01/22/2015 | As Oil Prices Continue to Deteriorate, Strategic Efficiency Moves Can Help Save
It’s hard for anyone in the general public—let alone the oil and gas industry—to ignore the news about falling oil prices. Between the explosion of development in the U.S. and the availability of more efficient extraction technologies, oil production is up considerably on a global scale. Even though consumption is also rising in many countries, it cannot keep up with supply. As a consequence, oil has fallen below $60 a barrel, causing some economists to predict a short-term oil production disaster.
The basis for this prediction is that the break-even point for many North Sea producers is $80 a barrel. For U.S. and Canadian producers, the number can be even higher. Saudi Arabia and Russia have both announced they will not reduce production (extraction in Saudi Arabia is profitable to $30 a barrel). In doing so, they have put firms with higher operating expenses over a barrel (no pun intended).
Goldman Sachs recently suggested $930 billion worth of petroleum projects, worldwide, may be put on hold next year. In some of the more mature oilfields, closure is a possibility. Many petroleum firms caught between these extremes—those with active, potentially unprofitable projects—are exploring whether they can tighten their belts and ride the crisis out.
At HIPOWER SYSTEMS, we speak nearly daily with oil exploration and production firms that are seeking to do just that. They are implementing technologies, such as the use of large well pads that can stage multiple wells, that take advantage of economies of scale and reduce overhead expenses. With a multi-well pad, companies build fewer roads, can often reduce staff and centralize man camps, and can implement power generation and power distribution systems that are cost effective and flexible.
One beneficial solution is a parallel generator configuration, which at a multi-well pad site can supplant the more traditional layout where each pump jack has its own generator. In such a solution, up to 32 natural gas generators and/or diesel generators can be daisy-chained together, and each can be operated—or shut down—by a single controller.
This lets operators leverage fewer generators to greater advantage. For example, the operator could use two generators from the configuration to power a pump jack during the power-intensive well break-in period, but then drop back to using only one once the well is producing, leaving the second one free for other tasks.
Using such an approach, producers enjoy more flexibility and power options from a smaller number of generators, overall. Service and maintenance are also made simpler, and generators can be shut down periodically on a rotating basis if the firm is halting production or drilling for one or more wells and less power is required.
This is just one example of the many efficiencies that petroleum producers can implement to reduce operating costs. Where once the focus was on increasing efficiency to maximize production, it is now shifting to achieving efficiency to save jobs and the company’s bottom line. No matter the reasons, HIPOWER SYSTEMS has always been committed to efficiency and lean operation, and we continue to work with our customers in this regard.
To learn more about parallel configurations or any of the many ways in which HIPOWER SYSTEMS generators increase operating efficiency, please call us at 913-495-5557. We also invite you to browse our site and sign up for myHIPOWER to gain access to extended site benefits.
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