As we near the start of any annual event—in this case the Offshore Technology Conference (OTC) in Houston—it’s natural to step back and take stock of the past year. My column in May 2014 spoke about the increased need to deal with spiraling costs.
With the oil price then at $105/bbl, the need to counter soaring cost inflation was apparent—but seemingly not urgent. There was an upbeat buzz at OTC, and talk abounded about project opportunities and increased upstream investment.
Fast-forward to today, and how times have changed. Now almost diametrically opposed to last year’s optimistic mood, the drive to cut costs and improve efficiencies with a price in the $50/bbl to $60/bbl range dominates the landscape.
But it is often at times like this that real innovation starts to shine. So here are some examples of flexible thinking and positive outlooks to brighten your day, all of which are direct from experienced offshore industry individuals I’ve been lucky enough to hear in recent weeks:
- Statoil says 60% of its planned wells this year (between 95 and 100) will be delivered with a standard well design to help reduce costs and standardize the process.
- BP’s Global Subsea Hardware eastern region, which looks after everything from wellheads and trees to manifolds and umbilicals, is spending more “stewarded capital” in 2015 than it did in 2014, when it spent $1.2 billion.
- A future vision—with the growing number of LNG-powered offshore supply vessels entering the market to help meet stringent emissions regulations, Wartsila has an LNG-powered drilling rig design on the drawing board.
- ABS recently granted approval in principle to OTEC International for a 5-MW to 7-MW ocean thermal energy conversion floating power plant, designed to generate electrical power for a commercial utility grid in tropical and subtropical zones. It uses heat from surface seawater to vaporize a working fluid, driving a turbine generator to produce electricity.
- Chevron wants to proceed with its Rosebank FPSO project west of the U.K.’s Shetland Islands but with a downscaled production capacity. It’s also keen to push on with future phases of its Jack-St. Malo project in the Gulf of Mexico as well as a semisubmersible production hub proposal for Keathley Canyon.
- According to Norway’s Ulstein Sea of Solutions, two offshore segments showing distinct promise despite the general downturn are the accommodation market and the well intervention sector as operators focus on cost efficiency and the maximizing of productivity from existing assets.
- Although some newbuild ultradeepwater drilling units are being postponed or delivered without a contract, the mid-deepwater drillship segment is more capex- and opex-efficient and may still be a promising mid-term segment, according to Ulstein.
These are just a handful of examples, but they are reassuring—innovation and opportunity are alive and kicking in this cyclical industry of ours.
Natural gas supply is limited by hesitancy from investors and producers, as well as logistics constraints.
Big private-equity house is keen to build out from base of 1.4 million bbl/d disposal.
Private-equity firms have billions in dry powder; the only question is timing.