Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Drilling industry finding new ways to cut costs  Join our daily free Newsletter

MENAFN - Arab News - 02/02/2013

No. of Ratings : 0
Add to Mixx!


Caterpillar believes the price disconnect between petroleum and natural gas is here for the foreseeable future.
(MENAFN - Arab News) Oilfield services company Halliburton blamed the upfront cost of rolling out its "frac of the future" efficiency initiative, as well as lower rig rates and idled equipment, for shrinking margins in its North American business, when the company presented its Q4 results.

Frac (or frack as it also called) of the future maybe causing the company some discomfort in the short term. But it is a perfect case study of how the drilling industry is innovating in response to pressure to cut costs and its environmental footprint.

Working with Apache, a major gas producer, and Caterpillar, an equipment supplier, Halliburton has started to convert some of its pressure pumping units employed in fracturing operations to a dual-fuel system that uses compressed or liquefied natural gas as well as diesel as a source of power.

Natural gas is cleaner burning than diesel, allowing Halliburton to claim its dual-fuel system cuts carbon emissions and is more environmentally friendly.

Much more importantly, natural gas is plentiful and cheap, especially in the oil and gas producing regions, while oil is more than six times as expensive on a calorific basis, and diesel is the most expensive refined fuel of them all.

Converting pressure pumps to run on a gas-diesel mix is mutually beneficial for gas producers, who do not know what to do with all the gas currently coming out of the ground, and drilling companies, under pressure to show they can drill and complete wells more cheaply to cope with depressed US gas and increasingly oil prices.

Caterpillar's Dynamic Gas Blending (DGB) sets allow customers to use up to 70 percent natural gas in their existing diesel engines with no loss of performance, and can be retrofitted to existing equipment, according to the company.

The new DGB kits were specifically designed for petroleum operations, and were first released to customers in 2012. They have already been supplied to Halliburton and a range of other drilling and pumping companies.

Oilfield operations account for only a tiny fraction of total diesel demand. But Dynamic Gas Blending engines could in principle be used in a much wider range of industrial operations, providing another way for cheap gas to displace expensive oil in one of the liquid fuel's remaining core markets.
"Caterpillar believes the price disconnect between petroleum and natural gas is here for the foreseeable future.

(The company) sees natural gas as the future for high-horsepower applications - the higher the horsepower, the faster the adoption - and is betting that its commitment will pull the market along," the specialist website "Fleets and Fuels" reported in September.

"Large engines are going gas," a Caterpillar official associated with the program told a Houston conference. "It becomes economically suicidal not to do anything else.

Allowing for self-interested ebullience, there is clear interest in replacing expensive diesel with cheaper gas in a wide range of applications."
Frac of the future is also introducing vertical storage silos for storing the frac sand (proppant) employed in fracking operations.

Rather grandly named the "SandCastle PS-2500 Vertical Storage System," which at least shows someone at the company has a sense of humor, it minimizes the amount of ground space by the simple expedient of storing the frac sand in a vertical tower, with solar power providing all the operating power needs for the unit.

It is a prosaic innovation. But fracking firms are under intense pressure to drill and frack more wells from fewer and smaller pads. SandCastle is just one example of numerous large and small operational improvements drilling and fracking firms are introducing in the field to squeeze costs out of the process.

They come in response to pressure from clients worried about the continued economics of exploration in a world where gas prices are already low and oil and liquids prices are coming under pressure and likely to fall in future. Necessity (in this case low natural gas prices) is again proving the mother of invention.


  MENA News Headlines
Apr 16 2014Air Arabia takes over as RAK official carrier ,MENAFN
(MENAFN) Air Arabia said that it will commence flights from Ras Al Khaimah (RAK) early next month, Arabian Business reported. The Sharjah-based carrier said that it will take over from RAK ...

Apr 16 2014Dubai Metro passengers hit 40.5m in Q1 ,MENAFN
(MENAFN) Passenger traffic on Dubai's Metro increased to more than 40.5 million in the January-March period of this year, Arabian Business repoted. The Roads and Transport Authority (RTA) said ...

Apr 16 2014Etihad, Fiji Airways ink codeshare deal ,MENAFN
(MENAFN) Etihad Airways and Fiji Airways have signed a codesharing agreement which allows reciprocal ticket sales between them, Arabian Business reported. Etihad said that the revenue from ...

Apr 16 2014Qatar's investments in infrastructure worth USD182.21 b ,MENAFN
(MENAFN) Qatar is planning to invest USD182.21 billion in infrastructure, avoiding projects in oil and gas sector, in the next five years, Minister of Economy and trade said yesterday, The Peninsula ...

Apr 16 2014Kuwait- GIC chief participates in ABANA Summit panel discussions ,Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Shafic Ali, head of the Principal Investments Group at Gulf Investment Corporation (GIC) late Tuesday participated in a panel discussion on (Emerging Trends in ...

Apr 16 2014Today in Kuwait's history ,Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) 1961 -- First edition of "Al-Rai Al-Aam" newspaper hit the stands. 1962 -- Kuwait joined the United Nations (UN) Commission on Narcotic Drugs. 1972 -- The Amir ...

Apr 16 2014EU voices concern over increase of terrorist attacks in Nigeria ,Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) EU High Representative for foreign affairs and security policy Catherine Ashton late Tuesday "strongly condemned" the abduction of more than 100 school girls in ...

Apr 16 2014Reporters Without Borders says three more pressmen killed in Syria ,Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Three more journalists have been killed by gunfire in the Syrian town of Maaloula, north of the capital Damascus, press freedom organisation Reporters Without ...

Apr 16 2014Three-day Sports Media Seminar begins in Doha ,The Peninsula
(MENAFN - The Peninsula) A group photograph of Arab sports journalists seen with TV personality Saad Al Rumaihi, Mohammed Al Malki, President of Qatar Press Sports Committee (QPSC), at Marriott Hotel ...

Apr 16 2014Prisoner's freedom sought for abducted Jordan ambassador ,Arab News
(MENAFN - Arab News) Tripoli: jordan's ambassador to libya was kidnapped on tuesday by gunmen who demanded a radical militant be released from a jordanian jail in exchange for the diplomat's ...

Apr 16 2014Saudi- Qur'an contest to be held in Jeddah next month ,Arab News
(MENAFN - Arab News) The saudi society of the holy qur'an and its sciences (tibyan) is going to hold a qur'an contest involving 60 universities from the public and private sectors next month in ...

Apr 16 2014Saudi- Philippines participates in Riyadh Travel Fair ,Arab News
(MENAFN - Arab News) The riyadh travel fair kicks off here in the kingdom tower on tudesday.the philippines will be represented by the department of tourism (dot) representatives glenn raymond ...

Apr 16 2014Saudi- New arbitration center hailed by leading figures ,Arab News
(MENAFN - Arab News) Lawyers legal arbitrators and businessmen described the decision to establish a saudi commercial arbitration center which was approved by the council of ministers in its ...

Apr 16 2014Saudi- Prices of fruits vegetables in Jeddah rise ,Arab News
(MENAFN - Arab News) There has been a 50-percent increase in the price of fruits and vegetables over the past 10 days due to an imbalance in supply and demand said esmat abuzinada head of ...

Apr 16 2014Private schools urged to use fingerprint systems ,Arab News
(MENAFN - Arab News) A number of public schools have applied the biometrics attendance system on students in line with the ministry of education's new regulation.the new system electronically ...

Apr 16 2014Saudi- Exhibit to showcase 1000 paintings ,Arab News
(MENAFN - Arab News) Arabian wings (aw) will kick off fiesta 1000 a display of 1000 paintings in jeddah on thursday at the al-furusya yacht club. 'the project has received support from different ...

Apr 16 2014Saudi- Technology remains core criteria for university education ,Arab News
(MENAFN - Arab News) Technology has become a core component at higher education institutions said higher education minister khaled al-anqari on tuesday during the opening address of the fifth ...

Apr 16 2014Saudi- Sponsors to pay fines for illegals ,Arab News
(MENAFN - Arab News) The labor ministry on tuesday announced extra measures to stop illegal visa trade and streamline the labor market. a senior official said saudi sponsors involved in the ...

Apr 16 2014Mentally ill kills family of 4 before ending life ,Arab News
(MENAFN - Arab News) A sudanese man his wife and three children were found dead in their apartment in riyadh on monday the police said.'preliminary investigations showed that the 46-year-old head ...

Apr 16 2014'My Saudi posting was a blessing from God' ,Arab News
(MENAFN - Arab News) Outgoing indian consul general faiz ahmed kidwai who is leaving after serving here for three years says it was a 'blessing from god" to have had a posting in saudi arabia.in a ...


Click to Apply



Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Investment Game
Economic Calendar
Financial Glossary

Portfolio Tracker


Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help