As was the case in Houston for this year’s CERA Week, many are asking the question: How long will the price of oil remain at its current low level?
My honest answer is: I wish I knew. No one can accurately predict when oil prices will rise or fall.
What we do know, at Siemens, is that we can help our oil and gas customers remain competitive in this difficult market. We can’t make oil prices go up, but we can make operating costs go down. And as it turns out, there are a lot of reasons – outside of low oil prices – that lowering costs is in fact a long-term necessity.
Oil and gas companies, in addition to the price situation, are confronting rising project and operational costs, challenges tied to developing unconventional resources, environmental and safety risks, as well as a host of other concerns.
A new, bigger portfolio
At Siemens, we have the largest mission critical portfolio that offers a dependable range of products, solutions and services for a variety of applications along the entire O&G value chain. With the recent acquisitions of Dresser-Rand and Rolls Royce Energy’s gas turbine product line, no company is better positioned to help oil and gas firms bolster safety, increase productivity and reliability, and maximize capital efficiency – from wellhead to refinery.
Our expanded product portfolio and global footprint means we are present everywhere our customers need us.
How we are helping our customers
Siemens has long been known for driving technological innovation and we are harnessing this capability to find new ways to reduce cost and create greater value for our customers.
The approach we are taking is focused on three areas – electrification, automation, and digitalization.
It’s a strategy we’ve successfully applied in other industries. Siemens’ manufacturing partners, for example, have become leaders in their fields by harnessing state-of-the-art electrification and automation technologies, giving rise to the digital factory. Now, in the oil and gas space, Siemens is both providing high quality, space-optimized modular solutions and supporting the development of the digital oilfield.
Our electrification efforts are helping customers reduce emissions and limit the environmental impact of their operations. Our automation solutions, in turn, are driving productivity and improving operational safety by welcoming a new generation of intelligent blow-out preventers that enable continuous monitoring and customized decision-making programs.
In the digital arena, Siemens again brings an expansive set of solutions, including advanced data analytics that can convert large amounts of data to useable information in real time. These tools lead to smarter decision making, which ultimately results in reduced lifecycle and project costs.
Our R&D efforts, meanwhile, are leading us to even bolder solutions in the near future.
The future of offshore oil and gas
Offshore oil and gas platforms have become exceedingly expensive. A recent McKinsey & Company analysis found that the cost of offshore wells has grown up to 250 percent since 2007, with the increase driven by two significant factors.
First, the movement towards deeper seas is requiring more expensive setups. Second, up to 75 percent of the cost increase is attached to process inefficiencies that are creating more slowdowns and shutdowns.
In the next several years, Siemens will offer solutions that will enable more continuous and reliable deep water operations, nearly two miles below the surface of the sea.
These new ocean floor platforms will enable companies to take advantage of production sites that are less prone to faults and more cost-efficient than conventional systems, as we move ever closer to automated, maintenance-free oil fields that operate with less intervention.
The race is on, then, for oil and gas companies to fully embrace the next wave of technology, equipment, and solutions – especially in this low-price environment, but not exclusively.