Recent news showing oil profits dropping to the lowest point in 13 years coupled with Exxon Mobil’s disclosure that its deepest reserve cuts in modern history led to the loss of $16 billion in value of oil-sands investments and other assets.  The energy sector is very familiar with the wild ups and downs of production and cuts, but even so, many are concerned that fields are going to become mathematically impossible to turn profit.  The concern is particularly keen in North America, where the Kearl oil-sands development accounted for most of the rout in profit.  With reserves at their lowest since 1997, many in the industry are taking a close and thoughtful look at the opportunities in the months ahead.

Several key facts must temper the conversation.  First, the Canadian oil field in question is one of the most difficult and costly projects to develop, because the raw bitumen must be converted into a thick, synthetic crude oil.  Further, these reductions are also offset by new reserves and investments elsewhere in the world, such as Indonesia, Norway and places inside the United States.  Reserves are considered an indicator of future cash flow, so big reductions wipe out wealth.

When the product becomes costly to extract, it is critical to make sure the processes involved with extraction are as efficient and cost effective as possible.  Bitumen froth with an inline steam heater, for example, offers as much as 20 – 25% more energy savings over other types of heaters.  Similarly, working in tandem with a company like Komex to design a process that fits your specific situation in terms of pipeline, gland wash and other needs can ensure that you get a customized solution that is not only efficient, but cost effective.  In a volatile industry, every innovation and cost saving measure makes a difference.