The latest international survey of the offshore oil and gas sector reminds the industry of some of its worst ills that have only been exacerbated by the current low-price environment.
According to work done by Barney Parson Associates based in the U.K., the low oil price has put client/supplier relationships under strain at a time when greater cooperation - with the requisite higher level of trust - is required to reduce costs.
Some other familiar points include the need for more standardisation; a continued drive for new technology, but with faster implementation; and cutting back on R&D work and maintenance of ageing facilities will be counter-productive in the long term. The key areas for R&D focus are subsea boosting and pumping, flow assurance and HP/HT technology.
A closer look at the study gleaned some interesting points. More than half of suppliers believed that they would benefit for ‘independent evaluation’ of their customers’ opinion on how they perform. While better cooperation, more technology and standardisation are seen as the top three issues to reduce costs, the fourth, somewhat surprisingly, is more competition.
And where should the cost reduction come from? Reduced rig and vessel rates were at the top of the list, but the downturn has already brought prices down. Lower cost for subsea hardware is another, but how does this match with the need for new technology, notably in the hp/ht area. And the third is ‘life of field’ expenditure. This can only come from operators when they can convince development teams that operations are part of the same company and spending money upfront, even if it impacts on development capex, is a good thing.
As for new technology, subsea processing plus boosting are at the top of the agenda along with EOR and riserless light well intervention. Very encouraging for subsea technology developers, but this sounds like a wish list from big operators. There is considerable technology already in the market which remains under-utilised, because many small and medium sized operators are either afraid or simply want to do things as before. So what else is new?
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