Sept. 2000 Vol. 221 No. 9  Production

Perry A. Fischer,  Engineering Editor

E-commerce for all?

Spears & Associates conducted 125 interviews that covered the e-commerce plans of more than 70 oil companies. They found that 40% are aggressively pursuing e-commerce, with majors and large independents leading the way. One result is that suppliers may be pressured to package their equipment with less service and more standardization for e-commerce needs.

Not surprisingly, the study found that purchasing specialists are more interested in e-commerce and have a better understanding of its usefulness than do engineers. Majors and large independents tended to rate e-commerce higher in usefulness than did smaller oil companies. However, the authors said that the visibility of e-commerce currently exceeds its applicability, leaving the industry temporarily disillusioned.

Based on the operator survey, a model was developed to estimate the e-commerce market share and apply it to 35 major upstream-market segments. Results show that within a few years, e-commerce will account for more than half of the transactions in areas such as artificial lift, casing and cement equipment. However, service-intensive segments will offer less opportunity for e-commerce.

Spears also monitors changes in e-commerce impediments. Barriers such as the current tightening-supply environment and regulatory scrutiny of buyer-owned e-commerce sites for anticompetitive behavior offer little incentive for suppliers to restructure their businesses around e-commerce. The study notes that only a few Internet businesses are fully operating as e-commerce portals / hubs for equipment and services. The population of portals is expected to continue to rise – then drop dramatically – leaving only a few of the fittest. E-commerce portal changes are tracked and posted on the web at www.spearsresearch.com for the industry’s benefit.

Standardizing e-commerce. Twelve of the largest oilfield-services firms said they intend to form a joint venture company, OFS Portal, to provide customers with a standardized source of electronic catalog and service-agreement information for upstream products and services. The companies are ABB, Baker Hughes, BJ Services, Cooper Cameron, ENSCO, FMC, Halliburton, National Oilwell, Schlumberger, Smith International, Transocean Sedco Forex and Weatherford. The first phase, now underway, is to conduct a design study.

The 12 founding members are responding to increasing requests from B2B exchanges, portals and individual customers to provide information and support to their various online-procurement efforts.

The intent of OFS Portal is to benefit both buyers and sellers by reducing overall costs and improving efficiency through a common approach to integrating supplier offerings into multiple e-procurement environments. OFS Portal services will be available to all customers, either individually or through B2B exchanges. Suppliers in all oilfield products and services segments may participate in OFS Portal.

As a not-for-profit, independent service, OFS Portal would format and publish standardized content, enable subscription by users, establish transaction standards and facilitate other aspects of the procurement process. OFS Portal would not operate as an exchange for executing transactions.

First oil is tall order. In July, Texaco and 50%-partner Marathon began production of gas and oil from the Petronius project in Viosca Knoll Block 786. Located about 130 mi southeast of New Orleans, production from five previously suspended wells should reach 40,000 bopd and 35 MMcfgd by October 2000. Infill drilling during the next 15 months should allow peak production to reach 50,000 bopd and 70 MMcfgd.

The $500-million fast-track development features a compliant tower – the first design of its kind to use flexible supports. With water depth at 1,754 ft and surface facilities more than 200 ft above sea level (tip of flare boom), the 2,000-ft free-standing structure is the world’s tallest.

Acoustic emulsion breaker. Sonic Research Corp. of Moline, Illinois, has acoustic oil-separation patents. Etrema Products of Ames, Iowa, makes high-efficiency acoustic sources. The companies have combined their technologies to create a crude de-emulsifier and degasser. The device, installed inline and downstream of the wellhead, uses high-pressure sound waves at targeted frequencies to separate water, gas and oil.

In a well that produced heavy oil with a high solid content where the operator was using chemical separation methods, the manufacturer says that the device reduced watercut to 1%, while chemical use was reduced 50%. Savings to the producer were about $1.2 million per year. Operating costs for the acoustic device run about $2.40 per day for electricity. Tim Drake can answer questions at tim.drake@etrema-usa.com.

Coalbed methane / CO₂ sequestration. Among the 13 research projects for carbon sequestration that the U.S. DOE has funded, two help coalbed methane production.

   The San Juan basin along the New Mexico / Colorado border is the leading coalbed methane producer in the U.S. Advanced Resources International of Houston won a DOE contract to assess the ability to permanently store CO₂ in deep, unminable coal seams – with the added benefit of enhancing methane production. CO₂ has an affinity for coal greater than that of methane, so it should displace methane, thereby enhancing production.

DOE will contribute $1.4 million; private contributions amount to $5.8 million for the three-year project.

   The Black Warrior basin in northeastern Alabama is another prolific coalbed methane producer. The three-year project will be conducted by the Geological Survey of Alabama, which will contribute $608,000. DOE will contribute $790,000.

The projects’ objectives are to understand reservoir mechanisms, validate reservoir modeling and document field procedures. The ultimate goal is assessment of the technical and economic feasibility of this type of enhanced recovery for various types of coals. From this, a screening model will be built that can quickly determine feasibility for any combination of coal and injection-gas properties.

Comments? Write: fischerp@gulfpub.com