Late last month, the U.S. Energy Information Administration highlighted that U.S. crude oil production had increased to an average 2.8 million barrels per day from January 2019 through the month of July. And the United States has been shipping that crude oil to more and more places around the world. In fact, since earlier this year, the United States is now exporting oil to more countries than it is importing from.
A decade ago, the United States imported oil from up to 37 different sources per month. This year, the maximum number of import sources is 27 per month, while U.S. exports shipped to up to 31 destinations per month.
Global demand for light sweet crude is growing, according to EIA, due to increasing national and international restrictions on sulfur in transportation fuels. And most of the increase of U.S. production is relatively light sweet crude.
Diverse sources of supply to global oil markets enhance their resilience to shocks. We saw this after the September attacks on Saudi oil facilities. Swift action by Saudi Aramco to restore oil flows and a more resilient market thanks, in part, to growth in U.S. production, resulted in a relatively muted oil price response.
And yet, while average daily production has gone up this year, when you look at a chart of production volumes, U.S. production looks pretty flat for most of 2019.
Producers are feeling the pinch: they’ve got to drill ever more wells to stay ahead of their production declines. Increased production is weighing on crude oil prices – you get the benefit of this supply in resilient markets, but it is shrinking margins and available cashflow to fund this drilling. And at the same time, the financial community is pulling back, restricting access to capital.
The industry is reshaping itself yet again in response to new market realities, looking for new ideas and better approaches and operating models.
Equipping You with the Tools and Techniques
Later this month, AAPG will host a Geosciences Technology Workshop in Houston designed to support this thinking entitled, “Success with Difficult Unconventionals.”
Scheduled for Nov. 12-13 at the Westin Memorial City Hotel, the GTW will cover eight primary topics:
- How digitalization is being implemented now to improve decline curves
- Smart drilling and completions
- Optimized hydraulic fracturing
- New primary and enhanced recovery techniques and chemicals
- New sensors resulting in better safety and environmental control
- Machine learning and deep learning for predicting flow and equipment failure
- Avoiding hydraulic fracturing interference
- How Internet of Things technologies are being applied in the oil field
Our sincere thanks to the organizing committee, including:
- Jenna Robertson, Thru Tubing Solutions
- Patrick Ng, Real Core Energy
- Alex Burns, Baker Hughes
- Haibin Xu, Shell
- Giewee Hammond, Aramco Services
- Mark Erogbogbo, Effort Energy
- Godswill Nwankwo, Effort Energy
- Susan Nash, AAPG’s director of innovation, science and emerging technologies.
These folks have worked to develop a program that will tackle the many and varied issues confronting E&P companies today in the unconventional resources space. Organized in eight themes, the GTW will include a mixture of presentations and then expert panel discussions to engage the participants and presenters on the topics.
During the networking reception at the end of Day 1, we’ll also have a U-Pitch Technology Showcase with companies developing and commercializing new technologies given two minutes to pitch their ideas.
Ensuring ample global crude oil supplies is a critical factor in maintaining resilient oil markets. Improving recovery, gaining greater efficiencies, and smartly deploying technology to commercially produce crude oil is our challenge. Difficult reservoirs are our future.
What are the tools and techniques that will equip us to compete successfully? How does the industry need to reshape itself to compete in the current, ever-changing market environment?
It’s going to be people like you, at events like this GTW, where the beginning of an answer may emerge. Join us in Houston, Nov. 12-13 for “Success with Difficult Unconventionals” and you’ll be able to say that you were there.
Meeting the World’s Need
As here in the United States we approach the Thanksgiving holiday – a time set aside to reflect on the many blessings for which we should be grateful – I’m setting aside time to articulate the things that are meaningful in my life, to actually write them down.
One of the things I’m thankful for is the opportunity to work with you, as AAPG members, to contribute to our joint mission to supplying the bulk of the world’s energy needs, both today and into the future.
Whenever I have a tough day at the office, I remind myself of that fact. Our individual contributions are of varying magnitude, but we’re all contributing, we’re all working together to meet this objective – and that’s pretty cool.