FOCUS ON EFFICIENCY: OIL AND GAS MARKET STARTING TO SHOW SIGNS OF IMPROVEMENT
- Written by Stuart Large
Despite an upturn in market conditions, rising oil prices still remain far from the levels that were seen 18-24 months ago. Therefore, investment into the latest technologies is going to be crucial for operators to remain profitable amid production cuts.
Oil prices have surged to a one-year high after some of the world’s largest oil producing countries agreed to reduce output, following OPEC’s decision to cut production by 1.2 million barrels a day. The latest commitment to cut production by both OPEC and a number of non-OPEC producers have seen Brent Crude prices rise above USD 50, the highest increase since July 2015.
After 18 months of extreme volatility, which has seen operators make cutbacks and halt capital investments, the oil and gas market is starting to show signs of improvement. The recent rebound in oil prices should bring a welcome bout of stability to the market in 2017, giving operators a chance to review their processes and re-evaluate their production decisions. A major focus for them will no doubt be on completing downhole operations as efficiently and cost-effectively as possible.
This focus on efficiency will mean there will be an increased focus on downhole sensing technologies, such as Distributed Acoustic Sensing (DAS). Monitoring tools such as DAS enable operators to achieve optimal production levels with minimal resources, significantly enhancing the profitability of well sites.
After two years of serious market volatility, a return to price stability (even if at a significantly lower level than the highs of USD 100 plus per barrel) is a positive sign for the industry. However, with production cuts coming into effect from January 2017, investment into the latest technologies will be essential for operators to ensure the long-term profitability of their assets.
Stuart Large is product line director at Fotech Solutions. He has worked in the oil and gas industry for more than 16 years and has a wealth of industry experience and technical expertise.
Stuart Large started his career as a field engineer at Haliburton Energy Services, before spending 10 years at GE Sondex and then joining Fotech from NuTech Energy Alliance.