In a volatile trading environment, how do you make money from your oil and gas assets? Firstly, the assets need to be available but, even more importantly, they must be available at the right time. If both of these things happen, owners of these assets have a much better chance of maximizing their returns.
The current climate is most certainly volatile. Coming hard on the heels of the global Covid-19 pandemic, the Russia-Ukraine conflict led to a huge jump in oil prices, which recently peaked at more than $120 a barrel – the highest for a decade.
Meanwhile, wholesale gas prices soared to record levels. In the British gas market, the contract for immediate delivery rose to almost 200 pence per therm in April, while the contract for weekend delivery topped 180 pence per therm.
To a large extent, the high prices have been driven by concerns about security of energy supplies caused by the Ukraine crisis. Europe relies on Russia for around two fifths of its gas imports so there are fears that supplies will be hugely disrupted, either if Russia cuts off supplies to Europe or European countries choose not to purchase Russian gas.
Due to the interconnected nature of global energy markets, Russia is hugely important to anyone who owns oil or gas assets around the world. After all, Russia is the world’s second largest oil exporter and second biggest producer of natural gas.
So, what can oil and gas plant owners do to ride the wave of volatility and maximize the value of their assets?
As stated above, they must be able to generate at the right time to make money from their assets. For this to happen, the asset must be working efficiently at the right time, and any potential defects must be identified early to give the best chance of being available when the market is booming. Any assets that are hit with foreseen problems in the current market are missing out.
Technology can give a great advantage in achieving this. Artificial intelligence (AI), for example, can unravel several difficulties inherent in running oil and gas plants. This, in turn, can reduce the time needed to take action to rectify the problems.
Imperfection detection and enhancing quality assurance
One of the difficulties in the oil and gas industry is how to distinguish defects or imperfections in components that have a tendency to malfunction. These imperfections can be time-consuming to identify and costly to repair. A malfunctioning item identified early enables the operator to plan when to maintain making an intervention more efficient and making the most of availability when the market is good. AI-controlled defect detection arrangements are practical and are amazingly efficient in comparison to standard, human-driven quality assurance cycles.
Make better decisions with analytics
Oil and gas organizations manage lots of information derived from the operational performance of dozens of pieces of equipment. However, due to an absence of appropriate technology, they’re often not able to profit from the tons of data that rest in information storehouses.
Organizations can use specialist researchers to break down and analyze data on equipment performance – yet this is a time-consuming and costly exercise and no human can capture all of the information created in a solitary day of activities.
AI algorithms study many data streams from various sensors and plant machinery, and can capture the performance of an entire network of equipment, all in real time. The technology can then convert this information to generate intelligent suggestions/ calls to action based on specific business needs. These deep insights enable geoscientists to have better visibility of the overall processes and operations of the plant or network of plants.
Using AI to investigate the performance of oil and gas assets can pinpoint equipment defects and provide information to fit equipment availability to the market. This can help these assets to perform far more efficiently and gives them a much greater chance of being available at the right time, helping owners of these assets to maximize their profits.
Andrew Normand is UptimeAI partnership lead for Encora Energy. With more than 15 years’ professional experience and an extensive global background in technical/ management consulting and operations-based engineering, Andrew is currently driving forward Encora Energy’s roll-out of UptimeAI’s pioneering technology in the UK and Europe. UptimeAI can increase process system productivity by 20 percent, availability by ten percent and efficiency by five percent, and reduce maintenance costs by 30 percent.
For further information please visit: www.encora.energy