Tag: ammonia

 U.S. crude oil refinery inputs averaged 15.3 million barrels per day (b/d) during the week ending Jan. 31, 159,000 b/d more than the previous week’s average, according to the weekly report issued by the U.S. Energy Information Administration (EIA) on Wednesday.

Refineries operated at 84.5 percent of their operable capacity last week, said the Weekly Petroleum Data Report.

During the same period, both gasoline and distillate fuel production declined, averaging 9.2 million b/d and 4.6 million b/d respectively.

U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, surged by 8.7 million barrels from the previous week to 423.8 million barrels, about 5 percent below the five-year average for this time of year.

Total motor gasoline inventories rose by 2.2 million barrels last week, slightly above the five-year average for this time of year.

Finished gasoline inventories went down while blending components inventories went up last week.

Distillate fuel inventories dropped by 5.5 million barrels last week, around 12 percent below the five-year average for this time of year.

Propane/propylene inventories shrank by 4.8 million barrels last week, 2 percent below the five-year average for this time of year.

Total commercial petroleum inventories went down by 2.7 million barrels last week.

Total products supplied over the last four-week period averaged 20.6 million b/d, up by 3.3 percent from the same period last year.

Over the past four weeks, motor gasoline product supplied averaged 8.3 million b/d, down by 0.2 percent from the same period last year.

Distillate fuel product supplied averaged 4.3 million b/d over the past four weeks, up by 13.7 percent from the same period last year.

Jet fuel product supplied was up 4.6 percent compared with the same four-week period last year. 

By: Xinhua / February  19, 2025

Canadian pipeline operator Trans Mountain said it expects to see increased interest to ship on its system if the United States slaps tariffs on Cana*dian oil imports in a month.

The pipeline, which can carry up to 890,000 barrels per day of crude from Alberta to Canada’s Pacific Coast, has been about 80% utilized, with about 20% capacity available for spot shipping at more expensive rate.

While exports of crude oil that flowed through Trans Mountain’s pipelines represented only 9% of Canada’s total crude exports, it has come in the spotlight after U.S. Presi-*ent Donald Trump said he would slap 10% tariffs on Canadian oil imports by the United States.

The tariffs, which were due to take effect on Tuesday, were paused for 30 days on Monday.

Nearly all of Canada’s oil exports – some 4 million barrels per day – head to the United States to be processed by refiners or re-exported from U.S. Gulf Coast ports to Asia.

The Trans Mountain pipeline expansion, which started operations in May, provided Canada an alternative route to export more volumes of crude directly, primarily to Asia, and reduced the country’s reliance on the United States.

“We anticipate there will be increased interest to ship on our system in the face of U.S. tariffs, but it is too early to predict what the volumes will be,” Trans Mountain said in an emailed statement.

Deliveries to Asia are also likely to increase, the company said, adding that deeper discounts for Canadian crude were likely.

The company said it was investigating ways to improve the throughput efficiency and increase the capacity of the expanded system, ideally in the next four to five years under the current regulatory regime.

Exports from Vancouver averaged about 370,000 barrels per day in the last eight months, according to data from ship tracking firm Kpler. About 51% of that headed to Asia, primarily China, in 2024, while the rest went to the United States.

By Reuters / February 4, 2025

Dutch tank storage group Vopak (VOPA.AS), opens new tab said on Wednesday it expected to see little change in 2025 earnings, even as strong demand for energy storage infrastructure buoys its results.

“Gas terminals performance showed firm throughput levels, backed by growing energy demand and energy security considerations around the globe,” Vopak said in a statement.

Shares of the company, which operates terminals and storage facilities for fuels and chemicals worldwide, fell 7% by 0927 GMT, with analysts citing a quarterly core profit miss and a cautious outlook.

For the final quarter of 2024, Vopak flagged a negative one-off effect related to technical issues at one of its LNG terminals in the Netherlands, and an impairment in Mexico due to local legislation significantly reducing imports of crude oil and related products.

“The impact of these items will continue into FY25 and have led to a cautious outlook for FY25,” ING analysts wrote in a note to clients.

Fuel distribution is difficult in Mexico at the moment and the limited amount of permits has resulted in empty capacity there, Vopak’s finance chief Michiel Gilsing told Reuters.

“We invested six years ago to an amount of 58 million euros so there was a significant write off,” Gilsing said.

A policy shift under the current administration is unlikely, he added, which means continued negative market outlook for imports of clean petroleum products into Mexico.

Vopak expects its proportional earnings before interest, taxes, depreciation and amortisation (EBITDA) to land between 1.15 billion and 1.20 billion euros in 2025.

The metric grew by 9% to 1.17 billion euros ($1.22 billion) in 2024, but fell 2% to 277 million in the fourth quarter.

Vopak said it would launch a share buyback of up to 100 million euros on Thursday and propose a dividend of 1.60 euros per share, thanks to its strong cash generation.

By Alban Kacher and Anna Peverieri, Reuters / February 19, 2025

U.S. gasoline prices have resumed their uptrend, with AAA reporting the national average at $3.161 per gallon of regular compared to $3.139 a week ago and $3.115 a month ago. The national average price of diesel has increased 0.8 cents and now stands at $3.632 per gallon.

“The national average has inched higher, driven primarily by sharp gas price increases on the West Coast, where refinery maintenance and outages have created a ripple effect in neighboring states, pushing prices higher in many communities,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “While most of the country has experienced a relatively quiet week for gas prices, the West Coast has seen rapid increases — a trend that should slow in the coming days. Although the surge remains isolated to the West for now, refinery maintenance will soon begin in other regions, and with the transition to summer gasoline blends underway, prices in most areas are likely to start rising in the weeks ahead. Meanwhile, oil prices remain subdued in the low $70s as President Trump works on a potential peace deal between Russia and Ukraine — an event that, if realized, could have significant implications for oil markets in the months ahead.”

The oil price selloff accelerated last week after U.S. President Donald Trump took the first big step towards ending Russia’s war in Ukraine three weeks after his inauguration. However, oil prices edged higher on Monday: Brent crude for April delivery rose 0.2% to trade at $74.92 per barrel at 10.50 am  ET, while WTI crude for March delivery was up 0.4% to change hands at $71.03 per barrel. 

On social media, Trump said he and Putin “agreed to have our respective teams start negotiations immediately, and we will begin by calling President Zelenskiy, of Ukraine, to inform him of the conversation, something which I will be doing right now.”

A ceasefire to the Russia-Ukraine war could be bearish for oil prices if Trump pushes for the removal of sanctions on the Russian energy industry, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Geopolitical stability may also “largely extinguish the still simmering ‘fear bid’ in the oil market.” 

By : Alex Kimani for Oilprice.com / Feb 17, 2025.

Energy transition presents a massive opportunity for the project supply chain to drive innovation and efficiency, but success rests on early collaboration between stakeholders, listeners were told during a panel session at Breakbulk Middle East.

Tim Killen, head of growth for projects at Fracht Group, said logistics providers were “excited” about the opportunities and challenges emerging from the global switch to cleaner energies. The industry had a “proven track record” of adding value to all aspects of the project process.

“We saw in the wind sector how it took many years to identify, learn and then implement the efficiencies that are needed in order to be able to drive down the delivered cost of logistics for those projects. And our appetite for engagement in energy transition is significant,” he said.

“From pre-FEED and FEED, then solution design and into implementation, with all those new commodities, clients and supply chains that are going to be created, there’s an opportunity for us to innovate when it comes to different logistics solutions, different handling methods and the different equipment types that are going to be needed.”

Juma Al Maskari, director of Asyad Logistics, a division of Oman’s state-led Asyad Group, said having a seat at the table early on was “crucial”. Maskari pointed to Oman’s potential to become one of the world’s leading green hydrogen producers.

“Oman is very ambitious when it comes to this industry,” he said. “We have already given eight concessions around Oman with a total area of 50,000 square kilometers. This translates roughly into about 2,000 wind turbines and 40 million solar panels.”

But, he added, concession areas are located on average 500 kilometers inland from Oman’s ports, with routes often crossing oilfield concessions. Transporting out-of-gauge cargo therefore requires collaboration between EPCs, traffic control authorities and drilling firms.

“A simple mistake can become extremely expensive. You could have the ship owner unable to offload because the port is congested or trucks that cannot get through to the construction site. Things can go wrong, and you need to be it prepared for it.”

Torben Berger, director of business development at United Heavy Lift, told listeners that energy transition was driving growth for carriers, with 60% to 70% of the cargo transported by UHL related to renewable energy projects.

“Early engagement is also key from our point of view,” Berger said. “With all carriers you have engineers, and it’s very important for them to engage and understand where to put the lifting points, the lashing points, to know if there’s a possibility to optimize the module sizes for onshore and offshore transportation.”

Killen noted that over his three decades in the industry, project lead times had increased from about four months to 18 months, significantly raising the demand for contributions from logistics providers.

“As an industry we need to make sure we have the capacity and resources within our organization to plan, design and then deliver these projects in the right way,” Killen said.

Middle East Energy Transition Still Nascent

Iman Nasseri, managing director for the Middle East at energy consultancy FGE Dubai, had opened the discussion by saying that energy transition projects in the region – with the exception of solar – had been slower to gain momentum compared with other regions, with the project mix still dominated by fossil fuels.

“Over 90% of Middle East energy investments in 2023 were in the oil and gas sector. And this trend is not slowing,” he said. Part of the problem has been the lack of projects reaching final investment decision (FID), echoing comments made by the EIC’s Ryan McPherson in an earlier presentation.

He continued: “But I think we’re at the beginning of a curve. Percentage growth numbers are encouraging even if absolute numbers are perhaps not.

Session moderator Vineet Bakshi, regional director of logistics at Fluor, was bullish on the region’s outlook, highlighting an estimated US$50 billion spend on energy transition projects by the end of the decade.

“This includes possible US$5 billion in technologies such as carbon capture, maybe another US$5 billion in battery storage and energy system projects,” he said. “These new technologies are actually changing the way projects used to happen and the way logistics service providers used to traditionally work.”

By: Simon West, Breakbulk / Feb 17, 2025

OPEC+ producers are not considering delaying a series of monthly oil supply increases that is scheduled to begin in April, Russian Deputy Prime Minister Alexander Novak said on Monday, Russia’s RIA state news agency reported.

Bloomberg News reported on Monday, citing delegates, that OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, was examining whether to postpone the supply increases, despite calls from U.S. President Donald Trump to lower oil prices.

Three OPEC+ delegates told Reuters that so far there had been no discussion on delaying the increase. One of them said the oil market may be able to absorb extra supply from April as a result of tougher sanctions and higher Chinese demand, although it was too early to make that call.

All sources declined to be identified by name.

Some analysts, such as Morgan Stanley, have said they expect OPEC+ to extend its current output levels again. OPEC and the Saudi government communications office did not immediately respond to requests for comment.

OPEC+ is cutting output by 5.85 million barrels per day (bpd), equal to about 5.7% of global supply, agreed in a series of steps since 2022.

In December, OPEC+ extended its latest layer of cuts through the first quarter of 2025, pushing back the plan to begin raising output to April. The extension was the latest of several delays due to weak demand and rising supply outside the group.

Based on that plan, the unwinding of 2.2 million bpd of cuts – the most recent layer – and the start of an increase for the United Arab Emirates, begins in April with a monthly rise of 138,000 bpd, according to Reuters calculations.

The hikes will last until September 2026. Based on OPEC+’s previous practice, a final decision to go ahead with the April increase is expected around early March.

By Reuters / February 17, 2025

California policymakers are considering state ownership of one or more oil refineries to ensure a reliable supply of gasoline as the number of refineries in the state declines.

An oil industry trade group questions whether the state would have the expertise to effectively run a refinery, citing a lack of “understanding of the industry and how it works.”

Russia. China. Venezuela. Iran. More than a dozen countries make gasoline at state-owned refineries.

Could California be next on the list?

California policymakers are considering state ownership of one or more oil refineries, one item on a list of options presented by the California Energy Commission to ensure steady gas supplies as oil companies pull back from the refinery business in the state.

“The state recognizes that they’re on a pathway to more refinery closures,” said Skip York, chief energy strategist at energy consultant Turner Mason & Co. The risk to consumers and the state’s economy, he said, is gasoline supply disappearing faster than consumer demand, resulting in fuel shortages, higher prices and severe logistical challenges.

Gasoline demand is falling in California, albeit slowly, for two reasons: more efficient gasoline engines, and the increasing number of electric vehicles on the road. Gasoline consumption in California peaked in 2005 and fell 15% through 2023, according to the Union of Concerned Scientists.

Electric vehicles, including plug-in hybrids, now represent about 25% of annual new car sales. By state mandate, new sales of gasoline cars and light trucks will be banned starting in model year 2035.

The drop in demand is causing fundamental strategic shifts among the state’s major oil refiners: Chevron, Marathon, Phillips 66, PBF Energy and Valero.

Already, two California refineries have ceased producing gasoline to make biodiesel fuel for use in heavy-duty trucks, a cleaner-fuel alternative that enjoys rich state subsidies. More worrisome, the Phillips 66 refinery complex in Wilmington, just outside Los Angeles, plans to close down permanently by year’s end.

That leaves eight major refineries in California capable of producing gasoline. The closure of any one would create serious gasoline supply issues, industry analysts say. But both Chevron and Valero are contemplating permanent refinery closures.

The implications? “Demand will decline gradually,” York said, “but supply will fall out in chunks.” What’s unknown is how many refineries will close, and how soon, and how that will affect supply and demand.

That puts the state in a tough position, according to York. “Even if you had perfect foresight, it would be hard to get the timing right.”

A state refinery takeover seems like a radical idea, but the fact that it’s being considered demonstrates the seriousness of the supply issue.

It’s one of several options laid out by the California Energy Commission, which is fulfilling a legislative order to find ways to ensure “a reliable supply of affordable and safe transportation fuels in California.”

The options list is disparate: Ship in more gasoline from Asia; regulate refineries on the order of electric utilities; cap profit margins; and many more.

The list was due to be transformed into a formal transition plan by Dec. 31, 2024, but six weeks later no plan has been issued. Therefore, it’s not yet clear what the state response will be if another refinery announces a shutdown this year or next.

California is known as a “gasoline island” lacking the kind of multistate logistics network through most of the continental U.S. that can help alleviate supply shocks. No pipelines exist to feed gasoline in from other states. Ocean shipments from the refinery-rich gulf states are restricted by an antiquated federal law known as the Jones Act. Gasoline imports add up to only 8% of California supply. The other 92% is nearly all produced at California refineries.

Further complicating matters: the special blends of gasoline required in California. Those required formulations have gone a long way toward reducing air pollution. But they also drive up gasoline prices and raise the risk of shortages, because little such gasoline is produced outside California.

The Western States Petroleum Assn. lobby group warns that state involvement in refinery ownership or management would be difficult.

“This is a very complex and hard business to run,” the group said in a statement. “There are commercial barriers and technical barriers that take a comprehensive and holistic understanding of the industry, and how it works.”

Asked about the potential for state-owned refineries, Gov. Gavin Newsom’s office referred questions to the state energy commission but issued a statement saying California “is engaged in meaningful and thoughtful policy work to successfully manage our transition away from fossil fuels over the next 20 years, not overnight.”

In a statement, the energy commission acknowledged that “there are many challenges to overcome” with a state-owned refinery, “including the high cost to purchase and operate, the skilled labor and expertise necessary to manage refinery operations, and how the refinery would fit into the state’s transition away from petroleum fuels.”

James Gallagher, the Assembly Republican leader from Yuba City, says California isn’t moving quickly enough to address potential gasoline shortages.

“We’re starting to lose refineries because we’ve made it so expensive and impossible to operate in California,” he said. “Now, after we’ve chased them off, we’re talking about taking them over to ensure there’s some supply. We’re moving toward price controls and government takeover of industries. That’s never worked very well in the history of the world.”

State Senate Minority Leader Brian Jones (R-Santee) agreed: “The state has no business being in the oil refinery business,” he said.

Their Democratic counterparts, Assembly Speaker Robert Rivas (D-Hollister) and Senate President Pro Tem Mike McGuire (D-Sonoma), declined to be interviewed.

Talk of further refinery closures over the next couple of years is heating up. In a conference call with investors last year, shortly after the Phillips 66 announcement, Valero Chief Executive Lane Riggs responded to concerns about the company closing either of its two California refineries.

“All options are on the table,” he said. “Clearly, the California regulatory environment is putting pressure on operators out there and how they might think about going forward with their operations.”

Chevron, a California company since 1879, last year announced that it was moving its headquarters to Texas. The company has considered ceasing production at one or both of its California refineries, the Wall Street Journal recently reported, which Chevron confirmed in a statement to The Times.

“Recent California policies, like banning the sale of new internal combustion engine vehicles by 2035, the potential tax/penalty on refinery profits and the potential new minimum storage requirement are all headwinds to our business and erode our confidence going forward,” Andy Walz, Chevron’s president of downstream, midstream and chemicals, said in the statement.

Jones said while he’s not sure the state-owned refinery option is a serious proposal, it’s on the options list, and the looming supply issue is real. “I’m not sure all Californians have grasped the impending urgency of the situation,” he said.

“I think what we probably need is to build another refinery here in the state,” Jones said. Otherwise, when refineries close, gasoline demand would have to be met by gasoline imports, mostly by ship, from Asia.

“People freak out about the environmental impacts of crude oil shipments,” Jones said. “But no one’s freaking out about the environmental impacts of gasoline imports.”

By Russ Mitchell, Los Angeles Times / Feb. 16, 2025 

The oil and gas industry pulls in a massive $4.3 trillion in revenue as of 2023. AI in oil and gas is a vital technology that keeps this enormous operation running smoothly. Most companies in this sector – over 92% – are already investing in artificial intelligence or plan to do so soon.

This widespread adoption has pushed the AI market in oil and gas toward significant growth. Experts project an increase from $3.14 billion in 2024 to $5.7 billion by 2029. Companies see impressive results already, with AI integration reducing operational costs by up to 20%. Shell’s experience shows how predictive maintenance helps cut unplanned downtime by 20% and slashes maintenance costs by 15%.

This piece will show how AI transforms equipment maintenance in the oil and gas industry. You’ll learn why it has become essential to prevent failures that can get pricey.

The True Cost of Equipment Failures in Oil and Gas

Equipment failures in oil and gas operations devastate finances industry-wide. A single hour of downtime now costs oil and gas facilities nearly $500,000. This amount has more than doubled from what it was two years ago.

Annual Industry Losses from Unplanned Downtime

Equipment failures have pushed financial losses to new heights. Fortune Global 500 industrial organizations lose about $1.5 trillion each year due to unplanned downtime. These losses make up 11% of their yearly turnover. Oil and gas facilities now face yearly losses of $149 million from unplanned downtime. This represents a dramatic 76% increase over the last several years.

Short interruptions can get pricey. Just 1% downtime (3.65 days) leads to annual losses of over $5 million. Upstream companies face an average of 27 days of unplanned downtime yearly. This results in costs reaching $38 million.

Hidden Costs Beyond Equipment Repair

Equipment failures affect businesses way beyond the reach of immediate repair costs. These hidden costs include:*Workers and operations sitting idle, leading to lost productivity

Spills and leaks causing environmental damage

Penalties from regulators and legal issues

Disrupted supply chains affecting downstream customers

Damaged brand reputation and lost customer trust

Supply chain disruptions hit oil and gas operations hard. These facilities produce raw materials that many industries need. Equipment failures trigger heavy contractual penalties. Early-stage producers face the worst financial fallout as these penalties cascade down the supply chain.

The Norilsk diesel oil spill in Russia (May 2020) shows these far-reaching effects. An equipment failure caused 17,500 tons of diesel oil to pollute nearby rivers. This led to massive environmental damage and cleanup costs.

Companies now realize that traditional time-based maintenance doesn’t cut it anymore. They spend up to 20% of their operational budgets on unplanned maintenance. Rising downtime costs and this big spending show why predictive maintenance is vital to prevent catastrophic failures in the oil and gas industry.

Building the AI-Powered Early Warning System

AI-powered early warning systems in oil and gas operations now depend on advanced sensor networks and data processing frameworks. These systems analyze operational conditions without stopping. They can detect equipment failures hours or even days before they happen.

Required Sensor Infrastructure

A complete sensor network serves as the foundation for predictive maintenance systems. Smart sensors must be embedded throughout oil and gas sites to track critical parameters. These sensors monitor several equipment conditions:

Temperature fluctuations and hotspots

Vibration patterns and acoustic signals

Pressure variations and fluid levels

Rotational speed measurements

Equipment voltage fluctuations

Data Collection Framework

The data collection process works through a two-stage historian system. The offshore historian stores immediate operational data to ensure quick access for urgent analysis. This information then moves to an onshore historian for complete review and long-term storage.

A dedicated data pipeline moves the collected information to cloud environments regularly. The system also combines event-based data from Computerized Maintenance Management Systems (CMMS) and daily progress reports to boost predictive model accuracy.

Real-time Monitoring Setup

The monitoring system analyzes data streams immediately and spots subtle anomalies that could signal developing problems. Computer vision technologies get into equipment conditions through video feeds and add another layer of monitoring capability.

Condition-based monitoring helps the system watch over critical equipment like drilling rigs and pipelines. The system triggers maintenance alerts when readings show a performance decline. This proactive approach prevents equipment failures. Some systems can send warnings up to one full hour before potential breakdowns.

Machine learning algorithms process big amounts of sensor data to create detailed models of equipment health. These models are remarkably accurate – reaching up to 92% in predicting potential failures. The AI system spots irregularities that human operators might miss by analyzing operational patterns continuously. This allows timely interventions before small issues become major failures.

Implementing Predictive Maintenance with AI

Oil and gas facilities need to pay close attention to data quality and system architecture for predictive maintenance to work. Studies show that poor data quality causes 80% of AI project failures in industrial settings.

Data Quality Requirements

Quality data is the lifeblood of predictive maintenance systems. Oil and gas companies must meet specific criteria for AI implementation. Raw sensor data needs proper cleaning and preprocessing. This includes normalizing and standardizing measurements across different sensors.

Data validation processes must verify the integrity of these data sources:

Sensor readings from equipment

Maintenance logs and historical records

Operational data from legacy systems

Environmental condition measurements

Yes, it is essential to have strong data quality management. This helps prevent AI “hallucinations” – incorrect or misleading predictions that happen when models train on poor quality data.

Machine Learning Model Selection

We selected machine learning algorithms based on the specific failure modes under monitoring. Decision trees and random forests work best at spotting clear patterns in equipment behavior. Neural networks handle complex, non-linear relationships in operational data more effectively.

Historical data is split into two parts to train these models. The split typically uses 70-80% for training and 20-30% for testing. Notwithstanding that, the model’s performance needs constant evaluation. Metrics like accuracy, precision, and recall ensure reliable predictions.

Integration with Existing Systems

The integration phase creates major challenges due to aging infrastructure and legacy systems in oil and gas facilities. AI implementations often hit roadblocks with data silos and incompatible formats across operational technologies.

Trailblazing solutions include data integration platforms and middleware that connect modern AI systems with existing infrastructure. Research indicates that oil and gas companies invest heavily to ensure uninterrupted communication between predictive maintenance systems and legacy equipment.

Performance monitoring plays a significant role after implementation. The system needs regular recalibration as new failure data comes in. This ensures AI models adapt to changing operational conditions. Such ongoing optimization helps companies cut maintenance costs by up to 40% by preventing unplanned downtime.

Real-World Success Stories and ROI

Oil and gas giants have seen amazing returns after adding AI to their maintenance operations. Their success stories show how predictive maintenance systems work in the real world.

Shell’s 40% Reduction in Downtime

Shell’s experience with AI focuses on equipment monitoring and maintenance optimization. Their system processes over 20 billion rows of data weekly from more than 3 million data streams. The company keeps track of more than 10,000 equipment pieces using AI-powered predictive maintenance. This generates over 15 million predictions each day.

The results speak for themselves:

40% reduction in equipment failure-related incidents

20% decrease in maintenance costs, saving about $2 billion each year

35% reduction in unplanned downtime, which led to a 5% boost in operational uptime

Shell’s Netherlands refinery’s AI system spotted 65 control valves that needed repair. Traditional methods had missed these issues. This early detection stopped potential hydrocarbon breakthroughs downstream and ended up avoiding production losses and environmental risks.

BP’s $10M Annual Savings

BP has cut costs significantly through its AI projects. The company put $5 million into Belmont Technology’s AI platform “Sandy.” This platform aims to cut data collection, interpretation, and simulation time by 90%.

The investment paid off well as BP grew its AI capabilities worldwide. Their digital platform looks at live data to optimize energy asset performance. This created big savings through better flexibility and improved renewable generation management.

BP looks beyond just saving money with AI. They bought AI-driven energy optimization company Open Energi. Their Dynamic Demand 2.0 platform uses artificial intelligence to cut electricity costs. The system analyzes and optimizes assets while reducing energy use during expensive peak periods.

These AI solutions help BP keep electricity grids stable and make use of low-carbon energy resources. Their AI-optimized energy asset network now handles over 80MW of total capacity. This shows how predictive maintenance and broader operational improvements work together to deliver great returns on investment.

Overcoming Implementation Challenges

AI systems in oil and gas operations come with unique challenges that we just need to think over and plan carefully. The benefits are huge, but companies must tackle several critical aspects for successful deployment.

Data Security Concerns

Oil and gas companies face their biggest problem in cybersecurity as they connect AI systems with critical infrastructure. AI systems’ interconnected nature creates weak spots that bad actors might exploit. Companies must build strong security measures to keep sensitive operational data safe.

Key security challenges include:

Data pipeline attacks can harm the whole data collection and training process

Model control attacks where malware can mess with decision-making processes

Supply chain weak points through third-party software components

Companies alleviate these risks with detailed security protocols. They run regular security checks, encrypt sensitive data, and watch system access closely. They also stay compliant with industry rules while protecting data privacy.

Staff Training Requirements

The lack of experts who know both AI and oil and gas operations creates a tough challenge. Right now, 29% of executives say their core team’s knowledge gap is what holds back AI implementation.

A good training program has:

Technical training for specific AI tools and applications

Knowledge of oil and gas processes

Cybersecurity awareness and best practices

Data quality management protocols

We focused on improving existing employees’ skills through mutually beneficial alliances with educational institutions. This helps fill the talent gap while keeping industry knowledge intact. The companies also create training programs to help staff understand what AI can and cannot do.

Budget Allocation Strategy

AI implementation needs smart budget planning because of its high costs. The original expenses include software, hardware, training programs, and maintenance. Companies must get a full picture of the costs and benefits to back these investments.

A smooth budget allocation covers:

1. Infrastructure Investment

Sensor deployment and maintenance

Data storage and processing capabilities

Security system implementation

2. Operational Costs

Staff training and development

System maintenance and updates

Data quality management

3. Risk Management

Cybersecurity measures

Compliance requirements

Contingency planning

Companies can make their budgets work better with live analytics that shows accurate projections based on past and current data. This helps them prepare for different maintenance scenarios and adjust their budgets.

The implementation works best when companies watch their budget performance and get automatic alerts if spending goes over set limits. Budget plans need to stay flexible to handle new challenges and opportunities in AI implementation.

Conclusion

AI-powered predictive maintenance is revolutionizing how the oil and gas industry handles equipment failures. Companies now detect potential breakdowns days in advance through sensor networks and machine learning algorithms. This technology helps reduce the $1.5 trillion yearly losses caused by unexpected downtime.

Industry leaders have already proven the remarkable benefits. Shell reported 40% fewer equipment failures, while BP saves $10 million every year. These results come from well-planned implementation strategies that focus on quality data collection, proper model selection and system integration.

The oil and gas sector keeps moving toward AI-driven maintenance solutions despite concerns about cybersecurity, staff training and budgets. Companies that tackle these challenges while keeping strong security measures and detailed training programs can prevent expensive failures before they hurt operations.

This move to predictive maintenance is changing oil and gas operations fundamentally. A single hour of prevented downtime saves up to $500,000. Companies that use these solutions as sensor technology and AI capabilities improve will gain competitive edges and protect their assets and environment better.

By: Energies Media Staff / February 8, 2025.

A group of EU member states that have the largest natural gas storage capacity have held informal discussions about a potential easing of the binding filling targets after 2025, officials have told Bloom-berg.

In the wake of the 2022 Russian invasion of Ukraine and the halt to Russian pipeline gas supply to most EU countries, the European Commission adopted a target for EU natural gas storage levels to be 90% full by November 1 of each year, ahead of the winter. There are also intermediate targets for February 1, May 1, July 1, and September 1, 2025, as the EU looks to be prepared for the winter gas demand with nearly full storage sites.

However, policymakers in a group of EU countries, including Germany, Italy, and the Netherlands, are concerned that the high forward gas prices for the summer months would make it unprofitable for gas companies and marketers to store gas.

Federico Boschi, chief of the energy department at Italy’s Ministry of Environment and Energy, told Bloomberg that Italy would consider requests from other EU member states, including Germany. Italy could support easing of the targets, Boschi added.

Pieter ten Bruggencate, spokesperson for the Dutch energy ministry, told Bloomberg that the Netherlands would back an ambition rather than a target for gas storage.

France, Germany, and the Czech Republic are also in the group of countries that have discussed easing of the targets, according to ten Bruggencate.

Meanwhile, the European Union is considering extending the binding natural gas storage targets for EU member states for at least another year after the current goals expire at the end of 2025, EU diplomats told Reuters at the end of last month.

Ahead of this winter, EU gas storage was around 95% by the deadline of 1 November.

However, colder winter weather – unlike the previous two milder winters – and periods of low wind speeds in most of northwest Europe have been draining EU storage sites at their fastest pace in eight years.

By Tsvetana Paraskova for Oilprice.com / Feb 05, 2025