Oil Companies Tap New Technologies to Lower Production Costs

The oil industry hasn’t exactly managed to evolve during the last several years. Although big companies in this industry used to be very open to innovation, they eventually stopped using the newest technologies. However, if they didn’t do this, they would be able to constantly reduce production cost, as well as increase productivity and performance. Unfortunately, it took them some time to actually figure this out. Nevertheless, oil companies are now finally starting to adopt new technology at faster paces.

It’s worth mentioning that a lot of the easy oil in the world has been extracted. Because of this, companies have started drilling offshore or deep underground. Of course, this transition is not simple, which is why they’re starting to tap new technologies. While the oil prices were high, companies were focused only on pumping as much oil as possible. Most companies started investing all of their funds into development and exploration, and were doing everything in their power to expand as quickly as possible.

They were only concerned with finding easy areas for extracting petroleum. This proved to be a great decision until other countries became threatened by the growth of the oil and gas industry in the United States and began flooding the market with cheap crude oil. Now that the prices are lower, they had to start thinking about new ways to lower production costs to stay effective. Companies are now only concerned with getting the most oil for the least amount of money.

Refracking

If you know anything about the oil and gas industry, then you probably know what hydraulic fracturing (otherwise known as fracking) is. This is a process that has been around for several decades, and has since been successfully used to extract oil. Since we’re constantly seeing new technologies, certain companies have started experimenting with refracking. This is a process that involves using new hydraulic fracturing technologies to extract oil from wells that have already been fracked in the past.

Apart from refracking, big oil companies began mixing hydraulic fracturing and directional drilling techniques as well. Although directional drilling has also been around for several decades, people have only recently started combining them to effectively extract more petroleum. Of course, combining them was made possible thanks to the advancements made in both of these techniques. Apart from improving these techniques, the oil industry has also started using better electronic devices. Nowadays, there are ultrasonic flow meters that offer unparalleled precision, which definitely plays a role in smarter drilling.

Big Data

Instead of focusing on extracting as much oil as possible in a small time frame, companies are now carefully considering when and where to drill. Because the oil prices are not as high as they once were, sometimes it’s not even worth it. In order to find sweet spots for drilling, companies have started using big data processing tools to analyze the enormous amount of data they receive constantly. One of the most common ways they get this data is by using seismic waves.

People essentially send these waves into the Earth, and the sensors they place on the surface pick them up once they bounce back. The data that these sensors pick up can then by analyzed and transformed into three-dimensional maps, which allows the workers to decide where to drill.

Big Companies are Automating

It is believed that automation is going to eventually lead to extremely low production costs. Right now, experts are working on analyzing all of the data they can get in order to figure out how to properly automatize the whole process. Some think that fields will be completely automated one day and that there won’t be a lot of oil and gas workers. Automation will not only reduce the production cost, but it will also reduce the number of people exposed to hazards associated with extracting oil.

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    Greg Stiles

    Covering the Southern Oregon business and economy since 2001. Read Full
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