Taking volatility out of market price uncertainty for oil and gas companies

28 October 2013

Tristan Colgate

Tristan Colgate

Former Managing Director

Volatile commodity prices provide a continuous headache for companies and project managers alike, due to their potential to squeeze profitability. The onus is now on firms to operate efficiently and trade effectively.

It is said there is only one certainty for the continuously changeable oil and gas market right now: market price uncertainty.

The industry faces waves of added costs and new regulatory challenges as it tries to navigate towards operating efficiently while trading effectively. With demand for oil slowing across the globe, especially in emerging market countries like China and India, oil prices have risen significantly in 2013. Although uncertainty is nothing new, the issue has become more complex. Both upstream and downstream operations are affected in equal by everything by everything from climate issues to physical and future market demand.

But taking these factors into account, technologies and strategies have matured, creating ways of navigating around this and working towards a better operation practices. The offshoots of effective implementation through technology has potential to:

  • Extend the life of valuable equipment

  • Improve the efficiency of your operations

  • Protect the health and safety of your people

  • Heighten awareness of brand identity

Here are some ideas as to how your company could achieve this.

Real-time monitoring

Performance issues can lead to increased plant downtime and loss of efficiency, and increases service costs. Operational issues can often be more related to the environment than the instrumentation.

Quantifying these is important to eliminate any issues and determine service costs and warranty issues. By adopting real time solutions on well production, companies can achieve greater efficiencies and prolong asset life with visibility into asset health, from the well head to the terminals. Proactively plan maintenance and repairs to ensure that spare parts arrive in a timely manner, even for remotely located and geographically scattered drilling rigs, wells, platforms, pipelines, and refineries. Reduce well downtime through real-time monitoring and condition-based maintenance programs.

A big advancement of the coming years is sure to be IBM’s developing the world’s first integrated environmental monitoring system aimed at helping oil and gas companies minimize the environmental impact of their operations.

Remote computing

As an intensive field, there are benefits for the oil and gas industry in utilising cloud software.

Whether it is the flow of information from field measurement instruments, land contracts or titles, or regulatory documentation, reliable and timely data transmission is critical to safe and profitable operations.

By maintaining high power workstations under the operational control of the specialists that need them, whilst seamlessly integrating the software of the workstations with the cloud system for all other functions.

The results in a true hybrid, not two systems running independently of each other with a convoluted link, but two systems that appears to operate as one. While installation can be costly, the benefits are long lasting.

Cloud systems make better use of technology, sharing infrastructure amongst multiple users and offices, offering a greater level of scalability and reducing the ongoing cost of implementation and continual development. It also enables companies to respond quickly to operational developments and third party requests.

Remote working is increasingly becoming more commonplace for many oil and gas companies, with employees either working from multiple offices, home or on the road. Having the entire company network at your fingertips is the difference between feeling connected and being out of touch.

Developing the digital oil field

Like with the majority of industries, big data is sure to set the agenda in both the present and the future. And certainly, the oil and gas sector is no stranger to big numbers.

This data includes large volumes of semi-structured and unstructured data—ranging from high-frequency drilling and production measurements to daily, written operations logs—that quickly add terabytes of new data. While real time monitoring is important, data will allow producers more agility.

Companies must take advantage of software integrating technical data with business information, across multiple IT systems.

They must enable searches of big data repositories to help companies quickly identify and visualize information among vast quantities of structured and unstructured data, and deliver results to support time-sensitive processes.

 

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