Beyond Omniseal® Blog

Since 2014, the global oil and gas industry has been hit by downturns, leading to profound changes in the value chain for parts in oil and gas exploration—from end users, EPCs, service companies to OEMs, and finally components suppliers. Rystad Energy projects that about 800 of the 3,000 oil fields sanctioned from 2010 through 2014 have not been able to generate much value for E&P companies, due to large expenditures on large-scale, multi-year projects before gas and oil prices decreased. With the pivot to lower development costs from 2015 onwards, it forecasts that projects sanctioned over the last four years are in a much better financial state. With a key component in valve performance being seals, selecting a supplier with cost-effective and reliable sealing solutions is crucial to guaranteeing valve performance.

Natural gas production surged in 2018 (up over 5% and two times the historical trend), due in large part by growth in the U.S, as the top producer of petroleum in the world, followed by Russia and Saudi Arabia. Production and trade are on the rise with India being considered an emerging superpower, with its economy growing more quickly than, and its population expected to surpass, China in 2024, according to The United Nations.

India’s growing leadership position today is a contrast from the country’s economic situation in 2013. Rallying the country, Narendra Modi, the prime minister of India, made innovation and advancement a priority and launched the galvanizing “Make in India” initiative in 2014 to bring it and its supporters together.  Saint-Gobain Seals is also supporting with their new local Bangalore manufacturing site, critical seals and polymer parts, and design and application engineering expertise.

In our last oil and gas blog post, we discussed four key factors to consider when selecting sealing solutions: application, working conditions, compliance and fugitive emissions and proven design.  Behind these four factors are other design engineering elements that go into developing the seal to precisely fit and perform optimally in a certain environment.  Similar to the industry’s deeper investigation into complex downhole reserves and urgency to solve high pressure, high temperature (HPHT), cryogenic temperatures, heavy oil and other challenges, we are also delving deeper into an engineering element that may be overlooked or underestimated, which is how the right surface finish can make or break a seal’s ability to function properly. 

Four years ago, oil and gas exploration and production companies were at their lowest point as the industry collapsed with the steady lowering of oil prices. Digging deeper into their toolbox of resources, several in the upstream, midstream and downstream survived by figuring creative ways to cope as well as adopting new technologies. Their resilience paid off. In 2018, global oil demand reached its highest ever levels at 100 million barrels a day. Through innovative technologies that reduce costs and boost productivity, the U.S. is poised to surpass Saudi Arabia and Russia as the world's leading oil producer, hitting oil production highs of over 12 million barrels a day in February of this year. World Oil predicts 7.7% and 8.3% increases in drilling and footage in the Gulf of Mexico, respectively. Similarly, analyst firm Westwood says that after four years of decline, exploration in the Gulf is expected to go up by 30% in 2019. Key projects from oil and gas majors support this growth; Shell has announced its Appomattox from a Jurassic reservoir, BP says it will focus on the area with its Atlantis phase 3, and Chevron has committed to its ultra-high pressure Anchor project.