December 2014 ///
The year 2014 has been a period of not only great profitability for the global upstream industry but also a time of considerable volatility.
China is the predominant player on both the demand and supply sides of the global oil and gas industry.
With oil prices softening, the pressure to get more out of each well, and longer life out of every bit, will only increase.
Multi-zone play chugs on amid lower prices
Sand generates respirable dust comprising crystalline silica, which is a concern for the hydraulic fracturing industry.
Increased onshore drilling activity means an increased risk of spills that can occur at the well site—spills that can harm the environment and pose safety issues.
As the quantifying of environmental impacts becomes increasingly important for the oil and gas industry, a report from Golder Associates commends Italy’s environmental performance.
Not satisfied with their efforts on a national, federal scale, environmental and other anti-industry activists have begun to focus on the local level, in their attempt to block the U.S. shale oil and gas revolution
Precarious present, uncertain future
When your well speaks, listen
Tell me it ain’t so
Taking safety to the next level
Horizontal wells: A standard for today
Bifurcation and belt-tightening for offshore drillers
How robust is Norway’s petroleum industry?
A new era dawns in U.S. Congress for E&P industry
SEG stimulates debates on data, technology and mammal monitoring
Hydraulic fracturing helps the geothermal industry build up steam
New EU Directive recognizes regime model for safe offshore operations
News & Resources
Companies in the news
Industry at a glance
Meeting and events
New products and services
People in the industry
World of oil and gas
Efforts to build the intelligent oil field have been underway for more than a decade. Advances have been made on a number of fronts, driven by real needs, perceived future needs and notable failures. No driver has been more visible than the Macondo incident.
The North American shale revolution has completely changed the visibility of oil and gas operations, throughout the world. Shale development is attractive for most countries, because it can increase domestic supply (with the potential for exports) and displace the use of coal or liquid hydrocarbons. The economic impact (job creation, capital expenditures, revenues to the state) provides positive benefits. Two of the most impressive benefits include the economic impact of low-cost natural gas on the economy, and the sharp decrease in greenhouse gas emissions, due to decreased reliance on coal-fired power plants.
“The government, flush with wealth, is expected to be generous. When the price of that commodity drops, a government which would remain in power dare not cut back on this generosity.”—Daniel Yergin, The Prize
In 1971, Walt Disney World held its grand opening in Florida. My entire family was there on that day, and, for many years to follow, we made our annual pilgrimage to the Magic Kingdom. While it was loads of fun, many of the attractions were educational and designed to inspire. For me, Walt Disney’s Carousel of Progress in Tomorrowland was a pivotal attraction. The Carousel of Progress depicts a typical American family and explores the joys of living through technological advances across different time periods, including speculation about how these improvements might continue into the future.
The UK Continental Shelf (UKCS) is at a crossroads in its long-term evolution, as recent measures of activity present a mixed picture. Production has been falling at a brisk pace, reaching 1.45 MMboed in 2013. This is far below the peak of 4.5 MMboed in 1999. This is due to several factors, particularly the natural and inevitable decline in output from mature fields, the falling, average size of new field discoveries and development, and the fall in production efficiency. Production efficiency is the ratio of output to the maximum attainable rate, taking into account the need for regular maintenance. This ratio has fallen from 81% in 2004 to 61% in 2012, and reflects the substantial increase in downtime from technical problems in producing facilities. This problem is present in very old, and not-so-old, platforms.
As I sit down to consider 2015, Chevron’s upstream portfolio is poised for continued growth through projects around the world. Our resource base is large and diverse, providing us flexibility to react to market conditions. We have a strong balance sheet and the capacity to fund attractive growth opportunities—even in times of lower crude prices.
The words of Jean-Baptiste Alphonse Karr, “plus ça change, plus c’est la même,” or in the approximate English translation, “the more things change, the more they stay the same,” resonate for me, especially today. Our industry, particularly in North America, has gone through a great resurgence with the growth in unconventional reservoir production.
Exactly one year ago, I reported on a blooming international oil and gas industry, at an all-time-high investment and activity level. At the same time, I warned against over-heated markets and some dark clouds on the horizon. Now, one year later, the clouds are here!
Like every year, 2015 will bring its share of surprises and unpredictable events. A year ago, the politics of the mid-term elections dominated much of the energy-related discussion. Notice I said “discussion,” because decisions were hard to come by, with a divided Congress and White House.
Oil prices in the world market hit a three-year low during November, but that has not inhibited the enthusiasm and positive long-term outlook for the energy industry. The surge in U.S. production has changed the game for the national economy and reset the world stage. The recent drop in prices represents a shift of market fundamentals adjusting to a new, abundant supply. It also signals the growing strength of the United States’ hand.
Got volatility!? The topic du jour is crude oil. As I write this article, West Texas Intermediate oil prices are $75/bbl, Brent is below $80/bbl, and the collective energy business is holding its breath after OPEC failed to cut production quotas during its Nov. 27 meeting. We have not had to worry about a cut since 2009, and OPEC watchers are coming out of the woodwork. The reality, unless you have Saudi oil minister Al-Naimi’s cell phone number, you are just another member of the OPEC guessing club.
My life as an entrepreneur—it couldn’t be better or more challenging. Entrepreneur; noun, [ahn-truh-pruh-nur,-noo rz; a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk. Yes, I am once again a small business owner, hoping to do something significant. A short case study of my most recent start-up will hopefully provide insights into whether entrepreneurship is for you.
International Offshore Rigs
International Rotary Drilling Rigs Graph
International Rotary Rig Count
Rotary Rigs Running in US
Selected World Oil Prices Graph
Monthly US Gas Prices and Trends ($/Mcf)
U.S. Oil Production
U.S. Onshore Well Count
U.S. Rotary Drilling Rigs Graph
Workover Rig Count
World Oil and NGL Production Table
Deeper, faster, safer, cheaper—the demands on drilling rigs are huge, unrelenting and, sometimes, even contradictory.
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