Wednesday, September 25, 2019

Back at HUG19 talking energy cybersecurity

The Oilholic is back in The Hague, Netherlands for the 2019 installment of Honeywell Users Group EMEA; the annual European jamboree of the global software industrial company's automation and optimisation unit - Honeywell Process Solutions (HPS).

Everything from state-of-the-art plant processing systems to virtual reality kit for health and safety happen to be on display, and every year the event gets bigger, because the energy and petrochemical world's appetite for big data and cost optimisation is getting voracious by day.

Advanced analytics, digital optimisation of throughput, cloud solutions - you name it. To quote our old friend - Jason Urso, Vice President and Chief Technology Officer of HPS, "It not the data that's big, it's what you do with it that matters."

In a mammoth two-hour long keynote and presentation to kick-off the event's first morning, Urso touched on how Honeywell's old workhorse of a plant control system - the TDC 3000 - can benefit from deployment of its digital twin his team have been aggressively promoting in recent years.

To the uninitiated on the plant control front, basically Urso and his team are saying, if you want a swanky new control system, by all means go for, but the existing infrastructure can indeed be "digitally optimised" and upgraded; reducing the need for everything from multiple clunky servers to a messy mass of cables. And no its not getting too cloudy in the age of Big Data, because the usage of cloud computing and off premise data storage (where permissible by law) is growing.

Of course, as digital techniques proliferate, so does the worry, and in HPS' case, the opportunity of cybersecurity. In sync with that sentiment, HPS is notching up its cybersecurity offering and there is form here. In 2018, the company launched its dedicated cybersecurity consulting outfit to help customers rightly spooked about the growing threat.

It seems 12 months on, that dedication has multiplied several times over via its - Honeywell Forge Cybersecurity platform, which "simplifies, strengthens and scales cybersecurity for asset-intensive businesses and critical infrastructure facing cyber threats."

According to Jeff Zindell, HPS' Vice Present of Cybersecurity, the offering can be scaled to match cyber-requirements and budgets, and the allied customer support that goes with it. With over 50% of HPS' client base being in the energy and petrochemicals sphere, it is easy to fathom where it sees the demand coming from.

Zindell describes the new unified suite of applications, services and products as a "natural step to take to address a range of end-user requirements from asset discovery and monitoring to fully managed services.

In what would be music to margin squeezed downstream and midstream players' ears, Zindell said the unified suite will also bring down costs alongside optimisation of cybersecurity mechanisms.

Plenty to chew on, and some images from the exhibition you to look at, but that's all from The Hague on this visit. Next stop Dubai and Fujairah via London Heathrow; keep reading, keep it 'crude'!

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© Gaurav Sharma 2019. Photo 1: Jason Urso, Vice President and CTO of HPS, discusses Honeywell TDC 3000's digital twin options. Photo 2,3 & 4: Honeywell virtual reality headsets, kits and flow management and monitoring equipment © Gaurav Sharma, Oct 24-25, 2019, The Hague, Netherlands.    

Saturday, September 21, 2019

Why drone attacks on Saudi Aramco haven’t sparked sustained oil price spike

The Oilholic returned from researching enhanced oil recovery in rural Pennsylvania on Friday (September 13), only to wake up to a tumultuous weekend, and week, for the oil market in that order. For in the small hours of Saturday morning, multiple drone and alleged missile attacks, claimed by Houthi rebels, hit Saudi Aramco’s crude processing facilities in Abqaiq and the Khurais oilfield. 

The attack took out 5.7 million barrels per day (bpd) of Saudi production capacity. Going by the last Platts survey, the Kingdom pumped 9.77 million bpd in August, implying the attack created a 58% drop in production at the very least when measured against last month's production levels.

The situation remains unpredictable, and as yours truly told the BBC – were it not for US production serving as a buffer, current oil pricing scenario and modelling would be very different.

The Americans remain the world's largest oil producer pumping in excess of 12 million bpd, and the country’s production could rise to 13.4 million bpd at some point in 2020. That is what has largely kept the market sane. Predictably, Brent futures shot up 20% to $71 per barrel at the Asian open on Monday but the uptick did not last. As the week’s trading came to a close on Friday (September 20), a look at benchmark prices - ironing out the week’s volatility - says it all. Brent closed at $64.28 per barrel, up $4.06 or 6.84% while the WTI closed at $58.09 per barrel, up $3.24 or 5.9% on the week.

The said movement is hardly the stuff of bullish dreams; even if the week belonged to the longs, short-sellers did not take as big a hammering as some feared. And consumers need not be overly concerned for now at least. As the Oilholic said on ITN/Channel 5 News, the physical crude market’s response and its domino effect on fuel prices depend not on the here and now, but on where from here? Lot depends on the Saudi and US response to the attack that both parties near instantaneously blamed on Iran which backs the Houthi rebels.

If the Saudis, in concert with the Americans, hit sites in Iran, then that could lead to a wider conflict in the Persian Gulf and some very real turmoil associated with it; not just knee-jerk price reactions of the sort we saw in the immediate aftermath of the revolt.

It is here that the market could see a sustained geopolitical risk driven uptick in oil prices for $10 to $15 per barrel. Plausibly, you will see prices at the pump rising given that retailers pass an oil price rise near instantaneously but are pretty slow in cutting them in the event of a price drop. And of course governments who in many cases take two-thirds of the price we pay per litre at the pump, might have some serious thinking to do as well.

For now an eerie calm prevails, with the market soaking in verbal salvos between Riyadh, Washington and Tehran. Logical conclusion is that an attack of this magnitude cannot go unanswered or Saudi Crown Prince Mohammed bin Salman, the power hungry favourite son of Saudi King Salman, would look weak. Finally, here are the Oilholic’s thoughts in detail on Forbes summing up the turbulent trading week. That’s all for the moment folks! Keep reading, keep it 'crude'! 

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© Gaurav Sharma 2019. Photo 1: Gaurav Sharma on BBC News at Six on September 15, 2019 © BBC, Photo 2: Gaurav Sharma on 5 News on September 16, 2019 © ITN

Contact:

For comments or for professional queries, please email: gaurav.sharma@oilholicssynonymous.com

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