Energy Capital The Magazine-May 2022-Edition 11

FOR INFRASTRUCTURE DEVELOPERS, INVESTORS AND INDUSTRIAL USERS MAY 2022, ISSUE 11

Importance

of predicting failures in the power industry

• Oilfield service market size worth $145.96 Bn by 2028 • S&P Global and the future of the oil industry

Numerical model to diagnose NFR water inrush Roles and stereotypes are constantly evolving and recycling themselves, Susan Nash

Offshore Low-Carbon solutions took the spotlight at this year’s OTC

Energy Capital Magazine WOMEN IN INDUSTRY · Roles and stereotypes are constantly evolving and recycling themselves. "We are a long way away from where we were. Susan Nash

OPINION

· Why A “No Regrets” Decarbonization Approach Won’t Work for the Energy Transition Hassan Mirza, Clareo

ANALISYS

· OTC 2022 Offshore Low-Carbon solutions took the spotlight at this year’s OTC, where energy professionals had the opportunity to exchange ideas and opinions. · Oilfield service market size worth $145.96 Bn by 2028 · S&P Global and the future of the oil industry

Table of Contents

Energy Capital Magazine

POWER

· Importance of predicting failures in the generation, transmission, and distribution of electricity · Enabling a world empowered by clean energy · Renewal of mid-voltage infrastructure in industry

UPSTREAM

· Offshore Technologies

CMP TECHNICAL ISSUES (CONGRESOMEXICANO DEL PETROLEO)

· Numerical model to diagnose NFR water inrush

Contact Information MANAGERS Rubi Alvarado – General Manager Aldo Santillan – Managing Director & Editor in Chief Noe H. Saenz – Editorial Board Chairman DESIGN Gonzalo Rivas – Senior Designer Aleysa Sanchez – Senior Designer EDITORIAL STAFF Elizabeth Garcia – Editorial Analysis EDITORIAL BOARD Christine Spiro – Member (Our Energy Manager) Todd C. Frank – Member (Burns & McDonnell)

· Core Fund in Mexican Offshore Applications · Machine Learning techniques in mature fields

Energy Capital The Magazine is published

by Capital Media Group LLC © 2020. All rights reserved. Digitalized and distributed

by Capital Media Group LLC. We accept no responsibility in respect of opinions, products or services obtained through advertisements carried in this magazine. www.energycapitalmedia.com

Opinion

Release of strategic reserves, a real armor?

By Rubi Alvarado General Manager, Energy Capital Magazine

To help compensate for the Russian oil shortage following the sanctions imposed on Moscow for the invasion of Ukraine, the member countries of the International Energy Association (IEA), including the United States, will release 240 million barrels of oil in the next six months.

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A

t first glance, this maneuver seems like the right bet to shield the oil market from the absence of a significant percentage of the Russian supply. In the experts’ view, the IEA’s further release of emergency oil reserves reduces the risk of a large supply shortfall, which would cause major economic disruption.

However, the experts’ approach could be wrong since they only see the glass as half-full when it is actually getting empty.

In early April, Russian oil production fell by 700,000 barrels per day, and in the middle of the month, it reached a decline of 1.5 million barrels per day.

Sanctions for May are expected to curb 3 million barrels per day.

However, in the third week of April, the European Commission (EC) was working on a document to prohibit purchases of Russian oil more strongly. The sanction would contemplate a total embargo of more than 4 million barrels per day.

This occurs in a context where commercial inventories are at their lowest level since 2014 and with a limited capacity of oil producers (OPEC and its allies) to provide additional supply in the short term.

Also, considering that the 240 million barrels will be distributed in the next 180 days, starting in May, the additional supply points to 1.33 million barrels per day. That amount is insufficient to compensate for

the absence of 4 million barrels that Moscow will stop supplying in May, mainly to Europe.

If Pythagoras is not mistaken, the market – mainly European – will begin to lack nearly 3 million barrels per day as of May, a deficit that, as the days go by, could worsen and generate an unprecedented energy crisis.

Similarly, oil prices could climb to $200 a barrel, posing a serious threat to global economic prospects, including a new deflation: Expensive raw materials in the midst of a recession. So, is the release of strategic reserves effective?

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Opinion

The complexity of energetic chaos The world’s spotlights continue to point to the geopolitical crisis in Eastern Europe. Those responsible for global energy policy have not yet identified what could be the best move to protect the world economy from the chaos generated by the absence of Russian crude.

By Aldo Santillan Managing Director and Editor in Chief, Energy Capital Magazine

A

t the time of this article, the European Commission (EC) was working on a document to ban purchases of Russian oil from May more severely. The sanction would contemplate at least 4 million barrels per day.

However, the measure encountered resistance among some of the member countries of the community bloc. Why? Simple. Russian oil is of better quality than crude from other producers, and exchanging it would be doubly expensive; even triply expensive, if oil prices soar to new highs due to the absence of Russian hydrocarbons.

Likewise, several countries have a great dependence on Russian crude, such as Germany, Greece, Cyprus, Austria, Hungary,

and Malta.

These countries lack the necessary infrastructure to switch to other alternative energies.

Additionally, high oil prices could trigger unprecedented economic turmoil. The specter of a global “deflation” haunts the five continents. And it is that in addition to the rebound in crude oil prices, the prices of grains and precious metals are also oscillating close to historical maximums. This scenario is adjusting downward expectations of the world’s main economies.

We have a clear example with China, with a significant confinement in Shanghai and

growth estimates below 5% for 2022 and 2023.

Despite the well-deserved economic sanctions that Russia may receive for its invasion of Ukraine, applying them is not so easy. Specifically, because the world seems to be headed for an economic slowdown again due to the high prices of various raw

materials and new lockdowns in Asia due to the resurgence of the pandemic.

In this complex context, for now, governments and citizens must strive to use less energy. A measure that would initially reduce their bills, adjust the consumption of fossil fuels and reduce greenhouse gas emissions.

Women in Industry

Roles and stereotypes are constantly evolving and recycling themselves. "We are a long

way away from where we were."

To conquer the unknown and its dangers means to receive great acclaim and recognition. It is time to equip the previously "sheltered" or marginalized to charge right into dragons' nests and emerge victorious.

By Norma Martinez

S

hould be Susan Nash is Director of Innovation and Emerging Science / Technology at the American Association of Petroleum Geologists (AAPG).

Her background led her to move to Excelsior College in Albany, New York, where she was associate dean for graduate programs. She joined the AAPG in 2008 as Director of Education and Professional Development. She diversified into economic development, international training, and education, and she was director of outreach in international energy training.

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What does women's empowerment mean?

Susan thinks it is good to step back and define what women's empowerment means. Is it empowerment that is unique to women? Is it the process of making sure that women have the authority and the agency to make material differences in their field?

If the latter is the case, then a woman's empowerment would mean that she has the legitimate authority to do something in her field and can do it with her own hands.

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Women in Industry

She remarks that further , a woman would be able to be active and participate in all aspects of the professional field. She could be involved in operations, research, training, support, and other branches.

Susan asks, “When is a woman’s leadership irrelevant?” A woman's leadership is outside when she is forced out of the mainstream into the backwaters of the profession, where she is invisible and has no way to influence the main currents. A woman's leadership is irrelevant when she is made invisible or mute and when her work is used simply as a foil for the dominant culture.

“Do we choose a woman for a position because she is a woman, or choose her for her abilities? The first option hints at tokenism; the second suggests a meritocracy," Susan remarked. Does anyone ever select a woman

for a position only because she is a woman? A woman would need to have the right abilities to do the job, so the gender issue should not come up. However, we live in a time when people seek diversity and are actively looking for qualified women.

Someone might even hint that a woman was selected just because her gender sets up the pernicious conditions that women of color have lived with for many years. They are told that they have to be head and shoulders better than their male counterparts just to be considered in the game.

Keep the overall goal and vision There is a predominance of males in the oil and gas industry. Susan’s father was a geologist and she spent time with him. He coached her on starting a business and selling deals in the oil industry, so she was used to a male-dominated environment. Later, when she was associate dean at Excelsior College in New York, the gender distribution was just the opposite, and there were primarily women.

She found it very satisfying to work with both distributions. She comments that the key is to focus on the overall goal and vision and then work as a team to achieve the mission.

Here be Dragons!

Photograph by Rochelle Owens, November 2021 in Philadelphia.

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Talking about an egalitarian system makes Susan think of the old medieval and Renaissance maps of the oceans used as explorers sought to find new trade routes.

Where there were unknown but potentially

WHEN WOMEN ARE CHOSEN FOR JOBS, WE MUST MAKE SURE THAT THEY FEEL SUPPORTED AND THAT PEOPLE RESPECT THEIR ABILITIES. Susan Nash - Ph.D. Director of Innovation and Emerging Science / Technology AAPG - American Association of Petroleum Geologists

dangerous conditions, it was customary to include sketches of dragons rearing up out of the ocean, breathing fire.

We lack a system that encourages those who are not of privilege to charge into the dangerous "Here be Dragons!" parts of the map. Why is it so important? To conquer the unknown and the dangers means to receive great acclaim and recognition. It is time to equip the previously "sheltered" or marginalized to charge right into dragons' nests and emerge victoriously.

Being a woman in a professional life Laura Mulvey is a feminist film critic from Britain and has elaborated the "male gaze" concept, which Susan thinks helps explain what is going on with women's sense of self and how and why we can be so self-limiting. The "male gaze" assesses women and ranks them in their desirability. It is

a mechanism that women internalize so that they do not know themselves or their value until checking in the male gaze to see themselves reflected there, as though it were an "ultimate reality mirror."

So, here's how the "power gaze" can be a self-limiting habit of the mind. Suppose we've internalized the idea that we do not have any value independently but have first to see how someone else assesses us. In that case, we have contingent selves and not authentic selves.

Is there any way to transcend the tyranny of the "power gaze"? Thankfully, yes! It's a matter of developing a team perspective and opening your heart and mind to a higher-order sense of mission. That focus on a higher mission and a vision of what you'd like things to be like in the future can unify even the most ragtag collection of dreamers and team members.

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Opinion

Why A “No Regrets” Decarbonization Approach Won’t Work for the Energy Transition

I

n March, an environmental law firm and shareholder of Shell sued Shell’s Board of Directors “for failing to properly prepare for the net zero transition.” This is not the first time that Shell has faced legal action in response to its climate strategy and net zero efforts. Just last year, the Dutch court ordered the company to reduce its emissions by 45% by 2030, relative to 2019 levels.

The International Energy Agency (IEA) warns that the pace of the energy transition is too slow, noting that investments in renewable energy will need to increase threefold by 2030 if the world's climate pledges are to be met. In our view, one major hurdle to increasing the pace of the energy transition is companies’ adoption of “no regrets” decarbonization initiatives – meaning that regardless of how markets play out, they’ll be rewarded for implementing the solution or technology. Conceptually, this approach makes sense as a way to incentivize adoption of new

By Hassan Mirza, Clareo

methods. However, in practice, it has a critical flaw in that it focuses solely on investor returns.

Shell is just one example of a company failing to deliver on its climate strategy. The World Wildlife Fund reported that as of mid-2021, only 13% of S&P 500 companies had a plan to implement or were actively implementing approaches to reach its targets.

Part of the problem is that many companies use “no-regret” criteria as a key component of their

prioritization of projects and investments. This approach is failing to drive the change that is both necessary and promised, meaning these companies will not only fail to meet these critical energy transition targets, but will also have to grapple with damaged brand reputations and greater mistrust.

Collectively, heavy industrial sectors – such as oil & gas, mining, power & utilities, and manufacturing – account for more than 50% of global emissions.

Despite committing to meet decarbonization targets, according to a recent Forbes survey, only half of executives and managers felt their organization had effective strategies. Simply put, leaders are not confident in the approaches to develop and execute on science-based roadmaps, especially those designed to reach net zero by 2050.

Companies are also struggling to operationalize ideas and solutions at a larger scale. A variety of factors contribute to this, ranging from lack of trust in solution capability and asset downtime avoidance, but it’s critically impacting innovations that will help companies reach energy transition goals. Companies are struggling just to integrate low-hanging opportunities to improve energy efficiency and conservation. They also face steep challenges to adopt new technologies like carbon capture, robotics, and automation.

Industry leaders need to find new ways to add value through their decarb approach. Additionally, current business cycles should be compressed, moving more quickly from strategy to action in order to achieve a sustainable impact from their decarbonization efforts. To do so, senior executives should consider the following: - Take a “clean-sheet” approach to develop and align decarbonization value levers, moving

from compliance-based strategies to ones that create competitive advantage. This is a paradigm shift for most companies, and must be leadership-driven in order to permeate throughout an organization, ensuring that incentives are aligned; - Understand and adopt operating models that increase social license to operate and brand equity, such as actively engaging with impacted communities as early in the process as feasible; - Invest in new growth opportunities that will enable the business to thrive in ESGfriendly environments, and clearly link ESG and sustainability costs and risks to the organization's financials; - Continually tie business strategies to the capabilities required for closing any execution gaps; - Adopt a multi-stakeholder approach to sharing and developing ideas, seeking perspectives from outside traditional industry sources; - Take a balanced-portfolio approach, lining up quick wins while progressing towards longterm initiatives to achieve strategic goals.

Companies must align their climate and operations strategies to the collective appeal of civil society, not solely their investors. The ones who fail to do this will continue to face legal action and dilute their brand credibility. More importantly, if we hope to create a low-carbon future, we must adopt a different approach – one that embraces ambiguity, places small bets in a smart way to de-risk the portfolio and maximize returns, and creates momentum towards achieving larger decarbonization goals.

Analysis The Offshore Technology Conference

OTC 2022 Offshore Low-Carbon solutions took the spotlight at this year’s OTC, where energy professionals had the opportunity to exchange ideas and opinions.

BY ANA PAULA FERRER

T

he Offshore Technology Conference or OTC took place in Houston, Texas. Here, they welcomed more than 24,000 attendees, from which nearly 7,000 came from countries outside the United States. Moreover, according to OTC's official website, the total estimated economic impact of the conference amounted to more than USD 20 million.

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“OTC is widely recognized as a central hub for energy professionals and industry thought leaders to collaborate and develop solutions to address global energy challenges, particularly ways in which we can meet energy needs in a cleaner and more affordable manner,” said Paul Jones, Chair of the OTC Board. “As the energy industry works to deliver sustainable solutions and reduce carbon emissions, OTC continues to play a key role by facilitating knowledge-sharing, learnings, and discussions around the technologies and experts that can deliver these low-carbon solutions now.”

The conference occurred from May the 2nd to May the 5th, 2022. In addition, according to the OTC, throughout the week, 1,064 exhibit companies from 39 countries showcased the future of offshore activities.

Likewise, the conference held 44 technical sessions that presented more than 300 technical papers. Also, the program included 17 executive dialogues and keynote speakers, as well as 11

panels and 5 networking events. Throughout the Around the World series, the conference showcased 7 countries.

Keynote Speaker series The OTC was initiated with The Role of Resilient Hydrocarbons on the Path to Net Zero: bp’s Perspective from the Gulf of Mexico. The speaker was Starlee Sykes, Senior Vice President, Gulf of Mexico and Canada of bp. During the session, the SVP shared how the Gulf of Mexico business will continue to develop existing projects, as well as his perspective on bp’s strategy to pivot from an international oil company to an integrated energy company.

The Sustainability and Energy Transition: The Road to Net Zero panel was next. Its main focus was on sustainable energy transition, decarbonization efforts, and a roadmap to Net-Zero. Moreover, it showed the potential of new and renewable energies in the future mix as well as how the latest discoveries can accelerate the energy 27

Industrial Consumers

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EXECUTIVE DIALOGUES AND KEYNOTE SPEAKERS, AS WELL AS 11 PANELS AND 5 NETWORKING EVENTS.

transition. The speaker was Kamel Ben-Naceur, President of the Society of Petroleum Engineers.

On Tuesday, the next panel in the Keynote Speaker Series was titled Collision Space: AirSea Interactions and the Intersections between Weather, Climate, and Technology. Here Carol Clayson, Senior Scientist, Physical Oceanography of Woods Hole Oceanographic Institution; talked about current research at the air-sea intersection and the importance of better tools to improve the models that underly decisions in all sectors.

An Evolving Energy Company; How CCS Fits was the following panel. Tim Duncan, Founder, President, and CEO, of Talos, presented the company’s leadership in the CO2 capture and sequestration (CCS) arena. Also, how Talos has morphed to attain initial success securing CO2 storage sites with innovative structuring projects.

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On Wednesday, the two panels that took place were Alternate Energies: Hydrogen Impact and Economics and Business Ethics and Professional Conduct in International Offshore Operations. On the first panel, the speakers, Cody Bateman, CEO of GenH2, and Mathew Wilson, Principal-element energy, and ERM Group Company; discussed the role and importance of the future of H2 in the energy transition over the next decade.

Furthermore, on the second panel of the day, Karen Ohland, President-Elect-ASME, demonstrated how nearly instantaneous communication provides new opportunities for collaboration. This collaboration can be in education, research, and standardssetting, creating a better future.

Thursday began the Shaping of the Future: Offshore Wing Growth in the United States session. Here Jocelyn Brown-Saracino, Offshore Wind Lead, Wind Energy Technologies Office of the U.S.

Industrial Consumers Department of Energy, explored new opportunities for the existing offshore energy industry in the U.S. to support advancing development.

Then, Martha Ramos-Gomez, Low Carbon Segment Lead for North America at DNV, spoke at the Hydrogen: The Green Fuel of the Future panel.

Here she shared DNV’s research, views, and forecast of the enabling technology.

Finally, the Keynote Speaker Series ended with the Center for Offshore Safety; Perspectives on Safety, Safety Management, and Offshore Policy Updates from Regulatory Senior Leadership.

On this panel, there was a discussion about offshore safety, offshore compliance, learning from incident investigations, and the efforts to advance a safety-minded approach in offshore operation. The speakers were Captain Matthew Dessing of the United States Coast Guard and Michael Saucier, Regional Supervisor for District Field Operations at the Bureau of Safety and Environmental Enforcement.

net-zero goals. Also, the importance of sustainable energy for developed and underdeveloped countries.

Executive Dialogue During the OTC, there were 7 executive dialogues from Monday to Wednesday. One of them was: A Furthermore, Nicholas Andersen, Chief Operating Targeted Approach to Improving Diversity in Energy, Officer of the Invictus International Consulting, was the speaker at The where speakers Stephanie Cyber War Among Us. Here Hertzog, CEO of Sodexo he discussed the importance Energy, and Kassia Yanosek, of cyber security to protect Consultant at McKinsey & Co. ATTENDEES WERE businesses.

Inc., talked about the urgency WELCOMED THE OTC of increasing diversity in the 2022 Also, at the panel Empowering workforce. the Energy Industry through Another session was Energy Sustainability: Are Digital Transformation, Hany Hydrocarbons Compatible with Getting to Carbon Soliman, Americas Business Leader, Energy, and Neutrality by 2050 and Achieving the SDGs? Sustainability at Microsoft, how the company is Iman Hill, Executive Director of the International empowering the energy industry. It is doing this Association of Oil and Gas Producers, shared the across its value chain with digital solutions to critical role hydrocarbons have in achieving global drive transformation towards a low carbon future.

24,000

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Industrial Consumers

There was also the Timor-Leste Rising with the Greater Sunrise Fields panel. Antonio de Sousa, President, and CEO of Timor Gap, discussed the company’s vision. Also, the efforts to develop the Greater Sunrise fields, and its value in delivering transformational and generational change to TimorLeste as well as to set it in alignment with the Paris Agreement goals.

Lastly, Jeff Weidner, Vice President of Deepwater Portfolio at ExxonMobil Upstream Research Company, was the speaker at The Critical Role of Deep Water in the Present and Future Energy Mix. This session explored the role of technology and digitalization in maximizing the resilience of deepwater and upstream business as a whole.

in-depth discussion of the low carbon trend in the Offshore industry. It also covered a market analysis on the energy industry, and an overview of the challenges and opportunities in the current oil and gas environment.

Notable Panels Among the panels that The panel Accelerating the Energy Transition: took place at this year’s EXHIBIT COMPANIES Synergies for Effective OTC were Offshore Wind: FROM 39 COUNTRIES Opportunity Derisking Implementing Goals for SHOWCASED THE FUTURE and Monitoring took Rapid Growth, where OF OFFSHORE ACTIVITIES. panelists discussed place on Wednesday. In prioritizing and addressing this session, panelists the fundamental obstacles discussed the critical role in offshore wind energy. Moreover, they explored that geoscience support of the energy evolution how the community’s broad offshore energy or the energy transition, plays in the industry. experience can be effectively applied to meet Moreover, the panel How Unified International the U.S. targets.

Standards Enable Efficiency in the Energy Transition was about how standards development Also, at the Creating Value in Offshore Renewable organizations and operators are working together.

Energy: The Pioneers panel, some of the best This teamwork is in order to build on the success minds in the business discussed the future of the of standards implementation to promote change, offshore industry. They talked about how they built learn about the challenges that remain ahead, and their companies, what they see as the challenges the value of cooperation to help transfer knowledge. ahead and how to advance the goals of reducing dependence on oil and gas.

Automation, Robotics, and Remote Operations: Furthermore, at the panel Shifting to a Low Lessons Learned from our Industry and CrossCarbon Offshore Industry, panelists provided an Industry was the final session. Here, panelists

1,064

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Industrial Consumers spoke on how the energy industry has used current circumstances and challenges as an opportunity to conduct operations in a different way. Also, what they can learn from other industries and incorporate them in an efficient and successful way.

Around the world Some of the highlights from Around the World sessions were Offshore Wind: French Knowledge and Experience in a Fast-Growing Market. This session was dedicated to offshore wind power. Speakers presented how the French companies’ know-how has been developed around the world. Also, they shared their experience in all phases of offshore wind farm projects.

In addition, West Africa’s Oil & Gas in Search of Investment in the Wake of Energy Transition. Here the speakers focused on the security concerns of the region. Also, it talked about the policies, laws, and regulations covering the exploitation and development in some countries.

OTC is widely recognized as a central hub for energy professionals, and industry thought leaders to collaborate and develop solutions to address global energy challenges, particularly ways in which we can meet energy needs in a cleaner and more affordable manner,” said Paul Jones, Chair of the OTC Board

Finally, the panel Accelerating the Energy Transition: Highlighting Developments in Brazil and Argentina explored how companies in both countries are racing to reduce emissions. Also, to increase efficiencies and lower oil and gas production costs through innovation and digital technologies.

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Analysis

Oilfield service market size worth $145.96 Bn by 2028

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The oilfield service market is projected to reach $145.96 billion by 2028. The market size was valued at $96.46 billion in 2021.

From 2021 to 2028 it is expected to grow at a CAGR of 6.1%.

By Ana Paula Ferrer, Energy Capital www.energycapitalmedia.com

T

he latest research by The Insight Partners revealed the previously mentioned data.

According to the report, the global oilfield service market growth is driven by oil and gas production and exploration activities. This increases the demand for offshore/deep-water discoveries.

Moreover, among the key players in the global oilfield market mentioned are Schlumberger Limited; Halliburton Company; Baker Hughes Incorporated; GE Oil & Gas; Superior Energy Services, Inc; Hunting plc; Weatherford International PLC; Nov Inc; PETRODYN; Pioneer Energy Services Corp; and Archer Limited.

Oilfield service market The oilfield service market includes the production, operation, exploration, drilling, and intervention among others throughout the life cycle of a well. Oilfield services also assist operators with the control of subsurface pressures, reduction of borehole erosion, minimization of formation damage, and many other things in order to maintain the hole for future extraction.

Based on service type, it is segmented into well completion, wire line, artificial lift, perforation, drilling and completion of fluids, etc. On the other hand, based on application, the oilfield service market is divided into onshore and offshore. There is a rising demand for natural gas and crude oil due to the increased onshore activity in nations like China and Saudi Arabia. This has boosted the industry’s expansion Another thing that has helped this boost is the development of existing offshore wells and rising investments in deep and ultra-deep water drilling activities and subsea oil and gas assets; as well as 25

Analysis

the worldwide increase in the number of offshore rigs and increased investments by top oil and gas firms make predictions for it to rise significantly.

Moreover, based on geography, it is segmented into North America, Europe, Asia Pacific, Middle East and Africa, and South America. Each of these regions are sub segmented.

North America dominates the global market due to extensive oil and gas exploration and production projects. Additionally, there are new activities surging in the US, the Gulf of Mexico, and Canada.

In this region, the expansion of oil and gas output

THE OILFIELD SERVICE MARKET INCLUDES THE PRODUCTION, OPERATION, EXPLORATION, DRILLING, AND INTERVENTION AMONG OTHERS THROUGHOUT THE LIFE CYCLE OF A WELL

and the development of shale gas are predicted to boost the growth of the oilfield services industry in the coming years.

Asia Pacific is projected to grow due to the increasing adoption of technologically advanced equipment for drilling operations as well as continuous growth of oil production. Moreover, several offshore drilling projects in Australia, Malaysia and Indonesia have augmented the number of activities in the region.

Also, the Middle East and Africa, as well as the South America regions are expected to steadily grow. Rising investments in the oil and gas sector are propelling the demand for advanced equipment, including the oilfield services.

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Technology Like any other industry and market, technological advances have impacted the oilfield services changing them forever. In addition, the high demand for oil and gas has led prominent corporations to turn to technology-based services.

These advances improve and increase efficiency in resource extraction and management. They also increment the accuracy, and precision, and decrease time and labor costs.

long-term possibilities for natural gas supply across North America due to the abundance of shale gas resources that can be found in its territory.

Currently, the country with more shale reserves is China; with a sizable portion of its output coming from the Sichuan Basin. According to China National Energy Administration, the country intends to increase output to 30 billion cubic meters per year by 2020 and 80-10 billion cubic meters per year by 2030. The continuous growth of shale basins around the world, bolsters the growth of the oilfield service market.

As mentioned before there are some key companies that play an important part in the growth of the oilfield service market:

Baker Hughes and NET Powers

Shale gas Shale gases are the ones found trapped inside shale (a fine-grained sedimentary rock) formations.

According to the Energy Information Administration (EIA), the unproven theoretically recoverable shale gas potential in the US is estimated to be 482 trillion cubic feet.

This type of gas can be a greener solution since it emits less carbon than coal. The production of shale gas has resulted in a new abundance of natural gas supply. Moreover, Canada offers

According to the report, one of the key players in the growth of the oilfield service market is the partnership between Baker Hughes and Net Power.

The announcement of the partnership was made on February 2022. Their objective is to advance development and global deployment of zero-emissions power plants.

Baker Hughes enters as an established industrial energy partner, investing in NET Power to advance the technical and commercial deployment of NET Power’s low-cost, electric power system. This system generates no atmospheric emissions and inherently captures all carbon dioxide.

“NET Power’s emissions-free power technology solution is driven by advances in clean power efficiency and carbon capture which are key enablers and demonstrate the vital role climate technology plays in enabling the energy transition,” said Rod Christie, executive vice president of Turbomachinery & Process Solutions at Baker Hughes.

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Analysis

NORTH AMERICA DOMINATES THE GLOBAL MARKET DUE TO EXTENSIVE OIL AND GAS EXPLORATION AND PRODUCTION PROJECTS Novo Inc. and the acquisition of ADS Another key player mentioned by the study is Novo Inc. who in February 2022, announced the completion of the acquisition of Advanced Drilling Solutions (ADS). With this new acquisition, Novo Inc. will be able to offer integrated managed pressure drilling solutions. Moreover, they will provide equipment, expertise and capabilities to support full rig integration and automation.

“The combination of NOV’s experience and expertise and AFGlobal’s extensive portfolio of capabilities will bring about the next industry breakthrough in MPD,” said Mark Lapeyrouse, President of WellSite Services at NOV. “We’re eager to blend our rig automation expertise with AFGlobal’s premium design, engineering and manufacturing to create the industry’s most advanced and enabling MPD system.”

Additionally, their full MPD system will be integrated with their wired pipe and Max™ platform, creating the world’s most complete automated drilling package and allowing the operator to adjust in real-time, improving the overall well construction process.

Schlumberger launches PeriScope Edge* Last year, the technology company Schlumberger announced the launching of PeriScope Edge*; a multilayer mapping-while-drilling service. It expands the depth detection range and improves resolution compared to existing services, while utilizing cloud and digital solutions to offer reservoir insights.

“Reducing geological uncertainty plays a critical 28

role to improve drilling performance,” said Jesus Lamas, president, Well Construction, Schlumberger.

“The PeriScope Edge service introduces new measurements and an industry leading inversion process, enabled by hardware and digital innovations, to deliver accurate geosteering in reservoirs where multiple thin layers could not previously be mapped.”

Moreover, Lamas mentioned that this, combined with cloud computing and secure connectivity, creates a unique geosteering workflow that links stakeholders for instant decision making, which results in optimal reservoir exposure improving net-to-gross ratios,

and ultimately greater overall drilling performance that unlocks full reservoir potential.

Archer Limited acquires Deepwell Finally, Archer Limited acquired DeepWell. DeepWell is a leading Norwegian well intervention company focused on mechanical wireline and cased hole logging services.

“An acquisition of DeepWell would secure Archer’s access to a modern fleet of electric wireline units, as well as enable participation in the vessel-based light well intervention market. Strengthening our

equipment fleet, broadening our low carbon/low emission solutions and continuing our track record for service quality are all key aspects of our strategy on the NCS. We are impressed by DeepWell’s team and look forward to continuing this process with them,” said Dag Skindlo, Archer’s CEO.

COVID-19 The oilfield services market got hit in 2020 by the outbreak of COVID-19. Due to the strict measures taken by governments worldwide, the demand for oil and gas decreased; resulting in a drop in oil prices in March 2020.

According to the report, The West Texas Intermediate (WTI) oil price was US$ 61.1 on December 31, 2019, and it was US$ 23.4 on March 23, 2020, a drop of more than 60.0%. As of April 2020, OPEC and other oil-producing nations have agreed to cut oil output by 10 million barrels per day (BPD), or around 23.0% of current levels.

Furthermore, the COVID-19 pandemic has impacted the oil and gas industry in such a way that it has taken it to a point-of-no-return state; where green energy is taking the lead. For example, the European Union intends to make the economic recovery a green one, having committed an additional €225 billion (or 1.7% of GDP) to the energy transition.

THE COVID-19 PANDEMIC HAS IMPACTED THE OIL AND GAS INDUSTRY IN SUCH A WAY THAT IT HAS TAKEN IT TO A POINT-OF-NO-RETURN STATE; WHERE GREEN ENERGY IS TAKING THE LEAD.

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Analysis

S&P Global and the future of the oil industry With the rapid and impacting changes over the past few months in the world, it is not a surprise that many of us wonder what is next. Analysts from S&P Global took the time to answer some of our questions in the hope that a bit of the uncertainty veil is lifted and a clearer view of what will happen in the oil industry is shown.

By Ana Paula Ferrer, Energy Capital www.energycapitalmedia.com

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F

irstly, Richard Joswick, Platts head of global oil Mr. Joswick explains that the loss of and analytics, S&P Global Commodity insights, Russian refined product exports has considers that the oil industry is quite resilient; tightened up diesel markets, and that “but changes take time. While those are occurring, has spillover effects on jet fuel and there can be price impacts.” gasoline, which have all seen increased Moreover, the analyst explained that today's largest prices relative to crude oil. This provides geopolitical factor affecting commodity and energy markets refiners with higher refinery margins, in the U.S. and the world, is allowing them to economically the reduction in Russian and increase production to cover the Ukrainian commodity exports. shortfall. Overall, US refiners are “Each commodity is different, likely to see higher earnings in the but we have seen sharp price second quarter as global oil product increases and price volatility prices will be set by the tight oil as global supplies rebalance.” product market conditions in the Also, he mentions that for Atlantic Basin. oil, the announced release of Secondly, Roman Kramarchik, strategic stocks by the US and Head-Platts Future Energy Richard Joswick other IEA countries is expected Analytics, S&P Global Commodity to help a great deal in covering the anticipated reduction Insights, acknowledges that Russia’s in Russian oil exports. “Crude oil prices have fallen from invasion of and ongoing war with Ukraine their recent highs, but volatility is likely until new supply has clearly changed the short-term energy trajectories, “with the potential patterns and logistics are worked out.”

29

Analysis

to also impact longer-term outlooks and pathways.” For him, emerging key themes include questions of energy security vs. transition. Roles of governments vs. markets.

“Fossil fuel prices have already been experiencing extraordinary price rises, which all else equal, drives for greater energy efficiency efforts and increased interest and uptake of alternative nonfossil energy sources, particularly if high prices are sustained.”

“EACH COMMODITY IS DIFFERENT, BUT WE HAVE SEEN SHARP PRICE INCREASES AND PRICE VOLATILITY AS GLOBAL SUPPLIES REBALANCE.”

He adds that energy reliability and energy security are emerging as stronger themes, pointing toward less dependency on foreign sources for energy and critical materials. Furthermore, requirements for more localized supply chains will increase the overall costs and can slow the dissemination of new technologies required to turn over existing emitting capital stocks.

Moreover, he recommends that businesses look to explore, understand, and limit exposures to key risks around energy prices, volumes, supply chains, policy/regulations, etc. These can be viewed through the lens 30

of short-term/operational actions and longer-term strategic/investment decisions.

Regarding whether we will be able to achieve energy transition by 2050, Mr. Kramarchik mentions that the energy sector is always transitioning and will continue to do so.

As of April 2022, nearly 80 countries have made net-zero emission commitments with various target years ranging from 2035 (Finland) to as late as 2070 (India). “We currently see different likelihoods of them achieving their targets.”

Overall, they attach a low likelihood to our global 2-degree outlook through 2050, let alone a Net Zero outlook.

James Huckstepp, Manager – EMEA Gas Analytics, S&P Global Commodity Insights, mentions that the immediate impact of Russia not supplying natural gas to Europe would be a surge in European gas pricing relative to other key global benchmarks, such as JKM, diverting more LNG to Europe at the expense of demand in Asia. But limits to re-gasification (import) capacity into Europe would also necessitate further European demand destruction, “and even after assuming this, it would still be unlikely Europe could achieve the November storage fill target prescribed by the European Commission last month.”

“Russian invasion is having less effect than you might expect on fuel generation and electric power pricing, at least in the short-term, in that gas prices were already very high prior to the invasion, meaning that coal and lignite were already heavily incentivized to run at near maximum,” explained Glenn Rickson, Head of European Power Analytics, S&P Global Commodity Insights.

When asked if there were any solutions to these effects, Sabrina Kernbichler, analyst, European gas & power, S&P Global Commodity Insights, said that European countries can, and in many cases, already have limited the impact of high wholesale power prices on end-users by lowering or shelving taxes and levies on end-consumer prices.

A C A D E M Y Helping capital project teams excel in the 2 most critical factors for success: People communications and relations.

Training | Coaching | People Campaigns™ www.capx.academy

Power

Importance of predicting failures in the generation, transmission, and distribution of electricity The occurrence of faults in distribution networks is the main factor that prevents the adequate supply of electric power.

Predicting spots’ accurate and rapid location is essential for reliability, immediate restoration, optimal consumption, and customer satisfaction.

By Norma Martinez

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31

Power

Power grid faults Power system operators have the primary task of locating faults in the grid. These can cause various problems such as damage to network devices, service interruption, and network instability, reducing network reliability.

The result of grid faults is reflected in financial losses for customers and utilities. Currently, traditional methods of locating faults in the feeders of distribution networks are not effective, especially in those that cover a wide geographical distribution.

Getting a network to cover a large area is costly because of the workforce and devices required for repairs. Consequently, predicting and locating faults automatically and quickly is indispensable.

Causes of faults in the electrical network The leading causes of faults in electrical distribution networks are lightning, insulation defects, sabotage, tree branches, and animals, which cause a short circuit.

Many faults are transitory and are resolved without loss of supply or with a minimum interruption time. On the other hand, persistent defects cause more prolonged interruptions and are determined after the detection and location of the fault.

Predicting network faults By predicting faults, historical data can be analyzed and extracted to indicate the future absence or current presence of a spot in the system. Thus, pattern recognition methods and machine learning algorithms are of great importance.

There are several methods to measure the distance of faults in transmission networks in the 32

THE U.S. ELECTRICITY SECTOR GENERATES MORE THAN 450 BILLION U.S. DOLLARS ANNUALLY.

electricity sector. But, they cannot be used to locate spots in distribution networks due to the structural differences between the distribution network compared to the transmission network.

Traditional prediction methods There are impedance methods, differential equations, traveling waves, fault indicators and magnetic sensors, protection coordination and current analysis, state estimator, and artificial intelligence methods. However, all of them present some problems.

The main problem of using impedance methods in distribution networks is the multiple response problem. On the other hand, differential methods require connection links with high bandwidth, a high sampling rate, and fast and accurate data synchronization.

Traveling wave methods have a complicated structure and require a high sampling rate. Also, the use of magnetic sensors and fault indicators is not cost-effective due to the size of the distribution network.

33

Power

The drawback of the methods of coordination of protections and current analysis is interference in the detection of the main fault section. It occurs when the fault resistance is high and affects the existing domain. As a result, performance is affected.

The need for much sampling and accurate line parameters and complexity are disadvantages of state estimation methods. Finally, the drawback of intelligent methods is the need for extensive and precise data banks that must be updated when a small change is applied to the network.

Automated power grid Today, electricity providers have to supply businesses and industries around the world with equipment, systems, and services to provide them with service reliably and efficiently, from their point of generation to the end consumers.

An automated grid is capable of meeting the challenges of the energy transition by enabling the safe and reliable connection of renewable and distributed energy resources to the grid.

Energy providers need to rely on digital transformation by integrating energy processes and technologies. By fostering the use of the

AS OF FEBRUARY 2019, AROUND 23 PERCENT OF THE U.S. ENERGY AND UTILITY ORGANIZATIONS USED AUTOMATION ACROSS MULTIPLE PROCESSES AND COUNTRIES.

34

THE UNITED STATES WAS POSITIONED AS THE COUNTRY WITH THE HIGHEST SHARE OF ENERGY AND UTILITY ORGANIZATIONS IMPLEMENTING INTELLIGENT AUTOMATION PROCESSES AT A SCALE OF MULTIPLE CASES.

cloud to connect products, controls, software, and service, they will support the management of solutions for the entire lifecycle.

Power Grid Perspectives The life of the power grid in homes, buildings, data centers, businesses, and industries will increase in functionality if a digital twin supports the design, construction, operation, and maintenance.

As energy drivers, suppliers are focusing their technological innovations on high-efficiency electricity transmission and storage, generating power with even lower or zero emissions, and reducing CO2 emissions in industrial processes.

Similarly, suppliers are digitalizing energy to decarbonize energy systems. They are starting to offer digital portfolios that boost their customers’ business while protecting them with the best possible security through customized solutions to combat cyber threats.

The introduction of automatic fault prediction and location systems will greatly support organizations in saving time and human resources; it will also improve the system, prevent failures, schedule events, and, finally, lighten the economic factors.

35

Power

Enabling a world empowered by clean energy FuelCell Energy thinks about renewables and other technologies as complementary. The Company supports the decarbonization of power, producing hydrogen.

By Norma Martinez

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F

uelCell Energy has about five decades.

Bernard Baker and Martin Klein were two early fuel cell, energy pioneers. They were chemical engineers by trade, and they did a lot of experimentation with battery technology and how they could evolve that to be more of a clean energy source.

Eventually, the Company got to a point where it could commercialize some of this technology, all they had been innovating into an authentic industrial scale product. At that moment, FuelCell began selling the fuel cells that are now around the World on three different continents.

Fuel Cells A lot of people wonder what in the World are fuel cells. An exciting thing about fuel cells is that they do not combust any fuel. It is an entirely chemical reaction. These cells can run in this chemical reaction on several different input fuels. It can be biogas, renewable natural gas, hydrogen or gas blends; these fuels go into the fuel cell, they are converted into hydrogen and later into power.

Empower the World with clean energy FuelCell Energy thinks about its technology enabling the World as it goes along this energy transition.

Every country in the World has signed up to figure out how we can accelerate the path to net-zero. That is a big challenge, and it will take a lot of different technologies to get the industries there. Renewable sources like wind and solar will be a massive piece of that puzzle.

But the industry needs to understand that other technologies such as fuel cells are required to fit into the mix. This goal is where FuelCell Energy helps produce green hydrogen.

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Power

WHEN I THINK ABOUT RENEWABLES AND OTHER TECHNOLOGIES LIKE FUEL CELLS, THERE IS A SIGNIFICANT DEMAND TO FIGURE OUT HOW THEY ARE COMPLEMENTARY. Betsy Schaefer, Chief Marketing Officer, FuelCell Energy.

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IN FUELCELL ENERGY, WE TRY TO THINK ABOUT OUR TECHNOLOGY BEING ENABLING THE WORLD AS WE GO ALONG THIS ENERGY TRANSITION.

The Company can also capture carbon dioxide, which is another vital part of the energy transition; as in the future, many industries will be emitting Co2, the World needs to find solutions to use or store it.

Defying energy challenges The World is dealing with a lot of simultaneous challenges at the moment. The biggest hurdle to overcome is how to help to accelerate the adoption of these newer technologies.

From a fuel cell energy perspective, FuelCell Energy can help with a practical approach on the journey to netzero. Many industries use carbon dioxide like in food processing. Ramping up hydrogen production is really in the wheelhouse; the processes can help organizations capture that carbon or recycle it and use it.

FuelCell Energy helps one think a little bit differently about how they use energy; it shows them how to take the proper steps along that path, although it is not an overnight solution.

Bet on hydrogen From a fuel cell energy perspective, FuelCell Energy is the only clean energy company that can make hydrogen in multiple different ways. For example, the Company uses electricity and water to produce hydrogen. Also, it can use biogas or other fuels.

FuelCell sees a big future ahead with hydrogen needs scale; it will be a central part of many different industries, 33

Power

from transportation to utilities; besides, there are a lot of other applications emerging for hydrogen.

Toyota's project underway FuelCell Energy is currently constructing a hydrogen platform at the Port of Long Beach in California. When the platform is completed, it will deliver 2.3 megawatts of power, 1.3 tons of hydrogen a day, and 1400 gallons of water.

This project is with Toyota.

The platform itself runs on biogas, and so it will produce the hydrogen power and water; so, this is going to be crucial for Toyota's operations. Also, the hydrogen will be used to fuel the vehicles that they have on-site; with the water, they will wash the cars when they arrive from the container ships that bring them from Asia, and the power will give energy to the port operations.

FuelCell Energy expectations The fuel cell producer looks to accelerate those two halves of its strategy, which is around hydrogen production. The Company has some platforms it is developing to address those

WHEN I THINK ABOUT RENEWABLES AND OTHER TECHNOLOGIES LIKE FUEL CELLS, THERE IS A SIGNIFICANT DEMAND TO FIGURE OUT HOW THEY ARE COMPLEMENTARY. Betsy Schaefer, Chief Marketing Officer, FuelCell Energy.

hydrogen needs; also, it is scaling up its carbon capture technology. For this purpose, it has a partnership with organizations like Exxon.

FuelCell Energy has a long history of innovation in clean energy. It is doubling down on scaling up those efforts as it looks to the next foreseeable future.

Alliance with VSA Partners Recently, FuelCell Energy established a partnership with VSA Partners to help the

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SOMETIMES, WHEN WE WANT TO HAVE A ONE-SIZE-FITS-ALL SOLUTION IN ALL INDUSTRIES, IT IS BETTER TO FIT THEM TOGETHER; WE NEED ALL THESE TECHNOLOGIES TO WORK EFFECTIVELY TOGETHER. Betsy Schaefer, Chief Marketing Officer, FuelCell Energy.

Company develop a modern progressive brand.

This alliance aims to enable a world empowered by clean energy.

The campaign is for customers, communities, employees, and stockholders; it shows the Company's commitment to supporting a clean World through all the processes and systems of producing and distributing fuel cells.

Finally, there is so much going on in the World around clean energy and how people use it.

The exciting thing about the energy industry is just the opportunities for technologies to work together.

35

Power

Renewal of mid-voltage infrastructure in industry We are in a time of very rapid changes in which technological innovation is going at an almost unattainable speed. In order for countries to keep up with this pace and prepare for industry 4.0, it is necessary to renew its electrical infrastructure; among them, the mid-voltage.

W

ith COVID-19, digital doors that previously seemed far away have opened. The pandemic has forced many to work remotely, leading to increased demand for electricity.

It also promoted the growth of the Internet of Things (IoT), Big Data, Artificial Intelligence, and everything related to the fourth industrial revolution or Industry 4.0.

The challenge The world may face an electrical reliability risk as its infrastructure is in a deteriorating state. The growing need for more efficient and 34

sustainable electricity increases the obligation to provide quality and speed in the electrical network. The lack of modernity and maintenance of this has caused significant losses for the whole country during the last years.

According to Energy Star, an U.S. government-backed symbol for energy efficiency, approximately one-third of all distribution network losses are due to transformers.

Moreover, 70% of the transformer loss is due to distribution transformer.

The installation of more efficient transformers has the capacity to yield large energy and monetary savings.

In addition, there are two types of transformer insulation: liquidimmersed and dry-tape. According to DOE, liquid insulation is more efficient and can have a longer lifetime. But it is not safe since it has additional risk of leaking, catching fire or catastrophic failure. For these reasons, usually the liquid-immersed type is found outdoors.

Moreover, distribution transformers can have various types of cores; the most common one is laminated steel. There is also using amorphous metal which, compared to laminated steel, can reduce the core losses by approximately 60%.

Amorphous cores have many advantages such as its strength and electrical characteristics. It also has low core losses, less noise, higher efficiency and a longer life.

On the other hand, some of its disadvantages are that it requires advanced, more-costly techniques to produce. Also, they have higher inrush current. More harmonic problems, bigger size and higher initial costs.

How to identify the moment of renewal?

Previously, the importance of the renovation and modernization of the medium-voltage infrastructure was

mentioned. Letting time pass can be fatal for energy distribution to be efficient.

There are two types of transformer losses: load losses, occurring during use and no-load losses, these are also called as standby losses.

The coils of the transformer are responsible for load losses and the core of the transformer is responsible for no-load losses.

Moreover, there are two ways that the efficiency of a distribution transformer can be improved. First is improving the core and winding materials. Secondly, is altering the geometric configuration of the transformer.

A typical distribution transformer is estimated at 25-30 years. According to DOE, it estimates an average lifetime of 32 years. Power transformers 35

Power

THE WORLD MAY FACE AN ELECTRICAL RELIABILITY RISK AS ITS INFRASTRUCTURE IS IN A DETERIORATING STATE.

with more than 40 years in operation have a high incidence of failure. Similarly, it is reported that its age increases repair times.

On the other hand, power switches installed in high to medium voltage distribution substations that have been in operation for more than 30 years, have a higher incidence of failures. This is due to the mechanical and electrical stress they are subjected to during their useful life.

The switches, like the transformers, have an increase in repair due to their age.

Like the infrastructure mentioned above, its 36

age notably increases the time and cost of repairs. When the medium to low voltage distribution transformers are more than 30 years old, they present a higher incidence of failures.

This is due to the electromagnetic stresses they have been subjected to during their useful life.

Digitalization One of the solutions presented to improve this infrastructure in a way

that it can meet the demands of the future is its digitalization. This new transformation allows operations teams a continuous level of visibility into their medium-voltage assets.

In the same way, having constant information about the status of the equipment allows for preventing failures and detecting threats.

Also, factors such as humidity, temperature, contaminants, and load factor, which affect the equipment,

can be monitored. In this way, they allow more specific maintenance and better use of the equipment. Companies like Siemens, Schneider Electric, ABB, Endress+Hauser, to name a few, already offer different digital products. At the same time, they recognize the urgency and need to achieve the transition.

The advantages of renewing the mediumvoltage infrastructure are endless. By having more modern equipment, there will be fewer electrical interruptions; this, in turn, allows for fewer interruptions in production and, therefore, less economic loss. Every time there is an electric interruption, the productivity of the hit zones stops having a negative effect on them. Making this transition allows for greater efficiency and reduces environmental impact.

It is also necessary in order to keep up with new technologies.

What is medium-voltage?

The medium-voltage has a voltage from 1kV to 25 kV. It is the one used to distribute electricity from substations to transformer banks. Upon reaching the transformers, the voltage is reduced to low voltage. From there, it is supplied to the cities of light.

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Upstream

Offshore Technologies

The oil and gas industry is looking to work in a more efficient way. With this, new offshore drilling and production technologies are being born in order to achieve the ambitious goals of the industry.

O

ffshore drilling is understood as the process of extracting petroleum from reserves. What differentiates these from the mainland ones is that the first are located at sea and the second on land. Today there are around 1,470 offshore oil rigs around the world. In addition, offshore production accounts for 30% of global oil production and 27% of global gas production.

Moreover, offshore production began in the 1950s with 200 meters deep in shallow waters.

By the 1990s, companies began to reach depths between 400 and 1,500 meters. Companies currently produce from depths of up to 3,000 meters and keep rapidly expanding.

This task is not an easy one; that is why companies are looking more and more for efficient and sophisticated technologies. But before getting into what these new technologies bring to the industry, it is important to understand the process of oil and gas offshore drilling and production.

Upstream

THIS TASK IS NOT AN EASY ONE; THAT IS WHY COMPANIES ARE LOOKING MORE AND MORE FOR EFFICIENT AND SOPHISTICATED TECHNOLOGIES

Drilling Secondly, once the Geophysical surveys have given their results and the chosen area meets the necessary conditions, drilling can begin. For this, companies use mobile offshore drilling units. These are temporary drilling units that clear the path for the permanent offshore platforms or production structures.

In some cases, these units can be turned into the recently mentioned platforms. The job of the mobile offshore drilling units is to find oil and natural gas reserves by drilling into the ocean’s floor.

The drilling process begins with spudding, where the mobile offshore drilling units carry out the drilling in an open hole location.

The units drill the seafloor until the desired drilling depth is reached.

Then the blowout preventer or BOP stack is installed in order to ensure pressure control of a well. Once the mobile offshore drilling unit hits the oil, engineers seal the well to prepare it for a production rig.

Production Exploration Firstly, the process begins with exploration. The ocean is a vast, rich place and is mostly unknown to humans.

One way of understanding or having a clearer view of what is below is using Geophysical surveys.

These surveys work with ground-based physical sensing techniques. They are made in order to explore what is below the surface. With these, we can find out if there are reefs, hills, deep holes, rocks, or sand. Also, if there are any species living there. This is really important since the objective is to make the most of the zone without disturbing its biological richness.

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Thirdly, now that the commercially viable well is found, platforms can be built.

There are different kinds of platforms, such as a Fixed Platform (FP), Compliant Tower (CT), Tension Leg Platform (TLP), SPAR Platform (SPAR), among others.

Depending on the type of offshore environment, companies decide which platform will be the best.

Offshore pipelines Finally, offshore pipelines are the ones that make possible the distribution of oil

and gas. They are built on the seafloor connecting subsea wells to the platform and form the platform to the coast.

Once the oil and gas are on land, refinery processes begin, and eventually, they are distributed.

So, as we can see, it is a massive process that requires a lot of machinery and people working together.

Furthermore, any little mistake can scale into catastrophic results since, as mentioned before, it directly involves the local ecosystems. So, state-of-theart technology is vital.

Here are some examples of the newest and most sophisticated technologies that are being used and changing the oil and gas industry:

Artificial Intelligence and Data Science A.I. and data science are coming big and heavy in all industries. It is no wonder that the oil and gas one is using them to improve its processes. A.I. and data science give insights from predictive, prescriptive, and cognitive analytics.

With this, it is easier to make fund-based decisions and predictive maintenance, as well as discover, analyze and explore the seafloor; making it possible to implement an adequate solution. Also, to reduce risks, cost savings, and increase the success rate.

Cloud Computing With so much data being received, cloud computing comes as a key player. This technology is able to store and process data on remote servers. With this, people working on the drill can have fast and safe access to all the data, allowing them to plan, improve, change and make the most of the operations.

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Upstream

Internet of Things (IoT) On the other hand, the Internet of Things has rapidly grown and made its way to the oil and gas industry.

This new technology makes it possible to improve production, optimize equipment, monitoring of machinery and infrastructure, as well as to ensure worker safety.

It enables real-time data collection, helping prevent any leaks and detect anomalies. It also provides remote access to the usage and maintenance data of remote machines.

Blockchain Blockchain technology is enabling more secure and transparent digital transactions. The use of smart contracts and distributed ledgers allow verifications, clarity, and trust between the parties involved.

Companies like IBM have initiated smart contract platforms to manage crude oil deals securely.

Automation The use of robotics and automation comes as an excellent solution for the oil and gas industry. It is well known that offshore drilling and production

ANY LITTLE MISTAKE CAN SCALE INTO CATASTROPHIC RESULTS SINCE, AS MENTIONED BEFORE, IT DIRECTLY INVOLVES THE LOCAL ECOSYSTEMS. SO, STATE-OF-THE-ART TECHNOLOGY IS VITAL

jobs often involve working in complex environments that might be risky for workers. Implementing robotics and automation reduces these risks increasing the workplace safety and optimization. Also, these technologies make it possible to inspect areas that were inaccessible to humans. It is projected that by 2030 the global market value of automation technology in the oil and gas sector will reach around $42 billion.

Predictive Maintenance With the collected data, it is easier to understand when some equipment is failing, or something is wrong. It enables engineers to quickly assess equipment conditions and, more importantly, to implement measures and solutions at the right time. With this technology, safety is really improved.

AR and VR Augmented Reality (AR) and Virtual Reality (VR) come as very useful tools. They are able to show real-time 40

information about equipment, tools, and parts.

Additionally, VR headsets can give practical training to workers without visiting the plants, reducing risks and incrementing efficiency. Moreover, AR sets can provide hands-free instruction steps and relevant tools and parts. It is expected that by 2024 the AR and VR market will increase ten times to ~$300 billion.

3D Modeling and Visualization Understanding what is below the surface and around the location of the drilling platform is not an easy task. As mentioned before, they are often in a place with some extreme and risky conditions. By using 3D modeling and high-quality visualizations, it can make it easier to create realistic representations of the subsurface reservoirs and the equipment used.

Manufacturing Execution System (MES) A Manufacturing Execution System is a software focused on the production. It monitors, documents, and integrates manufacturing facilities, operational technologies, and computing systems. The aim of this system is to control the production process, making it safer, faster, and more reliable.

Offshore Technology Conference 2022 The Offshore Technology Conference (OTC), an annual conference held in Houston, Texas, since 1969, that gives the Spotlight on New Technology Award.

This award is aimed at companies that innovate and create the most advanced technologies in the industry.

Among the winners of the 2022 Spotlight on New Technology Award were Bosh Rexroth with the production of SVA R2, the first electric Subsea Valve Actuator with safety by springs as compact as hydraulic actuators.

Another winner was Expro, producing Galea™, an autonomous well intervention system. There was also Oil States Industries, producer of Oil States Managed Pressure Drilling & Riser Gas Handling System.

Oil States and TotalEnergies, were also part of the winners. They are the producers of 15K High Pressure, High Temperature (HPHT) Riser System for Subsea Drilling Applications in Shallow Water.

Furthermore, R3 Environmental Systems, won by producing Vacuum-Assisted Pure Oil Recovery Technology.

Finally, Schlumberger, one of the biggest oilfield services companies in the world, won two times.

First with its ReSOLVE iX extreme-performance instrumented wireline intervention service. Second, producing Autonomous Directional Drilling.

So, as we can see, digitalization is rapidly taking over the oil and gas industry. The innovations and technologies that are being used are drastically changing the way drilling and production are made.

These technologies can be a glimpse of the future of the industry where companies are focused on being efficient in a way that they don’t harm the planet but, at the same time, are able to satisfy the increasing need for energy and have a safe work environment.

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CMP Numerical model to diagnose NFR water inrush

S

implified numerical model for diagnosing water inrush in a YNF through dynamic characterization and calculation of critical flow rates.

A methodology for diagnosing water inrush in naturally fractured light oil reservoirs was shown during the study. The following analyzes were used: Dynamic reservoir characterization, Critical flow analysis, Water inrush diagnosis, and Simplified numerical model.

As we know, the premature irruption of water has been a recurring problem in naturally fractured reservoirs (NFR) with an associated aquifer; representing important losses in the production of hydrocarbons, the profitability of the project, and problems associated with the management of surface water.

Likewise, this problem makes the diagnosis of the inrush of water take

an essential role in the decisions for the administration of the reservoir to maximize the recovery factor.

This methodology, presented below, was applied in the Omega field, producer of light oil in Mesozoic carbonate rocks; which is located in the Gulf of Mexico.

The multi-tank model considers neighboring producing fields in the Mesozoic; Beta, Alpha–Gamma, Delta, Pi, Omega, and Lambda, connected to a physical aquifer. According to the pressure points measured in the Beta and Delta fields, it is observed that the aquifer does not affect them; they are practically isolated.

From the analysis presented and with the proposed model, no conings are observed; this is mainly due to the

heterogeneity in the deposit; as well as the presence of low permeability rocks that function as a natural barrier to the flow of water.

The model conceptualizes the advance of water through the areas of greatest permeability. Although coning was not identified; high oil production can cause premature water inrush into the wells (tonguing), and have low oil recovery.

Most of the wells have not exploited the upper layer of the reservoir, so it is feasible to repair the wells to this layer with better petrophysical properties once water breaks occur.

The Omega reservoir produces volatile oil of 36°API, naturally Fractured, saturated with water ingress. According to the pressure behavior, there is hydraulic communication with other deposits.

A permeability range of between 5-90 md was obtained from the analysis of available pressure tests. This variation depends mainly on the flow unit where the well is completed. In the Omega-A well, the influence of the aquifer on the pressure response can be observed.

During the study, it was identified that the JSKE5 unit has a high clay content and a significant thickness (50 m); so it could act as a natural barrier to coning water.

To understand the behavior of the movement of water within the reservoir, a practical

model was made with the following characteristics. Simplifying into three main layers according to the petrophysical evaluation of the wells.

Using the practical model, no coning is observed due to the reservoir heterogeneity and the presence of low-permeability rocks.

Likewise, the model conceptualizes the advance of water through the areas of greatest permeability. Although coning was not identified; high oil production can cause sudden water inrush into the wells (tonguing), and have low oil recovery.

The formation of a secondary gas cap was verified in the model; which is complemented by the evidence of gas production in API gravity analysis and pressure behavior at the head of the wells.

Engineer Rafael Méndez García presented the work in the recent edition of the Mexican Petroleum Congress (CMP).

Upstream

Core Fund in Mexican Offshore Applications

T

he study addressed the longest downhole core intake run in Mexican Offshore applications.

According to the study, the first well in Mexico was drilled in 1862. That is, it has an oil history of more than 150 years.

The first bottom-core intakes in Mexico date back to 1968. In 2017, the Z field was discovered, considered among the most important reservoirs worldwide, in the last 30 years.

Moreover, Mexico's longest successful core run took place in 2018 (36 m). Likewise, it accumulates the longest core length taken in the same offshore well (104 m). The Z field coring surpassed both results and currently holds the record.

The formation of interest to be captured in well Z2 contemplated an approximate interval of 180 meters. This represents a total of 15 runs to take the

42

entire interval, using the conventional setup. Likewise, the total investment for a 15-race program represents an approximate 24-day platform.

During the study, the use of a conventional and total closure system was proposed for the application.

The conventional system is useful for consolidated and homogeneous formations. In addition, the total closure system allows better interaction with the crumbly and soft formations. Once on the platform, it would be easy to switch from one system to another between races.

Anti-Clogging Technology was applied; which allows continuing the race when the jam occurs. Additionally, it allows accommodating 3 or 4 jams before removing. Reduce costs associated with core operations. When jamming occurs, the system is activated, and the respective sleeve is released, making way for the next one.

At the end of the study, it was concluded that the use of extended barrels saves at least 8.6 days in trip operations vs. everyday applications in each well. Similarly, the amount of sample recovered serves as a witness to the production capacity of the Z field.

The sample obtained presented high quality to perform laboratory analysis. Likewise, the impeccable execution of the plan validated the selection of the core system, reaffirming itself in the performance of Z3. Quality information helps maximize the financial results of drilling projects.

Engineer Iván Luna Cabrera presented the work at the recent edition of the Mexican Petroleum Congress (CMP).

Numerical simulation sector model

T

he objective of the study was to perform a sectorial dynamic analysis in the sandstone field (MS) to evaluate the potential of a horizontal location; considering as a starting point a static model and the existing dynamic information, to give more technical support to the production forecast.

The study area is in the northeast of the country, with an area of approximately 6 km². Likewise, the program was to drill from an existing macro well, located in the northern portion of the sectorial model.

During the study a production forecast was made. The production forecast was made for 6 years. Two scenarios were performed, the first one considers the historical setting of the neighboring wells; while in the second one, a new zone that is not affected by the neighboring wells was considered.

During the study it was determined that the dynamic assumptions for the simulation control are maximum flow rate of 500 bd and

surface pressure of 10kg/cm². The accumulated volume difference is approximately 170 Mb. Based on the simplified model it was observed that there is a hydraulic communication in the field sandstone (Em) for the study area and gives certainty to the proposed location.

The petrophysical parameters towards the area where the horizontal location is located are of regular to good characteristics. Likewise, the current static pressure of the reservoir is 20% below its initial value.

Likewise, the historical gas behavior is uncertain.

An analogous correlation well was considered for the elaboration of the relative permeability curves corresponding to the Em horizon.

Additionally, two predictive scenarios were considered varying the pws (187 kg/cm² and 142 kg/cm²), where both have favorable results of Qoi and Np. Finally, the simulation results allowed us to meet the Qoi and cumulative volume commitments of the well in question. Likewise, for the current reservoir pressure scenario (pws = 142 kg/cm²).

It is recommended to identify new completion proposals that increase the hydrocarbon recovery factor.

Engineers Eder Gabriel Pineda Quintana and Cuitlahuac Flores Muñoz presented the work in the recent edition of the Congreso Mexicano del Petroleo (CMP).

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Upstream

Machine Learning techniques in mature fields

O

ptimization of the evaluation process of new locations in mature fields through the application of Machine Learning techniques in the analysis of historical subsurface and production data.

During the study, the Kmeans algorithm was applied.

It is an unsupervised classification algorithm that groups objects into k cluster numbers, depending on the metric used.

Once the number of clusters, k, is chosen, k centroids are randomly established in the data space. Each element in the data set is assigned to the nearest centroid.

The position of the centroid of each group is updated by taking the position of the average of the objects belonging to that group as the new centroid.

A hybrid cluster analysis was also used.

It contemplates procedures in which more than one cluster analysis is used, either to simplify the dimension of the data or to obtain a more precise analysis. First a Kmeans analysis was used to obtain a set of small groups that by the metric used have very similar (close) characteristics and then an agglomerative analysis with Pearson's metric.

During the work we had information from up to 170 wells. Data related to geographic location, geological formations and perforated intervals, and geophysical data (also production data, but that deserves a separate analysis); which resulted in about 2 million records with about 20 variables describing them.

For the development of the methodology, it is important to establish a multidisciplinary team of 44

business specialists; as well as validate the quality of the input data, 80% of the work effort lies in applying governance and establishing a data model.

Likewise, strengthening the training and skills of business specialists to apply data analytics technologies, which will allow them to manage information and help multidisciplinary groups in decision making.

Finally, Pemex, through its business specialists, should establish data governance to standardize workflows. Also, facilitate the analysis of fields through the application of methodologies with data analytics; in order to reach automated procedures of information integration that allow to obtain the hierarchy of wells with opportunities in mature fields.

Engineers Jorge Pedro Cruz Andrade, Carmelo Hernández Martínez, Edgar Adrian Priego Domínguez and Jorge Luis Hernández Castillejos presented the work in the recent edition of the Congreso Mexicano del Petroleo.

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