<a href="http://youngpetro.org/2013/03/06/how-is-it-possible-to-produce-oil-from-sand/"><b>How is it possible to produce oil from sand?</b></a> <a href="http://youngpetro.org/2011/10/09/people-engineers-and-spe-members/"><b>People, Engineers and SPE Members</b></a> <a href="http://youngpetro.org/2012/12/19/if-i-were-a-prime-minister/"><b>If I Were a Prime Minister…</b></a> <a href="http://youngpetro.org/2012/12/26/polish-shales-delayed/"><b>Polish shales delayed?</b></a> <a href="http://youngpetro.org/2013/01/11/russia-continues-the-policy-of-states-companies-monopoly/"><b>Russia continues the policy of state companies’ monopoly</b></a>
 

Carbon Capture and Storage (CCS) in the light of Oil Industry

Carbon Capture and Storage (CCS) in the light of Oil Industry

“__It is a process in which waste CO2 is being captured at large point sources and then transported to the site where it will be sequestered in geologic formation__”

Purpose of CCS

1. The atmosphere will be protected from release of CO2 and Global Warming will be reduced

2. It can be used in EOR processes to increase oil recovery

Stages involved in CCS

It is a three step process:

1. Capturing: First CO2 is captured at the fossil fuel and industrial power plants

2. Transport: CO2 is transported via pipelines to the storage site

3. Sequestering:Then it is injected into declining oil fields to increase oil  recovery or it is stored in geologic formation

In above statement it is mentioned that gas is injected into the declining oil fields, now question arises that:

Why abandoned oil fields are candidates of Carbon Storage?

Answer to this question has several explanations:

1. Oil and gas that originally accumulated in traps did not escape for many millions of years, demonstrating their reliability and safety

2. Geological structure and physical properties of most oil and gas fields have been extensively studied and characterized

3. Computer models have been developed in the oil and gas industry to predict the movement, displacement behavior and trapping of HC

4. Some of the infrastructure and wells already in place may be used for handling CO2 storage operations

5. Depleted fields will not be adversely affected by CO2 and if hydrocarbon fields are still in production, a CO2 storage scheme can be optimized to enhance oil or gas production

It’s Application in Enhanced Oil Recovery

EOR through CO2 flooding offers potential economic gain from incremental oil production.

Driving Mechanism

Percentage Recovery References

Conventional Primary Production

05-40% of OGIP

Holt et al., 1995

Secondary Recovery

10-20% of OGIP

Bondor, 1992

CO2 used for Enhanced Oil Recovery 07-23% of OGIP

Martin & Taber, 1992; Moritis, 2003

How does it work?

Continuous CO2 injection or alternate water and CO2 gas injection are two of the CO2 Injection Schemes in which oil is displaced by gas injection. These mechanisms vary from immiscible displacement at low pressure to miscible displacement at higher pressure applications. In these processes 50 to 67% of CO2 returns to the surface with produced oil, and is usually separated and re-injected into the reservoir to minimize operating costs.

The remainder is trapped in the oil reservoir by means of irreducible saturation and dissolution in reservoir oil that it is not produced and in pore space that is not connected to the flow path for the producing wells.

Advantages of CCS
  • CCS is attractive because the geology of HC reservoirs is generally known
  • Storage costs will be offset by the sale of additional oil recovery
  • It is a key tool in tackling climate change, providing energy security, creating jobs and economic prosperity
  • CCS could reduce global CO2 emissions by 19%, and that fighting climate change could cost 70% more without CCS
  • CCS could play an important role in order to reduce Green House Gas Emission
Disadvantages
  • Disadvantages of old oil fields are their geographic distribution and their limited capacity
  • Subsequent burning of the additional oil recovered will offset much or all of the reduction in CO2 emissions
  • Presence of impurities in the CO2 gas stream affects the processes of capture, transport and injection mainly due to corrosion and fouling
  • Leakage of stored CO2 is a major concern with CCS
  • CCS technology leaves behind dangerous waste material that has to be stored, just like nuclear power stations
  • The technology is expected to use between 10 and 40 percent of the energy produced by a power station
  • The use of CCS can reduce CO2 emissions from the stacks of coal power plants by 85–90%, but it has no effect on CO2 emissions due to the mining and transport of coal
Conclusion

There is an urgent need to tackle climate change and we need “all the tools in the box” to do so; we cannot tackle climate change effectively without CCS. And if this technology is being used in EOR processes, we can not only recover additional Oil but also can prevent our environment from further demolition.

 

Nanotechnology – A Wind of Change – in Oil and Gas Industry!

Nanotechnology – A Wind of Change – in Oil and Gas Industry!

Unless, revolutionary new sources of energy have been industrialized, yet it appears that we are going to be reliant on hydrocarbons for the foreseeable future. Even in the most optimistic and realistic situation  the existing sources of energy like wind, water, solar and geothermal will only make up 15% to 20% of our total energy by 2035.

A Look in the Direction of Past

Recovery Mechanism

Even after all of the EOR and IOR steps have been taken, it is still not uncommon for 60 – 70% of the original oil to be left in the reservoir. So, if you think about that, there are billions of barrels of discovered oil that we’re leaving in place.

The U.S. Department of Energy did a study back in 2007 that estimated that there are at least 60 billion barrels of oil remaining in the Permian Basin, which is on the border of west Texas and New Mexico. Remember, these aren’t undiscovered oil fields, or deep water fields, or unconventional oil fields. This is oil that’s left behind in existing fields with existing infrastructure.

Why bulk of the Oil remains unrecoverable?

Answer to this question is capillary forces that bind the oil molecules to the rocks. One can simply demonstrate this concept, take a sponge and fill it full of water. Squeeze it out into a glass and see how much water was absorbed. Now soak the sponge again, and try sucking out the water in the sponge with a straw. It’s much harder, isn’t it? That’s analogous to what we’re trying to do in an oil field, except that oil also adheres to the pores in our rock sponge.

So at this point, knowing that there are billions of barrels of remaining oil in place, there is a need for new technologies which can help improve production from the reservoir and develop new fields. Nanotechnology offers promising solution for the same. Nanotechnology – the study of science of materials at nano-scale – shows great promise for meeting challenges involved in understanding and utilizing the harder-to-reach oil and gas reservoirs of today.

Let’s talk about some basics. What is nanotechnology?

The prefix nano, derived from the Latin word nanus for dwarf, means something very small. When we’re using it in metric terms, a nanometer is one-billionth of a meter. Think about that! Take a strand of hair and put at it between your fingers. The width of that hair is 100,000 nanometers. A nanometer is about how much your fingernail grows every second. So a nanometer is really small.

Why is Oil Industry interested in Nanotechnology?

The incredibly small size of the nano-scale materials creates opportunities for them to be injected into oil and gas reservoirs. Geoscientists have analyzed enough of the oil-bearing sandstones to establish that the pore throat openings commonly range between 100 and 10,000 nanometers in width. That’s large enough for fluids like water, brines, and oil and gas to flow through relatively freely. So if we could put nano-scale tracers or sensors down a hole, they would be small enough to flow through these pores, and we could gain a bunch of valuable information about the rock and the fluid environment where the oil and gas is found.

How does nano-scale material act?

Nano-particles are the nano-sized materials in the range of 1-100 nm. Nano-particles have high specific surface area and unique properties, such as high adsorption potential and heat conductivity. These particles when mixed with base fluids, also called as nano-fluids, and used for several application related to upstream oil and gas industry, help improve the performance of several processes.

Nano-scale sensors – A Powerful Tool

Right now, doctors are working to put nano-sensors into the human body to determine where cancer cells might be and here, we’re looking into the Earth body and we’re putting nano-sensors down hole. What the nano-scale sensors will give us is a clearer vision, more data, so we can make smarter interpretations. And with a better idea of what’s going on underground we’ll be able to recover more hydrocarbons. That’s going to be huge for the industry and the world.

Application of Nano-technology

  • It is being used in Hydraulic fracturing, where the growing number of zones typically fractured pushes the performance limits of fracing applications
  • It can increase the strength to weight ratio of tubular, and prevent abrasion and corrosion of equipment with coatings and alloys developed from nanotechnology
  • It can also be used to address the challenges of reservoir monitoring

Conclusion

What’s often not appreciated by the public is how much oil is left behind in the oil fields, nano-science and nanotechnology may enable us to sense remotely and directly the bypassed oil and gas that we could never see or recover before. And with the sensors we’re developing to provide us with more information, we’ll be able to recover even more oil and gas that right now is being abandoned and left in the ground. It can also help delay peak oil.

To maintain our quality of life, we’re going to continue to need affordable, safe and secure energy. Nano is one of the new revolutions in technology that will make that happen.

However, oil and gas companies also must be willing to invest in research and development into new technologies. “We make progress in R&D, but then we eat our own young,” said Matt Bell, President and CEO of GEO-Dynamics, a Millsap, Texas-based developer of perforating technologies. “We need entrepreneurs who are willing to invest and get nanotechnology from the research institutes to commercial application.”

Photo Courtesy: Google Images

References

 

 

Is Gender Diversity an Issue in Oil Industry…???

Is Gender Diversity an Issue in Oil Industry…???

In continuation to the previous article where I have talked about the barriers faced by women in the Industry, how they can thrash their opponents, and what preferences do men and women give to choose best career for them. Now I will confer some facts and figures in respect of pay gap and will discuss the role of some of the leading companies for women contribution in the Industry.

http://youngpetro.org/2014/01/30/is-gender-diversity-an-issue-in-oil-industry/

In respect of pay

36% of respondents say male oil and gas professionals are more highly paid than female oil and gas professionals and 44% of oil and gas professionals noted they believe pay is comparable between the genders.

Improvement

Respondents in the U.S. were not only more positive about the career prospects for women in the oil and gas industry, but improvement is also seen in recent years.

Gender 2

“I attribute this to the theory of dominant discourse which says that men are better than women. But I have no doubt about my own potential as a women and that’s why I appoint more women than men,” said NERSA CEO Phindile Nzimande.

Hence the industry needs to bring a different approach in leadership and take into account that women serve in various roles within society-they are mothers, wives as well as professionals.

The platforms and opportunities are there for women in the oil and gas industry, but they are not satisfactory. All we need is to exchange a few words about the industry, and more people need to start taking gain of country’s renewable energy, the skills opportunities, and the business that this industry is bringing, rather than letting huge multinational companies come in and take advantage.

Role of Companies

Many multinationals now have good employment practices in place e.g;

Schlumberger, a leading oilfield service, takes pride in saying that it has a much better sex ratio than anyone else in this field.

Shell outlined that by providing equal opportunities and appreciating the diversity of ethnicity, age and gender, a working culture where differences are valued will be will created.

Women, who represented nearly 32 percent of BP’s hires last year, are playing an increasingly vital role in the effort.

A message to young female professionals

“Get yourself up the ladder with your high heels on”

Getting an engineering degree is not enough, the qualification only gets you into the organization, but the rest of your journey in the company lies entirely with you. Once you are inside the organization, different set of rules apply. You need to develop the right attitude and work very hard.

How can we remove the Gender Imbalance?

When a educated female professional is sidelined in favor of a less qualified man, it is obvious that equality and justice are not fully served. We must realize that there is power in the masses, and seizing this power requires cooperation and shared objectives.

Conclusion

It is about time and interest we all start building and supporting professional networks that eradicate the male vs. female polarization in the industry. The PR industry is known for promoting sustainable development and environmental values, and this list should really include gender equality as well. All the actors in the industry should roll up their sleeves and start working together across gender barriers. The energy professionals should step forward to ensure it is attractive to women and analyze that still a lot of work has to be done in terms of a gender balanced pool of talent.

Refernces

  1. http://www.prnewswire.com/news-releases/survey-reveals-increasing-representation-and-opportunity-for-women-in-the-oil-and-gas-industry-in-recent-years-235222711.html
  2. http://www.wbs.ac.za/article/opportunities_and_challenges_for_women_leaders_in_the_oil_gas_industry
  3. http://www.rigzone.com/news/oil_gas/a/127452/Women_Fill_40_of_Vacancies_in_Oil_Gas

Is Gender Diversity an Issue in Oil Industry…???

Is Gender Diversity an Issue in Oil Industry…???

Few months back, a discussion about “Gender Diversity” on one of the social networks caught my attention. So after little research I considered to write on this topic because being female and part of this system, I can better understand that surviving in a male- dominating Industry is really challenging and demanding.

A non-traditional or male-dominated industry like Oil Industry contains 25% or fewer women in total employment. While women have made headway into certain industries and occupations, there is still a great gap between women and men in many industries and occupations. One school of thought is that there seems generally to be a shortage of women taking math and engineering courses.

Survey Report

The study conducted by BP and Rigzone, examined female representation in the energy workplace from the perspective of 3,000 oil and gas professionals. Nearly three-quarters of respondents (72%) believed oil and gas remains a male-dominated industry, and there is still a lot of progress to be made. One in five (20%) strongly agreed gender based discrimination occurs within the industry.

More than 60% said they expect the greatest increases in female representation to be among professionals just entering the industry and those early in their career.

“You represent an important pillar to development and function as a nation. I hope your work encourages young girls to take interest in Science so they can take their rightful place in industries that have been known to be male dominated,” said Science and Technology Deputy Minister, Advocate Tshililo Masutha.

Adapting a particular strategy you may diagnose the problem in the system, and with a positive mind set you will be successful in resolving the dilemma. For example:

What are the barriers to increase the proportion of women in the industry…???

1. Respondents cited societal conditioning
2. A lack of qualified candidates
3. Family care responsibilities

What strategies do we follow for improved situation of women participation…???

  1. Implementing STEM (Science, Technology, Engineering and Math) programs to improve gender balance
  2. Strengthening Communication
  3. Enhancing trained capabilities
  4. Women startup capital-credit facilities
  5. Enhance market access
  6. Accountability and transparency

Why do Leadership Positions tend to go to men…???

Despite the field is becoming predominantly female, the leadership positions still tend to go to men, and main reason for these facts is:

1. Family planning
2. The gender pay gap
3. The strong networks among men

Women do apply for leadership positions. This shows that planning a family is not as significant a factor as it is, however, women have always had a role at the workplace, and the housewife culture has never gained ground. Women are used to coping with both family and work as demonstrated by many female ministers.

How women can beat the system which is against them…???

  1. Women need a game plan and a clear indication of what they want to achieve
  2. Equip them with knowledge of how the systems work
  3. Make yourself relevant and always engage with the system
  4. Develop confidence-work
  5. Work together with men in opening doors and reaching equal opportunities

 

It is the common stereotype that women have to get married and be housewives, but one should strongly believe that women also have a role to play in the selling of oil and gas. If they would have succumbed to social pressures, they would also be lost to the industry mainly because of guilt.

How to choose a better carrier for yourself…???

When it comes to select a better opportunity, male and female oil and gas professionals were united on the top three decision points:

  1. Intelligibility in pay structure
  2. Ease of accessing mentoring and funding programs
  3. Flexible working arrangements

However, female respondents placed more importance than male respondents on mentoring and sponsorship programs and pay transparency, while female respondents placed more importance on childcare specific benefits. At the same time, both men and women placed nearly equal importance on flexible work arrangements when selecting an employer.

To read the concluding remarks on this topic, must read the next portion of this article, which will be published soon!!!

An Overview of ATC 2013

2 December, 2013 News 3 comments
An Overview of ATC 2013

So far I have published technical articles; but today I decided to write something different and interesting. Then I wondered how can I make it spellbound and captivated and came up with an inspiration why not share my personal experience of Annual Technical Conference (ATC) 2013, held at Serena Hotel, Islamabad-Pakistan. This article is bit lengthy but I hope you will like it.

Introduction

For those who are new with ATC, Annual Technical Conference has been an annual event for decades. It is a podium for oil industry professionals to meet and discuss the issues of mutual interests. This event hosted over 900 delegates from inland and abroad.

ATC 2013 was jointly organized by Society of Petroleum Engineers (SPE-Pakistan Chapter) & Pakistan Association of Petroleum Geo-scientists (PAPG) at Islamabad on 26-27 November.

SPE is a Global Organization whose main objective is to disseminate knowledge and sharing of working experiences amongst the professionals of the Petroleum Industry across the world, thus resulting in optimum exploitation of oil and gas; a fundamental source for this world.

PAPG is one of the 100 Geosciences Associations affiliated with the world’s largest professional Geological society, American Association of Petroleum Geologists (AAPG) with over 30,000 members in 116 countries. It provides geoscientists a platform to exchange and develop knowledge & skills.

Theme

Subject matter of the conference was “Energy Revolution through Hydrocarbon Resources”; the word ‘revolution’ in the theme symbolized the need for a step-change to triumph over the energy scarcity faced by the nation.  It reflects the industry’s eagerness for the search of hydrocarbons through enhanced exploration and production activities in the country.

Pre-Conference Courses

On 25th November, we went for our registration and also attended a pre-course titled “Enhanced Oil Recovery/ Improved Oil Recovery of Mature/ Depleted fields” by Mr. Haq Minhas (Sponsored by Baker Hughes).

The other course was under the title “How to Avoid Work Over- An Innovative Way to Bring Life to Old/ Dead Wells” by Mr. Koos Reinders (Sponsored by Weatherford). Unfortunately we couldn’t attend that session.

Paper Contest

Two student paper contests apart from professionals’ paper group were also held in the categories of Petroleum Engineering and Earth Sciences. ATC hosted 50 presentations including student paper contest, keynote speaker as well as panel discussion.

More than 100 student papers were received from UET Lahore, MUET Sindh, Khairpur College Sindh, NED Karachi and BUITEMS Balochistan, among which 12 papers were short-listed for oral presentation in the category of Petroleum Engineers (PE) Student Paper Contest and 10 in the category of Geology & Geophysicist (G&G) Student Paper Contest.

Technical Session

Technical papers presented for the conference highlighted the application of new and advanced technology in exploitation of indigenous resources of oil, gas and coal. Moreover special attention was given to aggressively evaluate the unconventional resources like coal, tight & shale gas and has to define strategy for the development of these reservoirs with the consideration of HSEQ (Health Safety Environment & Quality).

Panel Discussion

A board discussion attended by the managing directors of OGDCL, PPL, Mari Petroleum, MOL Pakistan, KUFPEC Pakistan, Weatherford Pakistan and Schlumberger was also held which was chaired by Minister of State for Petroleum and Natural Resources Jam Kamal Khan.

Closing Ceremony

Addressing the closing ceremony of ATC, Federal Minister for Inter-provincial Coordination Riaz Hussain Pirzada said, “The search for new energy resources on war footings was required.”

Current energy crisis requires search for new energy resources on war footing while soaring global energy prices have put an unprecedented pressure on many countries and are threatening to weaken gains to economy made due to growth rates.

The minister appreciated and lauded the SPE and PAPG to invite students from all over Pakistan to participate in the conference. He said this will promote inter-provincial harmony in addition to distribution of technical knowledge.

The role of provincial harmony was considerably increased after the completion of 18th Amendment, which posed this constitutional alteration a big change to resolve expeditiously and harmoniously the exploitation of hydrocarbon resources unimpeded.

Dr Saeed Khan Jadoon from OGDCL, (Chairman ATC), Imran Qureshi from Eastern Testing Services, (Vice Chairman ATC), SPE – Pakistan Chapter Chairman Masood Siddiqui, and PAPG Chairman Abdul Wahid Chughtai also addressed the conference.

At the end students were awarded with shields and cash prizes. 1st position was secured by UETian, 2nd from Mehran University; two students shared 3rd position (one from UET and other from NED).

Field Trips

Next day we visited following two yards:

1)      Eastern Testing Services (ETS)

2)      Sprint Oil & Gas Services FZC Pakistan

Mr. Zohaib Maqbool has given us the detailed overview of ETS in his presentation. This company was found to be the Flagship local service provider with superior service quality HSE and technology solutions in Well Testing and Well Intervention services addressing the market demand today and for future growth. Later we visited their tool yard with Mr. Tayyab, who briefly described the functioning of DST tool, separators, sand traps and many more.

At 12:30 PM, we reached at Sprint Yard, where Mr. Ghufran Hameed has given us presentation about HSEQ and Mr. Mustansar Raza has given us general idea about major services which Sprint provide. Then certificates were distributed among the students.

And that’s how my ATC 2013 journey came to an end. I would like to thanks SPE-Pakistan Chapter for providing me opportunity to attend such a big event and allowing me to interact with the industry people.

Technological Advancement in Oil Industry

29 October, 2013 News 5 comments
Technological Advancement in Oil Industry

Past technological advances have affected energy supply, demand, and production costs. Previously in oilfield, big data was gathered from many points throughout exploration, discovery, and processing. The capture and analysis of big data needed to drive decisions was challenging. Some of the challenges included data utilization, intelligent modeling, precise computation, and exploration speed and focus. However, in today’s world, handling of such data has become much easier. The sources of technology intended for the oil and gas markets have changed over time. In the early 1980s, major oil and gas companies began to decrease their research and development spending, and then services companies stepped forward to fill the void by increasing their R&D expenses.  The petroleum industry is fueling a secure future through advanced technology research and development.

Total R&D expenditures are divided as follows according to INTEK:

R&D Expenditures

Petroleum science has evolved from undeveloped geology to supercomputer- based calculations and 3D views of the subsurface. It has taken the drilling process from guessing game to the defined targeting of fields. The 21st century Oil & Gas Industry is charged by innovation and technology. It has dramatically altered the manner in which oil and gas reserves are identified, developed, and produced. Advancements in technology have also improved environmental protection and conservation of natural resources.

Technological advances affect all sectors of the energy market and all other regions in the world. The competitive petroleum industry promotes the technology transfer worldwide.  Petroleum refining has grown increasingly complex in the last two decades, due to lower-quality crude oil and environmental regulations that require cleaner manufacturing processes and higher-performance products.

Key drivers that are impacting the industry’s competitive position are following:

  • Safety and the environment
  • Exploiting changing markets and demand
  • Competitive forces
  • Increasing the efficiency of energy use and energy products.

In many cases, technology research and development (R&D) are keys to meeting these challenges and maintaining the health and profitability of the industry.

Technological Progress

Many of the technology improvements involve the use of existing technologies in more efficient ways. Major conception & evolution of technological developments are on the horizon of:

  • Fundamental Research
  • Oil and natural gas supply
  • Transportation
  • Industrial Markets

Form of Technology Progress

1-  New Material
2-  New Equipment
3-  New Knowledge
4-  New Management Techniques

Technological Progress is Difficult to Identify

1- Most technological progress is incremental. Small incremental improvements result in large advances over time.
2-Technological progress is often intangible, for example, new knowledge & new management techniques.
3- Technological progress often originates outside the petroleum industry, for examples, improvements in computer equipment and software. 

The Petroleum Industry has identified research priorities in the following areas:

Research Priorities

Photos: Mehwish & Google Images

References

  • INTEK: “Trends in Oil and Gas Industry R&D Expenditures (2004),” presentation prepared for Office of
  • Oil and Natural Gas, United States Department of Energy, Arlington, VA (2004).
  • Working Document of the NPC Global Oil & Gas Study
  • Petroleum Industry of the Future
  • Advancement on Drilling Technology in Petroleum Industry
  • The Impact of Petroleum Technology Advances on Long-Term Energy Markets

Iran-Pakistan Gas Pipeline

Iran-Pakistan Gas Pipeline

Peace Pipeline Project

Nowadays, growing energy crisis is causing severe electricity shortages in Pakistan. To bridge this gap the “Peace Pipeline,” also known as Iran-Pakistan Gas Pipeline project has been planned since the 1990s and originally would have extended from Pakistan to its old competitor, India. Iran has the world’s second-largest gas reserves after Russia, roughly 15% of the world’s gas supply. According to this project, the pipeline will connect Iran’s South Fars gas field with Pakistan’s Southern Baluchistan and Sindh provinces.

Involvement of International Politics

US ask Pakistan & India to pull out of Iran Gas Pipeline Project to qualify for extensive assistance. The United States has tried to discourage India and Pakistan from any deal with Iran because of Tehran’s supposed ambitions to build nuclear weapons. Iran denies any such ambitions.

Saudi Arabia, in an effort to persuade Pakistan to abandon the Iran gas pipeline and electricity/oil import deals, was reported to have offered an “Alternative Package” to meet its growing energy needs. In addition, the Arab kingdom was also said to have offered a loan and oil facility to bail Pakistan out of its financial and energy crises.

Sanctions by the West, political chaos and construction delays have slowed its development as an exporter.

India under US Pressure

The project was first mooted in 1994. It was proposed to carry gas through Pakistan to India in a 1,724-mile pipeline. But India, under intense pressure from the United States, backed off in 2009, citing disputes over prices, transportation fees and long-running distrust of Pakistan.

Interest of China

China, ever hungry for energy to fuel its rapidly increasing economy, has indicated that it might sign on and run an extension of the pipeline from Pakistan. China is the main obstacle preventing the United States mustering the U.N. Security Council behind new sanctions on Iran. Sanctions would cut 10-12 % of China’s oil imports and endanger oil contracts worth hundreds of billions of dollars.

China Backed Off

Pakistani and Chinese officials discussed the laying of the gas pipeline from Gwadar to Western China in a meeting, but Chinese firm which offered financing of $500 million for Iran-Pakistan (IP) gas pipeline has pulled out of the project after Pakistan government expressed its unwillingness to extend the bid validity period.

Long Term Benefits

If this project was approved, as part of the economic corridor, Gwadar Port connected through road and rail links to China could help enhancing trade between the two countries. Oil and gas pipelines could feature in the economic corridor, providing much-needed boost to economic activities in insurgency-hit Balochistan.

Progression of Project

According to a senior government official, Pakistan and Iran will start negotiations on provision of funds for the pipeline if the Iranian government gives the nod. Iran has already committed $500 million in loan for laying the pipeline in Pakistan.

Iran has almost completed the pipeline work in its territory, but Pakistan has yet to start construction of 780 kilometers of the pipeline on its side, which is estimated to cost $1.5 billion. Under the deal, 750 million cubic feet of gas will be pumped to Pakistan daily from Iran by mid-2015.

References

  1. http://timesofindia.indiatimes.com/world/pakistan/Iran-Pakistan-gas-pipeline-could-be-extended-to-China/articleshow/22024504.cms
  2. http://www.thenews.com.pk/Todays-News-13-21263-Pakistan-Iran-agree-to-complete-gas-pipeline-in-15-months#sthash.2Rhqy2LL.dpuf
  3. http://www.upi.com/Business_News/Energy-Resources/2010/03/19/Pakistan-gas-pipeline-is-Irans-lifeline/UPI-27741269029633/#ixzz2MI6Ro8yG

Photo: Google.com/images

 

 

Challenges faced by Oil&Gas Industry and their possible solutions

16 September, 2013 News 12 comments
Challenges faced by Oil&Gas Industry and their possible solutions

A number of factors, such as changing geopolitical relationships, the emergence of new competitors, changes in supply and demand dynamics, social and environmental pressures are transforming and reshaping our industry. Among which there is one indisputable fact i.e. Global Demand for energy will continue to increase dramatically, driven in large part by population growth and the strong desire of developing countries to achieve economic prosperity.

Here I have tried to incorporate some of the challenges which are not only critical to our industry, but also to our world.

Health, Safety, Social Responsibility, Environment & Security
Human, environment safety and health protection remains the number one priority for the oil and gas industry. The technique for extracting gas from unconventional reservoirs — hydraulic fracturing— has raised environmental concerns about the water table. So these companies should pay greater attention to HSE issues within broader operations concerns i.e. across the entire span of their activity, from exploration and production, to pipeline management, down to refinery and marketing.

Management and Information
We need collaborative partnerships, alliances, or joint ventures involving oil companies, service companies, governments, and academia, all pooling their knowledge to achieve breakthroughs in the targeted areas in far less time and at lower cost than if everyone goes about it alone. Such collaboration should involve:

  • Integration across upstream, midstream, and downstream
  • Joint investments outside the host country
  • Different commercial terms and risk sharing
  • Greater shared control
  • More technology transfer and development of the local workforce

The People Shortage
One of the main challenges is having sufficient well-trained and capable technical people. However, we can solve this issue by attracting and encouraging more bright young people and “New Majority”—young women and ethnic and minority youth—into the science and engineering disciplines and then into our industry.

The Cost of Services
The other challenge is increased costs for services across the board, from exploration to production and refining of crude to its transportation, including seismic, drilling, deep water horizons and constructions. These are functions of higher commodity prices, which have driven industry activity to a point that exceeds the service industry’s capacity to respond. Capacity is being increased in some areas but larger, more complex, longer-lead-time projects are needed around the world.

Fluctuating Crude Prices
Fluctuation in crude prices has become common due to politics involvement. For example the price went from a high of nearly $150/Barrel in mid-2008 to below $40/Barrel at the beginning of 2009. Slow approval of new capital projects, resultant talent squeeze due to early retirement and acquisition activity were the main reasons for this un-stabilized pricing. So we have to remain operationally effective while maintaining margins within environment.

Economic Uncertainty
Uncertainty in economics is an unknown prospect of gain or loss, whether quantifiable as risk or not and it has a direct impact on employment, income prospects and communication among industries. However, we can overcome it with setting a goal and creating a roadmap detailing how to get there.

Results
Capitalizing on the new interdependencies between senior management information, operational effectiveness, decision-making and the understanding of their impact on profitability can somehow resolve our problems.

The industry is under the influence of global forces such as geopolitical pressures. What supply chain management companies offer their clients facing pressures from geopolitical insecurity is the knowledge, contacts, and skills to adapt.  So Best in class supply chain performance will need to anticipate and react effectively to changes on the global landscape.

References

1. ShermanCpas

2. Google

3. Deloitte

4. IBM

Photos: Pennwell, graph by Mehwish Khanam