The downstream refining business has off late become very complex owing to the new challenges that refiners face in terms of the quality of feedstock available, growing need to produce clean fuels, demand and price volatility, process integration &inter-convertibility and hydrogen management. Refiners need to be more agile and be able to quickly adapt to innovative trends in process technology to stay competitive in the market.
Starting mid-2014, refiners world-wide have seen a constant dip in crude oil prices owing to Saudi Arabia’s consistent efforts to knock out the stable US Shale oil production, lackluster demand growth from weakened economies in China, Japan and Europe and the much awaited interest rate hike by the US federal reserve bank. So, what should be the top strategies of refiners who are net importers of crude oil to squeeze the best out of the currentmarket conditions?

Refiners are under constant pressure to increase refining margins by reducing inventory and product quality giveaways whilst producing higher grades adhering to tighter product and environmental specifications.

The operation and management of the Off-site Oil Movement and Storage (OM&S) shall be of vital importance in context of the economics and profitability of a refinery.  Typically neglected over many years, OM&S systems tend to have only basic instrumentation and their operation is by-and-large manpower-intensive.

In current tough O&G market situation, every cent matters. Top Management have been emphasising strongly on “Effective Inventory Management and Scheduling” and refiners in-turn are striving hard to get the levels right by:

  • Providing visibility into future demand and inventory levels, enabling the company to take advantage of supply/demand disruptions while minimizing working capital
  • Integrating refinery scheduling with distribution scheduling, yielding feasible and achievable schedules
  • Reducing transportation and demurrage costs through realistic distribution schedules
  • Facilitating deal actualization and contract reconciliation
  • Enabling visibility into supply and trading positions
  • Facilitating best-practice supply chain planning by connecting demand forecasters, refinery schedulers, distribution schedulers, traders and operations personnel

Seismic-while-drilling is a niche technique of using drill bit noise as a source for acquiring real time vertical seismic profile of the onshore and offshore wells through receivers laid out along the ground or seabed. Over the last two decades, this technique has attracted many operators exploring geological complex areas.

Understanding Extended Reach Drilling

Extended Reach Drilling (ERD) is a type of directional drilling where horizontal section is very long compared to vertical length of the well. In general the ratio of measured depth (MD) and true vertical depth (TVD) of extended reach wells is higher than 2.0. Through ERD the operators aims to reach larger length of the well from one drilling location and keep the well in the reservoir for a longer distance to maximise productivity. ERD show the utmost use of current technology advancements and precision of drilling a well. Wells are drilled to the target depth as per the drilling program. Extended reach drilling can be done on the new well or it can be done on the well which is already producing. Extended-reach wells are expensive and technically challenging thus planning for ERD is a very important step.

Artificial lift is a process used in Oil or Gas wells to increase pressure within the reservoir and facilitate hydrocarbon fluid to flow to the surface. Artificial lift is employed for uninterrupted flow of hydrocarbon when the natural drive of fluid flow in the reservoir is not strong enough to push the liquid or gas to the surface.

Opening Remark

Production of hydrocarbon fluid from geological formation depends on two main factors i.e. uninterrupted flow (highly permeable rock) and a clean wellbore with intact formation. However, in most of the situations , it is very difficult to encounter both the situations in ideal conditions. As a result, an artificial production stimulation technique such as hydraulic fracturing is required to be applied to enhance the release of the liquid and to maximize the life of the well. Currently, nine out of 10 natural gas wells in the United States are artificially stimulated through hydraulic fracturing. . Today’s oil and gas industry has become heavily dependent on the hydraulic fracturing process as an enhanced hydrocarbon recovering process. Because of its extensive use, it has also become a threat to the environment.

With the growing demand for hydrocarbons in the last 10-15 years there is a major shift in the oil industry where vertical wells have been replaced mostly by highly deviated or horizontal wells. While drilling horizontal wells, accurate and proper placement has become very important as operators are constantly looking for maximum contacts in the reservoir. This has resulted in more reliant and optimized Geosteering operation. Currently about 95% of all horizontal wells in the world are being geosteered. Optimal geosteering is accomplished by selecting the proper combination of logging-while-drilling (LWD) and measurement-while-drilling (MWD) tools as data acquired from these tools are directly deployed for interpreting and monitoring the well.

In Petroleum refining world, crude oil cost accounts to around 90% of the overall expenditure incurred. Therefore, knowing what crude is worth and how to run it in a refinery begins with a good “Assay”.

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