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Shale Gas on the Rise: 3 Ways to Prepare Your Energy Company for Unprecedented Production Growth

Internal and external forces are catalyzing change in the global energy sector. From the development and implementation of cutting-edge operational technology to the widespread embrace of innovative consolidation and partnership strategies, transformation abounds. But few of these factors are as influential as the ascendance of shale gas.

Over the last decade, energy firms worldwide have drastically expanded their shale production, causing great upheaval through the displacement of more traditional resources. U.S.-based oil and gas companies are spearheading this charge, producing more than 40 billion cubic feet of dry shale gas per day, according to research from BP. Demand for the commodity continues to increase across the globe as governments search for clean alternatives to coal. Established shale producers in America as well as those in new markets such as Australia and China may soon have to scale up in order to meet the expanding needs of their customers.

Here are three actionable strategies that energy companies here and abroad can use to maximize their operations and find success in the ever-growing shale market:

 

1. Install innovative production technology

Small and midsize organizations, not energy behemoths, are powering the U.S. shale revolution. How? By developing advanced drilling technology and techniques that now underpin virtually all shale production. Energy companies that wish to take advantage of the healthy shale market and scale up their workflows must pursue similar strategies. Of course, businesses adopting this strategy are unlikely to uncover shale production innovations as transformative as horizontal drilling or hydraulic fracturing. That said, there are powerful new technologies that can facilitate the optimization needed to succeed in the current energy marketplace.

For instance, according to Reuters, many larger firms looking to expand their shale operations are moving forward with digitization efforts that can augment established extraction methodologies. Royal Dutch Shell, the third largest oil and gas company in the world, has begun putting into place connected infrastructure capable of bolstering its inland and offshore shale workflows. Shell engineers now make use of electronic devices capable of separating sand generated during hydraulic fracturing from useable petroleum product. They also leverage DNA sequencing to analyze rock formations prior to drilling. Earlier this year, Shell unveiled a functioning automated drilling platform that allows engineers to dig wells anywhere from the company’s control center in Calgary, Alberta. This asset is expected to generate as much as $2 billion in annual shale production cost savings.

Energy companies new to the shale space would be wise to follow in the footsteps of Shell. They should pursue digitization because cutting-edge technologies can bolster production while cutting costs related to workflow inefficiency and extraction and drilling failure.

 

2. Focus on supply chains

The supply chains that power shale production differ from those associated with more traditional energy products. Upstream workflow components center on complex infrastructure development and drilling operations that require all manner of support, including specialized waste management and transportation services. The average shale pad contains more than 20 moving operational parts, all of which must function in sequence and on time to meet production goals, according to analysts at EY.

For oil and gas firms new to the niche with plans to scale, configuring supply chains that support this kind of work is no easy task, and simply creating back-end processes of this scale is only half the equation. Organizations must optimize their supply chains to harness the full power of their shale operations and meet demand. But how?

Facilitating effective collaboration among all parties, internal and external, is one solution. When shale producers and suppliers communicate and plan properly, the likelihood of error falls and the inefficiencies that stem from these small missteps fail to materialize. Devoting more resources to materials management is another workable optimization strategy. Shale production involves solid, liquid and gas ingredients, most notably hydraulic fracturing solutions filled with proppants and chemical additives. Oil and gas companies must have supply chain components that can provide key operational materials on the front end and remove byproduct following production. Firms that successfully streamline these activities can support lucrative shale production workflows with high yield.

 

3. Bolster workforce training

It takes the collaboration of specialists from a variety of industries to get shale extraction sites up and running. From the construction teams that install foundational infrastructure to the drill operators who drive everyday activities, these workflows are full of talented contributors with specialized skills of all kinds. Companies ramping up their shale operations in light of marketplace developments have to cultivate and expand their talent pools to meet the needs of this industry niche.

But the ongoing skills shortage in the sector may make this difficult. As a result, upskilling existing talent is the only workable solution. Oil and gas organizations can divert workers from verticals with declining prospects and retrain them for work in shale production teams. This move allows energy firms to boost their shale output without investing immense amounts in hiring and recruitment.

Together, these strategies can help businesses in the oil and gas industry take advantage of the continued acceleration and intensification of the shale gas revolution.

Here at USC Consulting Group, we’ve been working with businesses across numerous industries for more than 50 years, including those in the oil and gas space, helping them adapt to marketplace transformations of all kinds. Connect with us today to learn more about our work.