsh truth
The need to maintain margins is now greater than ever. Why? Because high-cost projects like Perdido and Stones are driving capital expenditure to a record high. Operational expenditure involved in building and operating the platform are also increasing as a result of maturing oil fields. Although we have seen some modest improvements in the oil price since June 2014, all signs now point to the Organization of the Petroleum Exporting Countries (OPEC) agreeing to maintain its production ceiling. The harsh truth? The price of oil is unlikely to recover anytime soon.
Let’s look at this from an economic point of view. The price of oil has fallen by more than 50% since June 2014, when it was $115 (US dollars) a barrel. It is now below $60 and the outlook isn’t bright, meaning that the revenue of the oil and gas will remain under pressure for a while. In combination with the structurally increasing costs, this negatively affects the return of investments of any project in the industry. As a result, companies are forced to find ways to further boost efficiency and productivity.
The bottom line? The industry needs to be able to operate at $60 – $65 a barrel and further improve its operations to reduce costs. But how?
The solution you’re looking for
As margins get narrower, optimization becomes the industry’s new buzzword. But how can your oil and gas operations benefit from optimization?
In our recent 30-minute webinar, David Blain, the leading industry expert described how the best optimization technology makes the difference between good and great. In addition, he walked participants through 5 simple steps to successfully utilize this technology and illustrated the steps with real-life scenarios.
It’s not too late to leverage on these insights. Watch David’s free webinar recording and discover how to optimize your profits in the hard-hit oil and gas industry.