May 11, 2015

Drillers Answer Low Oil Prices With Cost-Saving Innovations

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May 11th, 2015 | New York Times | Clifford Krauss

Oil prices have dropped significantly, but oil companies are keeping production up with new drilling techniques. The New York Times reports from the Eagle Ford shale field, where Statoil of Norway is testing oil wells. “There’s a proverb in Norway that says necessity teaches the naked woman how to knit,” said Bjorn Otto Sverdrup, a Statoil vice president.

In the wake of last summer’s oil price dive, thousands of workers have been laid off and hundreds of wells have been left incomplete. Companies like Anadarko Petroleum are waiting for an industry recovery before investing more money on nonessential projects. This slowdown has not halted production. Utilizing rigs that move on tracks or legs, companies can drill several wells at a time. Oil companies have also fixed their eye on getting more out of each well they drill.

While larger companies, like Statoil, are able to weather the storm with innovation, smaller oil companies may have a harder time, as reported by Inside Energy’s Emily Guerin at the beginning of the crash. Companies like BP, Chevron and Devon Energy are partnering with General Electric’s oil and gas division. These companies are looking for better ways to save power and increase equipment efficiency.