Can technology revive offshore oil?

The appetite to invest in new offshore oil projects has been languishing, due to fears over the energy transition, a preference for share-buybacks, and intensifying competition from short-cycle shale. So can technology revive offshore and deep-water? This note outlines our ‘top twenty’ opportunities. They can double deep-water NPVs, add c4-5% to IRRs and improve oil price break-evens by $15-20/bbl.

Offshore Economics: the Impact of Technology

This data-file quantifies the impact that technology can have on offshore economics. We start with a 250-line field model, for a typical offshore oil and gas project. We then list our “top twenty” offshore technologies, which can improve the economics. In a third tab, we update our base case model, line-by-line, to reflect these twenty technologies. Finally, the “before” and the “after” are compared and contrasted.

Thermo-Plastic Composite: The Future of Risers?

We have estimated the costs of a subsea riser system, for a typical deep-water project; and the potential cost-reduction that can be achieved by using ThermoPlastic Composite Pipe instead (e.g., Airborne, Magma). Savings should be around c45%, or c$20M/riser. Our data-file also includes the order-history to-date for TCP: by project, operator, and geography (below).

Turn the Plastic Back into Oil

Due to the limitations of mechanical recycling, 85% of the world’s plastic is incinerated, dumped into landfill, or worst of all, ends up in the oceans. An alternative, plastic pyrolysis, is on the cusp of commercialisation. We have assessed twenty technology solutions. This nascent opportunity can turn plastic back into oil, generate >30% IRRs on investment, and could displace 15Mbpd of future oil demand.

How could plastic-recycling technology impact oil demand?

We see potential for plastic-recycling technologies to displace 15Mbpd of potential oil demand growth (i.e., naphtha, LPGs and ethane) by 2060, compared to a business-as-usual scenario of demand growth. In a more extreme case, oil demand for conventional plastics could halve. This simple model allows you to vary the input assumptions and derive your own outputs.

U.S. Shale: Winner Takes All?

Shale is a ‘tech’ industry. And the technology is improving at a remarkable pace. But Permian technology is improving faster than anywhere else. These are our conclusions after reviewing 300 technical papers from 2018. We address whether the Permian will therefore dominate future supply growth.

Production Losses at a Giant Offshore Oilfield

This data-file breaks down the production losses at a giant offshore oilfield, across five categories and ten sub-categories. They are addressable with digital oilfield technologies, as shown by our notes. Advanced algorithms such as BP’s Apex solution, are capable of reducing the losses — particularly in the largest categories. Halving them could increase output by c55kbpd.

Where is oil industry R&D focused?

Shale comprises c5% of global supply and c20% of global R&D; while offshore comprises c30% of global supply, but <10% of global R&D, according to our estimates. This simple file aims to break down the oil and gas industry’s R&D activities, by category and sub-category, based on the >1,000 patents and >300 SPE papers we have categorized so far.

Copyright: Thunder Said Energy, 2022.