Increasing Role of Midstream Partners to Streamline Industry Activity There is a critical need for the upstream oil and gas exploration and production industry to better manage processed and produced water.Moving forward, activity is set to grow in absolute terms, but also on a per well basis in terms of process water and produced water levels.
This growth requires smarter management methods to reduce the growing complexity in requirements and logistics concerning water.Furthermore, water scarcity and irregular supply are often found in areas of high levels of drilling activity, which compounds the environmental and operational challenges experienced by drillers and local communities and businesses.
This level of pressure is generating change in the industry, whether technological, operational or business models.There are, however, strong barriers to innovation in the industry.
Landowners and oil and gas operators understand the high degree of liability and exposure that their water businesses face. Deploying new produced water treatment solutions on a large-scale when they have only been proven on a test site is often an unacceptable risk. The need for precision and consistency in treating water to state and local regulation is a critical requirement in the industry. Oftentimes, the broader water and wastewater treatment industry will try to push new solutions into oil and gas applications without sufficient tailoring it to industry needs.
The overall need for improvement in water management, however, ensures that water and produced water treatment equipment suppliers, midstream partners, and service providers are set to benefit from this increasing demand as they are positioned to manage and reduce complexity for exploration and production organizations.This is especially apparent in recent market activity with operators selling-off their water businesses to midstream partners.
Midstream partners are set to become increasingly influential partners as operators outsource their water activities, and will therefore become central players in the sourcing, treatment, recycling, and disposal of water.Midstream partners will become key evaluators of new technologies and solutions, as they will offer large volume requirements for the industry.
Innovations in water reuse and recycling, the value from water opportunities, and the growth of digitalization and the Internet of Things will be tested in the field with both exploration and production organizations and growing midstream partners.
Leading industry stakeholders, including operators, equipment and service providers, midstream partners, and advisors, have participated in the production of this study.Data and insights have been aggregated to understand the current position of water management in the upstream oil and gas industry, and future implications and opportunities in management have been identified and outlined.
This study offers a ‘voice of the driller’ perspective, and how their positions are influenced by market and environmental conditions.
Author: Seth Cutler
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