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Southwest Process Controls to Attend OTC Tradeshow

Southwest Process Controls is excited to announce that we’ll be exhibiting with Hy-Lok USA at the 2017 Offshore Technology Conference (OTC), held May 1st – 4th at NRG Park in Houston. The biggest energy show in the world, OTC provides a valuable arena for energy professionals to network, view new technologies, and attend various educational seminars on offshore resources and environmental issues. Featuring more than 2,300 exhibitors, this exciting event draws industry leaders from 100 countries.

Training, Networking & Sessions

Various training courses, technical sessions, luncheons, and networking events will be held, with topics ranging from safety and risk management to the digital revolution. Universities will also showcase their offshore technology research and development (R&D) projects, and emerging energy companies will highlight their work. Special event topics include “Building Tomorrow’s Leaders in Oil and Gas: Strategies and Ideas to Excel in the Present Day Climate” and “Networking in the Downturn.”

Training courses will cover a wide range of offshore energy topics, such as fracpacking for sand control, seismic interpretation in deep water basins, and sustainability. These forums will provide valuable insight into new innovations and strategies to adapt to today’s changing landscape, with increased focused on renewability and sustainability.

Southwest & Hy-Lok Showcase

Southwest will be showcasing our Hy-Lok fluid system control products, including valves, tube fittings, quick connects, ball and plug valves, needle valves, check and relief valves, and manifold and gauge root valves, as well as cryogenic components. These high-quality products provide reliable, long-lasting service for offshore equipment of all kinds.

More on Southwest Process Controls

We’ve been proudly serving the oil and gas industry for over 15 years, supplying companies with only the best products from our trusted partners. Committed to constant improvement and innovation, we understand the importance of staying on top of industry trends and invite you to follow us on Twitter, LinkedIn, and our blog to stay up to date on important news and events.

New Opportunities in Oil: What’s Happening in Eagle Ford?

Late last year, we spent some time discussing the Permian Basin in Texas — specifically the Delaware Basin and the incredible rebound in oil and natural gas production it’s seen over the past few years. This month, we’re digging into the Eagle Ford Shale, the South Texas sibling of West Texas’ Permian.

 

Formation of the Eagle Ford Shale

Like the Permian Basin — which covers around 75,000 square miles of southeast New Mexico and western Texas — the Eagle Ford Shale was once submerged in the Tobosa Basin, the sea between the Laurasia and Gondwana supercontinents.

As the continents neared each other and the land rose, the area of the Permian remained submerged, thanks to the Hovey Channel, which kept the area connected to the ocean. As the Permian formed around 300 and 250 million years ago, the area that would become the Eagle Ford was still high and dry. It wasn’t until 153 million years later that the Eagle Ford Shale would begin to form.

Why the Recent Rebound?

The Eagle Ford Shale has a unique history, much different than that of its neighboring Permian basins. Those basins, the Delaware Basin, in particular, were impacted by three primary factors: availability, economic policy, and technology.

The United States’ embargo on Arab oil in the 1970s and corresponding crude oil export ban led to a considerable surplus of oil and a drop in crude prices — an inhospitable environment for large drilling operations. More recently, slowly rising oil costs, Congress’ 2015 vote to end the export ban, and advancements in horizontal drilling technology have led to a significant boom in Delaware Basin drilling, particularly for deposits that were unreachable until recently.

In the Eagle Ford, the situation has been somewhat reversed. In 2010, when drilling in the Permian was way down, the Eagle Ford Shale was among the most active drill sites in the United States. And as drilling in the Permian rose, drilling in the Eagle Ford slowed; by the last quarter of last year, there were 25 active Eagle Ford drilling operations.

Land, Oil, & Economics

Economics are the main cause of this contrast. The horizontal drilling opportunities present in the Permian are absent in the Eagle Ford. The ability of a single Permian well to tap multiple oil or gas formations reduces the break-even point for drilling to $30/bbl or less, while the Eagle Ford break-even, due to its lack of horizontally accessible formations, remains at about $50/bbl.

Land leases and production obligations also play a part. Eagle Shale drillers are operating the fewest number of drills required in order to maintain drilling obligations, allowing them to retain their leases and preventing other organizations from taking their own leases and starting wells. Simply put, drillers in this area are sitting tight on their Eagle Ford Shale assets while actively pursuing Permian Basin assets, which, at this moment, are more profitable.

This trend is already starting to reverse, however. While Delaware Basin drilling in the Permian remains strong, more wells are being reactivated in the Eagle Ford Shale. From its low point in fall of last year, the number of active Eagle Ford wells has increased by over 100%. While slow, with only a small handful of rigs coming online every week, the trend is distinct and holding steady.

A major driver of this rebound in the Eagle Ford is also a driver of the Permian rebound: the ever-present threat of peak oil. Though estimates of when we will hit peak oil vary tremendously, it is becoming increasingly clear that we’ll peak sometime in the next generation or two. The inevitability of peak oil — as well as constantly increasing pressure to move toward environmentally friendly and renewable energy sources — drives both an increase in oil drilling and an increase in natural gas drilling.

Southwest Process Controls

Southwest Process Controls, having maintained a presence in the petrochemical industries for 15 years, is committed to following and analyzing shifting trends in the oil and natural gas drilling fields. To keep on top of these trends and stay up to date on relevant industry news, visit our blog regularly and/or follow us on Twitter and LinkedIn.

The Future of a Benchmark

What Lies Ahead for WTI?

Oil Image Feb. Blog 1In January, we explored the difference between two different benchmarks for crude oil prices: Brent and West Texas Intermediate (WTI). These two indices can vary widely from each other, and while both benchmarks have been used for some time, their future in the industry is far from certain. How reliable are they? Is one used more than the other? Today we will examine WTI and its role in the future of the oil industry.

Global Vs. Local

WTI may have reached its peak as a global benchmark for oil prices in the 1980s. That period showed domestic production occurring at around 8.6 million barrels per day, with 1/3 of that oil coming from Texas. This light, sweet crude was of exceptionally high quality—among the best in the United States. In today’s market, however, a domestic measurement may not be adequate for comprehensive oil prices. Brent, with its international status, is starting to take prominence.

In recent years, WTI was most important for inland United States customers. This has often meant that WTI values were most indicative of U.S. Midwest prices—a fairly narrow field when considering the international scope of the business. Brent oil, on the other hand, comes from the North Sea, and has its destinations in European, West African, Mediterranean, and some Southeast Asian markets. This cosmopolitan array of customers has contributed to many seeing Brent as a more significant oil price benchmark than WTI.

Ties to Domestic Gas Prices

The influence of Brent over WTI pricing has been seen in domestic gas pricing as well. A recent study by the U.S. Energy Information Administration (EIA) indicated that Brent was more closely tied to the prices of gas in the U.S. Part of this is because of the role gasoline has played in international trade. Long before America lifted its crude oil export ban, gasoline was imported and exported as a globally traded commodity. The price of crude oil makes up a significant portion of the price of gasoline, reinforcing Brent as the indicator that best reflects gasoline prices.

Oil Export Ban Lift: Game Changer?

While the above factors are causing some analysts to sound the death knell for WTI, this may be premature. The gap that has frequently existed between WTI and Brent has recently been narrowed by the lift of the oil export ban. Many have thought the export ban was ultimately behind the vast differences between WTI and Brent prices. With the possible increase in global markets for U.S. oil, a number of analysts are predicting that WTI may make a comeback as an international benchmark for crude prices.

Southwest Parts for All Seasons

The fate of WTI is long from being decided, but no matter what benchmark is used, the industry relies on the finest quality parts and components to keep the oil flowing. At Southwest Process Controls, our full selection of fluid control devices continues to be a vital part of the most demanding oil-related applications. To find out more about our comprehensive selection or to get a quote, please contact us directly.

Quality Standards

One of the many world-changing effects of the Industrial Revolution was the development of comprehensive industrial standards.  Some of the earliest standardized parts included basic components like screws, which needed to have matching thread sizes for multiple different applications.  Individual companies often still had different standards from each other, however, which caused increasing difficulty in trade.  Engineers and architects had many individual ideas about the best weight and sizes for industrial components.  Not surprisingly, many disagreed with each other, causing widespread difficulties for companies that wanted to purchase components from other businesses.  It was this setting that brought about the first national standards body, the Engineering Standards Committee, in London, England back in 1901.

Well over a century later, the number of industrial standards has increased monumentally.  A variety of international organizations now contribute to the creation and overseeing of standards for industries of all different types.  These standards and regulations not only revolutionized the commerce of interchangeable parts, but also helped raise levels of safety worldwide of diverse components in all different areas.  Fluid system control products such as valves, gauges, and fittings are no exception.  While the industrial world has come a long way since industrial regulations and standards were first introduced, it is still essential for companies to know that the fluid system control products they purchase are of the highest quality and meet all appropriate standards and regulations.

There are many important regulatory organizations covering this area today.  The following covers some of the agencies that ensure every fluid and flow control product is safe, efficient, and works with a wide variety of different systems.

American National Standards Institute (ANSI): Founded in 1918, ANSI is a private non-profit that focuses on voluntary consensus standards for services, systems, products, and many other aspects of industrial production.  It oversees norms and guidelines that directly impact businesses across a wide variety of sectors.  ANSI originated as a combination of five engineering societies and three government agencies, and it retains its centralized role in setting industrial standards to this day.  By promoting voluntary consensus standards, ANSI plays a primary role in enhancing the global competitiveness of U.S. businesses while ensuring the safest, highest quality products and operations.

American Society of Mechanical Engineers (ASME): Also a non-profit industry, ASME predates ANSI by close to 40 years, with its original inception dating back to 1880.  This group was formed by a small group of industrialists and has grown to an organization that holds over 140,000 members in 151 countries.  It produces nearly 600 codes and standards that cover a broad range of technical areas, including fluid system control products.  ASME is also well known for its Performance Test Codes (PTC), which provide rules and procedures for the execution of performance test results at all levels.  This organization has maintained relevance throughout many years of changes on the industrial landscape, and plays a highly important role in the most cutting-edge engineering issues out there today.

American Petroleum Institute (API): The API represents the largest trade association for the oil & natural gas industry in the U.S.  The petroleum industry is a heavy user of flow control products that fall under the operating standards of the API.  The API has been developing equipment and standards for the oil and natural gas industries since 1924, with over 600 recommended standards and practices currently in place.  These standards help the petroleum industry on many levels.  They enhance safety operations and improve quality assurance.  API standards also improve the overall efficiency of operations, help plants comply with legislative requirements, and protect the environment.

International Organization for Standardization (ISO): Headquartered in Geneva, Switzerland, the ISO has promoted worldwide industrial standards since 1947.  The scope of the ISO is truly broad, with 165 nations out of the 206 total countries of the world participating.  Instrumental in facilitating international trade, the ISO is a voluntary organization that has published over 19,500 international standards covering almost every industry.  ISO certification has become widely known as a standard of quality and credibility for all different types of companies.  ISO 9001 and ISO 14001 certifications are issued by external certification bodies, demonstrating that accredited businesses are working at the highest level.  When companies follow ISO standards and receive certifications, they increase productivity, minimize waste, and ensure that their work is of the highest safety, reliability, and quality.

The above organizations, along with others, play a vital role in ensuring integrity of fluid control products.  The industrial standards developed over the years have vastly increased international trade, as well as ensured the safest, most efficient products.  At Southwest Process Controls, we distribute valves, fittings, and other fluid system control products that adhere to the standards of ANSI, ASME, API, and ISO, among others.  Our customers can rest assured that every product they order from us has passed the stringent standards of all relevant industrial standards and regulatory agencies.

2014 Offshore Technology Conference

Southwest Process Controls recently attended the 2014 Offshore Technology Conference, an event that brought over 100,000 people together to discuss groundbreaking innovations in offshore resources in drilling, exploration and production. This year’s conference was held in Houston, Texas and boasted the highest attendance rate in the history of the show.

The conference was an excellent opportunity for industry members to meet and discuss topics related to this year’s spotlight on New Technology. The schedule included a discussion on geo-ethics, the UK continental shelf and the latest offshore policy developments. The conference speakers were comprised of experienced industry experts, such as BP America CEO John Mingé and Shell VP Bill Henry, among others.

In keeping with its focus on new technology, OTC also distributed a dozen awards for innovative products in offshore exploration and production. Among the list of groundbreaking and innovative equipment were the ISOL-8 Pump from FMC Technologies and Zenith GFI™ Ground Fault Immune ESP Monitoring System from GE Oil & Gas. These award-winning products represent the future in offshore technology, with significant benefits and broad industry appeal.

At Southwest Process Controls, we are proud to have been a part of this successful annual event. As active members of the field, we are committed to supporting the industry’s continual growth and progress. We are also looking forward to keeping up with future developments at the South Texas Oilfield Expo and Permian Basin International Oil Show later this year.