Global oil and gas sector is operating in an environment of unparalleled opportunity coupled with dynamism and volatility. In today’s world companies are looking for ways to create a sustainable cost-efficient model of operation. This model should be targeted to meet the challenges of the oil and gas industry, which includes margin pressure, cost competition, supply-chain issues, manpower shortage, global competition, technological advancements, and asset reliability. The good news here is, there is a solution within our reach that has immense untapped potential. Let us understand how Information technology can be leveraged in the oil and gas industry for greater benefit and sustainability.
What Is trending in Information Technology?
There are numerous technological advancements that are governing the oil and gas industry and are referred to as the drivers of the sector, these include:
Big data management - The use of automation and information technology resulting in the creation of volumes of data. This is then categorized and analyzed to create insightful information that helps in better decision-making.
Cloud computing - Cloud computing enables the oil companies to store and access a large volume of data. It allows seamless data management and computing across the organization.
IoT and SCADA (Supervisory Control and Data Acquisition) architecture - Industrial Internet of Things and SCADA help the operational process of oil and gas industry by merging it with information technology. The IT interface provides broad operational insights that help in optimizing the operational process. It can also enhance the cost efficiency and productivity.
Digital Oil-field- The sensors in pumps and well-heads create numerous data, both internally and externally. With the advent of information technology, this data is monitored and analyzed to create a digitally integrated oil value chain.
However, it is important that the oil and gas sector should adopt new IT practices to make them future-ready. The focus should not be just on data analysis via sensors but rather it should start addressing the entire E&P value chain and foray into complete automation. Until now the data collected and analyzed has been used to detect anomalies but now the time is right to optimize the resources and predict the future course.
How and where can IT be used in the oil and gas industry?
The important IT concepts like Big Data and analytics, IoT and SCADA can be used effectively in various areas of oil and gas industry, here are some of the applications:
Preventive maintenance of critical components
The real-time operational data derived from various critical components can help in setting a benchmark of quality parameters. The IT system will detect any deviation from the expected baseline and will alert the operational division to take prompt action. This system can be centralized such that the information available is real-time and accurate to plan preventive maintenance on time. This will help in reducing the maintenance cost and will avoid any hindrance in productivity.
By analyzing the historical data and real-time data from the well site, the drilling managers can discover the best performing wells. The current site location and its characteristics will be matched to the existing well site information to diagnose the right location for drilling, the rate of penetration and the expected issues that the team might encounter. This will help in better planning and execution.
With the integration of digital application, the oil companies have significantly increased the limit of the reservoir. Which resulted in a decrease in upstream and downstream capital expenditure along with additional ancillary benefits. Some oil and gas companies are using 4-D seismic imaging to add a time-lapse dimension to traditional 3-D imaging which enables them to measure and forecast fluid changes in reservoirs. This enhanced view of reservoirs typically increases the recovery rate by boosting upstream revenue.
Intuitive marketing and distribution
Retailers and marketers in other industries have successfully implemented digital technologies to understand consumer psychology for better positioning and marketing of their products and services. They also use this data to optimize pricing strategies, supply chain management, and product improvement. Oil companies have successfully replicated the result in the industry. With the help of geospatial analytics, the logistics department of the oil and gas company can efficiently manage the supply and distribution networks through location planning and route optimization.
Informed decision making
The availability of a large amount of detailed real-time data categorized into various formats can help the management and stakeholders to understand the performance and problems with each segment. It enables them to make informed decisions to maximize productivity and performance.
Recruitment and talent management
Technology has completely transformed the talent acquisition, management, and retention process. The oil companies can use digital platforms like NrgEdge.com to advertise their job openings and reach out to potential candidates. They can conduct screening tests, background checks, telephonic or video interviews for hiring suitable candidates. Additionally, they can also manage and monitor the performance of the employees via dedicated platforms. Even the on-job training can be conducted to upskill the existing employees through audio/video interface and via augmented or virtual reality like simulators. Oil and gas companies require highly skilled professionals, Information technology allows them to fix the skill, talent and knowledge gap efficiently.
It’s time for the oil and gas companies to reinvent themselves by investing in digital technologies. With the right application of big data and analytics, the oil and gas industry can be immensely benefitted. It can help optimize performance, predict breakdowns, streamline maintenance work, and help in better and informed decision making. This will result in higher productivity, enhanced operational activity, reduction in downtime and wastage which means higher profitability and sustainability.
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Headline crude prices for the week beginning 15 October 2018 – Brent: US$81/b; WTI: US$71/b
Headlines of the week
Less than two weeks ago, the VLCC Navarin arrived at Tanjung Pengerang, at the southern end of Peninsular Malaysia. It was carrying two million barrels of crude oil, split equally between Saudi Arab Medium and Iraqi Basra Light grades.
The RAPID refinery in Johor. An equal joint partnership between Malaysia’s Petronas and Saudi Aramco whose 300 kb/d mega refinery is nearing completion. Once questioned for its economic viability, RAPID is now scheduled to start up in early 2019, entering a market that is still booming and in demand of the higher quality, Euro IV and Euro V level fuels RAPID will produce.
Beyond fuel products, RAPID will also have massive petrochemical capacity. Meant to come on online at a later date, RAPID will have a collective capacity of some 7.7 million tons per annum of differentiated and specialty chemicals, including 3 mtpa of propylene. To be completed in stages, Petronas nonetheless projects that it will add some 3.3 million tons of petrochemicals to the Asia market by the end of next year. That’s blockbuster numbers, and it will elevate Petronas’ stature in downstream, bringing more international appeal to a refining network previously focused mainly on Malaysia. For its partner Saudi Aramco, RAPID is part of a multi-pronged strategy of investing mega refineries in key parts of the world, to diversify its business and ensure demand for its crude flows as it edges towards an IPO.
RAPID won’t be alone. Vietnam’s second refinery – the 200 kb/d Nghi Son – has finally started up this year after multiple delays. And in the same timeframe as RAPID, the Zhejiang refinery by Rongsheng Petro Chemical and the Dalian refinery by Hengli Petrochemical in China are both due to start up. At 400 kb/d each, that could add 1.1 mmb/d of new refining capacity in Asia within 1H19. And there’s more coming. Hengli’s Pulau Muara Besar project in Brunei is also aiming for a 2019 start, potentially adding another 175 kb/d of capacity. And just like RAPID, each of these new or recent projects has substantial petrochemical capacity planned.
That’s okay for now, since demand remains strong. But the danger is that this could all unravel. With American sanctions on Iran due to kick in November, even existing refineries are fleeing from contributing to Tehran in favour of other crude grades. The new refineries will be entering a tight market that could become even tighter. RAPID can rely on Saudi Arabia and Nghi Son can depend on Kuwait, both the Chinese projects are having to scramble to find alternate supplies for their designed diet of heavy sour crude. This race to find supplies has already sent Brent prices to four-year highs, and most in the industry are already predicting that crude oil prices will rise to US$100/b by the year’s end. At prices like this, demand destruction begins and the current massive growth – fuelled by cheap oil prices – could come to an end. The market can rapidly change again, and by the end of this decade, Asia could be swirling with far more oil products that it can handle.
Upcoming and recent Asia refineries:
Headline crude prices for the week beginning 8 October 2018 – Brent: US$84/b; WTI: US$74/b
Headlines of the week
Source: U.S. Energy Information Administration, Monthly Crude Oil and Natural Gas Production
As domestic production continues to increase, the average density of crude oil produced in the United States continues to become lighter. The average API gravity—a measure of a crude oil’s density where higher numbers mean lower density—of U.S. crude oil increased in 2017 and through the first six months of 2018. Crude oil production with an API gravity greater than 40 degrees grew by 310,000 barrels per day (b/d) to more than 4.6 million b/d in 2017. This increase represents 53% of total Lower 48 production in 2017, an increase from 50% in 2015, the earliest year for which EIA has oil production data by API gravity.
API gravity is measured as the inverse of the density of a petroleum liquid relative to water. The higher the API gravity, the lower the density of the petroleum liquid, meaning lighter oils have higher API gravities. The increase in light crude oil production is the result of the growth in crude oil production from tight formations enabled by improvements in horizontal drilling and hydraulic fracturing.
Along with sulfur content, API gravity determines the type of processing needed to refine crude oil into fuel and other petroleum products, all of which factor into refineries’ profits. Overall U.S. refining capacity is geared toward a diverse range of crude oil inputs, so it can be uneconomic to run some refineries solely on light crude oil. Conversely, it is impossible to run some refineries on heavy crude oil without producing significant quantities of low-valued heavy products such as residual fuel.
Source: U.S. Energy Information Administration, Monthly Crude Oil and Natural Gas Production
API gravity can differ greatly by production area. For example, oil produced in Texas—the largest crude oil-producing state—has a relatively broad distribution of API gravities with most production ranging from 30 to 50 degrees API. However, crude oil with API gravity of 40 to 50 degrees accounted for the largest share of Texas production, at 55%, in 2017. This category was also the fastest growing, reaching 1.9 million b/d, driven by increasing production in the tight oil plays of the Permian and Eagle Ford.
Oil produced in North Dakota’s Bakken formation also tends to be less dense and lighter. About 90% of North Dakota’s 2017 crude oil production had an API gravity of 40 to 50 degrees. The oil coming from the Federal Gulf of Mexico (GOM) tends to be more dense and heavier. More than 34% of the crude oil produced in the GOM in 2017 had an API gravity of lower than 30 degrees and 65% had an API gravity of 30 to 40 degrees.
In contrast to the increasing production of light crude oil in the United States, imported crude oil continues to be heavier. In 2017, 7.6 million b/d (96%) of imported crude oil had an API gravity of 40 or below, compared with 4.2 million b/d (48%) of domestic production.
EIA collects API gravity production data by state in the monthly crude oil and natural gas production report as well as crude oil quality by company level imports to better inform analysis of refinery inputs and utilization, crude oil trade, and regional crude oil pricing. API gravity is also projected to continue changing: EIA’s Annual Energy Outlook 2018 Reference case projects that U.S. oil production from tight formations will continue to increase in the coming decades.
The oil and gas industry offers lucrative career opportunities. Internet job boards have made the task easier for employers and job seekers. Companies today receive numerous applications that need screening to filter out substandard candidates. Telephonic interview is usually the first step in the recruitment process. It is used for both pre-screening and post-interview to acquire talented professionals. In cases where a candidate resides out-of-town, the complete job interview can be conducted over the telephone or via an audio-visual aid.
Job seekers usually get tensed about the telephonic interview because they feel they will not be able to express themselves better and might be less impressive. There is also a category of job seekers who take telephonic interviews casually. However, the importance of telephonic interviews cannot be ruled out and yes, we agree it is tricky to impress an interviewer over a call. But if you follow the tips below, you will certainly be successful in your attempt.
Purpose of the telephonic interview
Before you begin your preparation for the telephonic interview, it is important to analyze the purpose of the interview, which can be:
Once you are aware of the purpose of the interview, you can plan and prepare better.
Schedule your call
Telephonic interviews are scheduled based on a mutually agreed date and time. So, make sure if the interviewer asks you for an available time slot, you provide a time where you will not be interrupted by background noises, family, friends or colleagues. However, if the interviewer shares his time slot and you are not comfortable with it, you should request for rescheduling to a later time or date. Even if you receive an unplanned call for an interview, you can politely request to reschedule.
Preparation for the call
Once you know the purpose and timings of the interview, you must start with the preparation for the interview. Here is what you can do:
Cut out all distractions before the call
Make sure you are not distracted by your surroundings. So, switch off the TV and other audio/visual devices. Look for a quiet spot where you do not get disturbed. Create a comfortable setup and have your notes, resume and job description nearby for easy access. Remember, the interviewer can easily detect your distraction if you are delaying your responses or are not responding in an expected way. So, don’t ruin your chances by not focussing.
When making or answering a call
If you are expecting a call from the interviewer, be ready and wait for the call. Make sure you are seated comfortably at the position pre-decided by you and you have all the necessary documents along with a notepad. When you receive a call start the conversation by introducing yourself. However, if the interviewer expects you to call, make sure you call on time, introduce yourself and explain the reason for your call.
During the Interview Call
This is your time to shine. During your interview call, you’ll have to be well prepared with your answers. Here is how you can up your chances:
Before you hang-up
During an interview, it is always the interviewer who must signal that the call is over. Until you get the hint, do not rush. Once the interview is over, the interviewer will ask you for any final questions. This is your chance to clarify any doubts that you may have regarding the company, your position, job role and so on. Ask relevant questions. Try to avoid talking or negotiating your salary over the call. Meet in person to do the needful.
Follow up after the call
As soon as you wind up the call, send a thank you note by email. If the interviewer has provided any dates for the results, consider following up. Even if you do not receive a call after a week, you may shoot a quick email enquiring about the process and update.
The success of your telephonic interview depends on your preparation and the above tips. If you have not qualified despite being good in the interview, then you might not be suitable for the job role. You must keep looking at relevant job openings at a dedicated site like Nrgedge for oil and gas related opportunities.