It’s been dubbed the biggest downturn in a generation, but the oil industry is set to green-light more than double the projects that have been approved in the past, shaking off the effects of years’ worth of slump that bankrupted some companies and forced others into survival mode. U.S. shale operators will increase spending on oil exploration by 3% — bringing the industry investments to $450 billion. Rising oil prices from an OPEC cut in production has many rushing to get projects off the ground again.
The most expensive projects are those located in deep waters, which account for about a third of the projects under development. Since many companies in this field green-light their projects based a definition of break-even costs related to costs-per-barrel, having a good rate of return is top priority before launching into what could be a potentially very expensive venture. This is where working with innovative and cost-effective equipment becomes so critical to an industry with a regular feast-or-famine cycle.
For example, the custody transfer process needs to be replicable and accurate in order to ensure that crude oil sampling is consistent. This is the source of a lot of revenue loss, and it can be halted with innovative products like a Komax Custody Transfer Static Mixer. Considered industry standard, products like these not only create accuracy, but they sharpen profits in an industry that needs to watch every penny sometimes just for survival.
While industry experts remain cautiously optimistic, so do producers. Spending is expected to grow by well over 20% for onshore projects here in the United States; but the rest of the world is hedging their bets at the moment. The time is right for brave companies to leap in and take advantage of the turn in the cycle. Find out how Komax can sharpen your edge in the industry.