Times A Changing in the Oil Patch

I’m traveling and in meetings for much of this week, so posting may be lighter than normal. One of the huge events on the spring agenda for energy-related companies and policy makers is IHS CERAWeek, taking place March 6-10 in Houston, Texas.

The year promises to be especially exciting given the recent announcement by OPEC to limit oil production in an effect to boost oil prices and revenues for all the member countries. With the higher prices, the economics of shale oil production in the U.S. becomes much more attractive.

It will be fascinating to see how quickly production can be brought online to take advantage of the higher prices before this increased production drives down prices. And how much tolerance with OPEC members have to loss of market share.

I closely follow many of energy reporters to get their views on how long these moderately higher prices will last. With the potential of the Texas Permian basin region, the consensus seems to be that production rates can be brought online in near term. Time will tell what the reaction to these increased production levels will be from the OPEC countries. Here are some samples of tweets highlighting the dynamic state of today’s energy markets: Continue Reading

Connect with Emerson Power Industry Experts @PowerGenWeek

Emerson's Matt Cate

Author: Matt Cate

POWER-GEN International kicks-off next week (December 13-15) in Orlando, FL. Emerson experts will be available to discuss ways utilities can improve unit availability and achieve more flexible operations. They’ll also share strategies for making shrinking plant workforces more effective. The following are some ways you can connect with them.

Attend a Technical Session

Emerson experts are participating in these sessions: Continue Reading

Ways to Reduce Oil and Gas Lease Operating Expenses

For onshore oil & gas producers, squeezing every expense possible from the production and custody transfer process means the difference between flowing and shutting in the wells. In an RBN Energy post, LOE-Down – Understanding Lease Operating Expenses And How They Drive Production, they examine lease operating expenses (LOEs):

…the costs incurred by an operator to keep production flowing after the initial cost of drilling and completing a well have been incurred––are a go-to variable in assessing the financial health of E&Ps.

Emerson's Michael Machuca

I caught up with Emerson’s Michael Machuca on ways instrumentation and automation can play a role in driving down operating expenses. He noted that one key way is reduce the number of trips that need to be taken to the well pad location.

The RBN Energy post explains the relationship between LOE and personnel tending to the production sites:

…the costs associated with employees known as “pumpers,” “well tenders,” or “lease operators,” who regularly monitor and maintain onshore wells. Their wages, vehicle expenses, gasoline costs, and any other expenses they have for items they use while tending to the wells (such as methanol for de-icing) are all LOEs.

Manually measuring, tracking and accounting for the oil, gas and water produced is time consuming and labor intensive—contributing to higher LOEs. Errors in this manual approach can lead to large discrepancies in produced versus sales volumes and produced water disposal costs. Continue Reading

Maintaining Secure and Reliable Control System Performance

Control systems are the heart of manufacturing and production processes. Keeping them operating at peak efficiency while also keeping them secure requires time, energy and focus. Automation suppliers can play a large role in these efforts. News came out today of Guardian Support improvements and simplifications in how DeltaV distributed control system users can better monitor the security and health risks associated with their systems. These enhanced capabilities include:

…updated dashboards and faster access to education and support – increase an organization’s ability to make business critical decisions to improve risk, incident, and lifecycle management.

Emerson's Bob Cruz

I caught up with Emerson’s Bob Cruz who presented along with Yoga Gorur at the Emerson Exchange conference in Austin this past October. Their presentation, New and Improved Guardian Support Improves Your Lifecycle Costs, describes the Guardian Support program as a core element in lifecycle services available for customers.

Guardian support enables real-time visualization and management of the control systems and proactively provides critical, relevant, system-specific information to keep them current. For example, many plant staff engineers are hard-pressed to keep with the security updates caused by issues found at various levels of the software stack. There is also fear about what these updates might affect in the running system—is the patch really necessary and if so, how urgently must the system be patched? Continue Reading

Improving Capital Project Performance

When large capital project teams consider the importance of optimizing ongoing operations and asset management in their designs, the results can impact which quartile the manufacturer and producer operates in compared with their industry peers.

In a ControlGlobal.com article, Plantman Go: The future of asset lifecycle modeling, author Bob Sperber surveys automation suppliers for their views on ways to improve capital project performance while keeping an eye on ways to improve operational performance success through the lifecycle of the manufacturing process.

Emerson's Jim NyquistHe quotes Emerson’s Jim Nyquist on the challenges with large capital projects:

Today, 65% of projects worth more than $1 billion and 35% of projects under $500 million fail, where failure is defined as at least 25% over budget and/or late by 50%.

To address these financial issues:

Emerson’s Project Certainty, which in part resulted from Emerson’s 2014 acquisition of Management Resources Group, led to a merger of consulting and technology that targets project inefficiencies with a mix of services, methods and technologies. These capabilities include unified project documentation and information (including tag databases and instrument indices) from multiple sources. Project Certainty also uses Emerson’s Characterization Modules (CHARMS) and Smart Commissioning technologies for electronic marshaling with smart junction boxes, which reduces commissioning time for HART and Foundation fieldbus devices by up to 80%.

Emerson’s Jason Sarnataro explained: Continue Reading