They’re different cost centers, they have different vice presidents, so when they’re making investment decisions, which are based on ROI, they’re being made at the highest corporate level. They aren’t made by some guy at the production level who said, ‘Let’s not drill a well today; let’s work on the crude unit.’” Sometimes the answer is “no” to a proj- ect that seems like a sure thing. Swindler saw that himself earlier in his career work- ing in the chemical industry. “There are times within a company when you look at a project, and maybe there’s a six-month payback, but you don’t have the money so you don’t do it,” he said. “Plant personnel who are trying to operate and maintain the assets may consider it a stupid decision, and that can be a major frustration. In my experience, it seemed like there were lots of good projects that never got done.” Other forms of investment So far we’ve discussed investment in the form of hardware and software. But there are other elements to the picture: the human side. Throwing technology at a prob- lem is rarely a solution in and of itself. The human capital side is a major element and can make a huge difference to a company’s success. Swindler sees that kind of thing routinely in his travels as an integrator. “Refineries operate with a lot of outdated equipment, probably more so than any other type of plant because of the age of their assets,” he notes. “But work processes are a mix. I’ve seen plants with old equipment make impressive productivity gains by apply- ing better work practices. Where people make a commitment, operational excellence can exist in some difficult environments.” The ability to get people working toward common goals may be the biggest key to success. “You need everybody on board to create the efficiencies that these com- panies realize,” said UBS’s Decker. “It’s a function of the human capital you give to it, not necessarily the money you throw at it. Most of the large companies will tell you that. They emphasize the importance and contribution of each individual.” O G Peter Welander is a contributing content specialist for Oil & Gas Engineering . INDUSTRY FOCUS ‘ When margins are very tight and people aren’t investing capital, a lot of companies will take on smaller improvement projects. That’s when we see advanced process control or MES projects to increase yields or improve energy efficiency. But those tie up the available engineering resources. ’ Paul Bonner, Honeywell Process Solutions
F alling oil and gas prices are great for the end user, and everyone cham- pions lower prices at the pumps. However, these low prices are bad for producers, especially those working in unconventional oil and tight gas, where associated costs are much higher. These adverse effects really hit small oil companies operating in U.S. shale plays. As the price of oil wanes, the smaller companies, many of which have borrowed money to start operations, are losing prof- its—fast. It becomes uneconomical to drill
You've reached the end of your free preview.
Want to read all 32 pages?
- Winter '16
- OIL&GAS ENGINEERING