Oil price pressure raises bar for oilfield minerals

• Autores: Industrial Minerals
• Localización: Industrial Minerals, ISSN 0019-8544, Nº. 594, 2017 (Ejemplar dedicado a: Junio)
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • Weak oil prices since 2014 have spurred one of the sharpest cost-cutting drives ever seen in the global energy industry, with oilfield mineral suppliers forced to innovate to maintain market share, Rose Pengelly, IM Correspondent, finds.

    Many of the minerals used in conventional oil and gas extraction have been stalwarts of the sector for decades. Bentonite has been used in drilling muds since the beginning of the 20th Century and the first patent for barite as a weighting agent in drilling muds was filed in 1924, while graphite has been used as a lubricating agent since the 1940s.

    But following the oil market crash in mid-2014 which has since seen prices struggle to remain above the psychologically and economically viable threshold of $50/barrel (bbl), and with the resurgence of the US shale industry in 2016 keeping supply high, the drive for cost and time-saving innovation in mineral products used in conventional drilling has accelerated.

    "Oil companies can't afford to speculate on oil prices and it's dangerous to base any decisions on an assumption that the market will improve or even stay where it us," a UK-listed oil company with offshore operations in the North Sea told IM.

    "They need to focus on what they can control, namely their own costs. And that means trimming down opex wherever possible to ensure that they are competitive, or at least able to survive, even if oil prices do crater again," they added.

    Indications from the first quarter of 2017 are that the oil market has turned a corner, with the majority of analysts predicting oil prices will average around $50/bbl this year. A wobble in paper oil markets and strong figures for US shale output in mid-May saw prices dip back towards $45/bbl. But sentiment was subsequently mollified by signs that both Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil producers would maintain production curbs set last year until 2018 to help stabilise the market.