Rice University lab’s device evaluates fluid movement in fracturing operations

A tabletop device invented at Rice University can tell how efficiently a nanoparticle would travel through a well, and may provide a wealth of information for oil and gas producers. The device gathers data on how tracers - microscopic particles that can be pumped into and recovered from wells - move through deep rock formations that have been opened by hydraulic fracturing.

Drilling companies use fracturing to pump oil and gas from previously unreachable reservoirs. Fluids are pumped into a wellbore under high pressure to fracture rocks, and materials called “proppants,” like sand or ceramic, hold the fractures open. "They' re basically making a crack in the rock and filling it with little beads," said Rice chemist Andrew Barron, whose lab produced the device detailed in the Royal Society of Chemistry journal Environmental Science Processes and Impacts.

But the companies struggle to know which insertion wells - where fluids are pumped in - are connected to the production wells, where oil and gas are pumped out. "They may be pumping down three wells and producing from six, but they have very little idea of which well is connected to which," he said.

Tracer or sensor particles added to fracturing fluids help solve that problem, but there' s plenty of room for optimization, especially in minimizing the volume of nanoparticles used now, he said. "Ideally, we would take a very small amount of a particle that does not interact with proppant, rock or the gunk that' s been pumped downhole, inject it in one well and collect it at the production well. The time it takes to go from one to the other will tell you about the connectivity underground."

Barron explained the proppant itself accounts for most of the surface area the nanoparticles encounter, so it' s important to tune the tracers to the type of proppant used.

He said the industry lacks a uniform method to test and optimize custom-designed nanoparticles for particular formations and fluids. The ultimate goal is to optimize the particles, so they don' t clump together or stick to the rock or proppant, and can be reliably identified when they exit the production well.

The automated device by Barron, Rice alumnus Samuel Maguire-Boyle and their colleagues allows them to run nanotracers through a small model of a geological formation, and quickly analyze what comes out the other side.

The device sends a tiny amount of silver nanoparticle tracers in rapid pulses through a solid column, simulating the much longer path the particles would travel in a well. That gives the researchers an accurate look at both how sticky and how robust the particles are.

"We chose silver nanoparticles for their plasmon resonance,” said Barron. “They' re very easy to see (with a spectroscope) making for high-quality data.” He said silver nanoparticles would be impractical in a real well, but because they' re easy to modify with other useful chemicals, they are good models for custom nanoparticles.

"The process is simple enough that our undergraduates make different nanoparticles and very quickly test them to find out how they behave," Barron said.

The method also shows promise for tracking water from source to destination, which could be valuable for government agencies that want to understand how aquifers are linked or want to trace the flow of elements like pollutants in a water supply, he said.

Barron said the Rice lab won' t oversee production of the test rig, but it doesn' t have to. "We just published the paper, but if companies want to make their own, it includes the instructions. The supplementary material is basically a manual for how to do this," he said.

Co-authors of the paper include Rice undergraduates David Garner, Jessica Heimann and Lucy Gao, and graduate alumnus Alvin Orbaek.

The Robert A. Welch Foundation supported the research.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Sound oil awarded Casa Tiberi gas field concession

Sound Oil reported that approval of the San Lorenzo Production Concession has now been received from the Italian Ministry of Economic Development. This concession permits the Company to commence commissioning operations at the Casa Tiberi gas field.

The Casa Tiberi gas field, located in the Marche Region, onshore Italy, was discovered in 2011 and the discovery well was completed with the perforation of a single zone at a depth of  571-581 m. The well tested dry gas at 1.3 MMscf per day on a 5/16" choke and is expected to achieve first commercial gas during the first half of 2014.

James Parsons, Sound oil' s CEO, commented:

"We are pleased to report continued operational progress in Italy.Whilst Casa Tiberi is one of our smaller assets it will add to Sound Oil' s near term production and revenue.  Operations on site are expected to commence in April, once construction of the production skid is complete."

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Oil rigs in U.S. extend record as Eagle Ford drilling surges

HOUSTON (Bloomberg) -- Rigs targeting oil in the U.S. jumped to a record as energy producers used the most in a year to drill for crude in Texas’ Eagle Ford shale formation. Oil rigs increased by 14 to 1,487, the highest level since Baker Hughes Inc. split the oil and gas counts in 1987, data posted on the company’s website show. Rigs drilling for oil in the Eagle Ford of South Texas jumped by nine to 209, matching a record set in May 2013, according to the Houston-based field services company.

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Success for China’s first four shale gas well zipper frac

China' s first four shale gas well zipper fracturing went smoothly at the Changning H2 national demonstrative shale gas mining block in Sichuan earlier this month. It is currently the most advanced shale gas factory operation around the world. And its success theoretically doubles working efficiency and highlights the performance of the Chinese equipment.

A total of 32 of the most advanced frac spread for 4 horizontal wells completed the 56-stage fracturing operation, with a total of 31.7 million gal liquid and 12.1 million lbs of sand injected, many times that required for conventional shale gas fracturing.

To guarantee stability and safety, 32 sets of equipment were used. These included 13 JEREH units (2,500hp), 6 JEREH units (2,000hp), 8 HALLIBUTON units (2,000hp) and 5 S&S units (2,000hp) with a total output power of 7,000hhp.

Due to the high requirements for the equipment, two sand blenders break down at the early stage of operation and it is noticeable that JEREH sand blenders show reliable performance to ensure the smooth completion.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

EU environmental impact assessment rules to trigger more competitiveness, growth

A recent European Parliament vote on new environmental impact assessment rules is a step forward in making Europe more competitive without compromising on the environment, according to the International Association of Oil & Gas Producers (OGP).

“While not imposing unnecessary requirements on the upstream oil and gas industry, the new rules will guarantee that any development, including exploration for shale gas, will be subject to strict environmental standards,” said Roland Festor, OGP’s director for EU affairs.

The new rules confirmed the existing differentiation between exploration and production of hydrocarbons. It will ensure that the requirements for environmental protection become more stringent as a project progresses. This way, time and resources will be applied where they matter: on full environmental studies, once a project’s economic potential is confirmed and its development is going ahead.

Too many detailed requirements during the early phase of exploration - when commercial viability of a project is totally uncertain and operations limited - would have undermined key investments, without bringing any additional benefit to the environment.

“The vote is a positive first step in enabling the assessment of domestic energy resources. Opportunities, such as natural gas from shale, must be explored and, if promising, will be crucial to encourage future economic growth and create new jobs,” said Festor.

“Shale gas exploration is even more crucial now that the EU is devising its 2030 climate and energy policy. Gas is the best resource Europe has - cleaner-burning, reliable and immediately available - to help meet EU emissions reduction targets quickly and at a competitive cost versus alternatives,” he explained.

Shale gas development could have other significant benefits for Europe. According to a recent study from consulting and engineering firm Poyry, domestic EU development could create as many as 1.1 million jobs by 2050, while reducing the region’s dependence on energy imports and relatively lowering prices.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Triton Funds acquire drilling operations technology company Cubility

SANDNES, Norway -- Funds advised by Triton have entered into an agreement to acquire Cubility, a Norwegian oil services company specializing in solids control and waste management for the next generation of drilling operations, from Energy Ventures for an undisclosed sum.

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GlassPoint Solar expands Kuwait presence, appoints country chairman

KUWAIT CITY, Kuwait -- GlassPoint Solar, a solar EOR specialist, recently announced that it is establishing a new office in Kuwait City, and has appointed Abdul Hussain Shehab as country chairman. With more than 40 years of experience in Kuwait’s upstream oil and gas industry, Shehab will lead the company’s expansion in Kuwait.

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Sinopec marks shale as 2014 priority after breakthrough

BEIJING (Bloomberg) -- Sinopec marked shale gas development as its 2014 priority after doubling its output forecast from a key field in China’s southwest.

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Bashneft buys Siberian producer for more than $1 bn

MOSCOW -- Bashneft Group has gained control over a 100% stake in LLC Burneftegaz, a company conducting exploration and producing oil in the Tyumen District, Russia. LLC Burneftegaz owns the rights to exploration and development of the Sorovskoye field (the Vostochno-Vuemskiy licence area) and the Tortasinskoye field (the Tortasinskiy licence area) via its wholly-owned subsidiaries. Total ?1+?2 oil reserves of the fields amount to 53.4 million tonnes. Commercial production was launched at the Sorovskoye field in 2013.

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Europa announces renewal of Tarbes Val d’Adour permit, onshore France

Europa Oil & Gas has announced the renewal of its 100% owned Tarbes Val d’Adour permit, in the proven Aquitaine basin, onshore France.

The permit has been extended until January 2015. Tarbes Val d' Adour contains several oil accumulations that were previously licensed by Elf but were abandoned in 1985 due to a combination of technical issues and low oil prices. Two fields, Jacque and Osmets, were drilled using vertical wells which generated modest production levels.

Hugh Mackay, CEO of Europa, said, “Thanks to previous operators recovering modest quantities of oil from two fields on the permit, Tarbes is an appraisal rather than an exploration project.  While not on the same scale as our potential company-making Bearn des Gaves permit onshore France and our two Kosmos Energy operated licences offshore Ireland, Tarbes offers a relatively low cost business development opportunity. In tandem with our on-going farm-out discussions for the Bearn des Gaves permit, we will now look to secure a partner with whom we can look to advance Tarbes in the limited time available.

“Elsewhere in our portfolio, we remain on course to drill two wells onshore UK in 2014, starting with the Wressle prospect in the first half of the year and Kiln Lane in the second, each with a one in three chance of success. Offshore Ireland, we expect to complete the interpretation of the 3D seismic survey acquired in Q3 2013 by the end of June 2014, at which time decisions will be made in respect of drilling the Kiernan and Mullen prospects. This is an exciting period for the company and I look forward to providing further updates on our progress in due course.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Chesapeake’s $1.2 bn loans rely on dwindling output

OKLAHOMA CITY, Oklahoma (Bloomberg) -- Dwindling production from Chesapeake Energy Corp.’s natural gas fields is undermining fuel sales backing more than $1.2 billion in loans and notes. Output from 3,300 Chesapeake-operated wells in the Sahara field of northern Oklahoma was 12% below projections during the six-month period ending in February, Moody’s Investors Service said in a note to clients. As a result, the so-called production coverage ratio on the Glenn Pool Oil & Gas Trust five-year loan and 10-year notes declined to 1.18 from 1.29, the credit-rating firm said.

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Rosneft said to discuss taking stake in Exxon’s Kurdish blocks

IRVING, Texas (Bloomberg) -- Exxon Mobil Corp. is negotiating to bring OAO Rosneft into oil and gas licenses in Iraq’s Kurdistan region, according to people familiar with the talks. Rosneft is still considering the proposal, part of a global alliance between the largest U.S. and Russian oil companies, and a deal isn’t guaranteed, the people said, asking not to be identified because the talks are confidential.

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VAM USA reaches agreement on property for threading plant in Ohio

VAM USA LLC, a supplier of premium threaded connections for the oil and gas industry, confirmed that it reached an agreement with the City of Youngstown, Ohio, to purchase and develop property for a new threading plant on Ohio Works Drive.

The planned 67,000-sq-ft, approximately $80-million facility will thread VAM connections on pipe produced at the adjacent Vallourec Star plant, and destined for the North America oil and gas shale plays.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Gazprom Neft to start fourth shale oil exploration project

SAINT PETERSBURG, Russia -- Gazpromneft-Khantos, a subsidiary of Gazprom Neft, has been granted a licence to carry out geological exploration of the deep oil saturated prospective horizons in the Achimovskaya and Bazhenovskaya formations of the southern Priobskoye field.

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Oil, gas well failures show more public data needed, study says

DURHAM, United Kingdom (Bloomberg) -- The European public needs more data on exploiting onshore fossil fuels to gauge shale oil and gas risks as failure rates for drilling in the past century vary from 1.9% to 75%, the authors of a study said.

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Atlas Copco launches SmartROC T simulator

Atlas Copco is launching a new surface crawler simulator for operator training: the SmartROC T operator simulator. The simulator is a training tool intended to develop operator skills.

The SmartROC T simulator uses the original controls identical to those on the drilling equipment, providing students with a realistic training environment. The advanced control system is also integrated into the simulator, giving students the opportunity to use all the features of the actual drilling equipment.

The simulator has a pre-designed learning pass to give students step-by-step instructions on operational best practices. The simulator is mounted on a motion platform for a realistic experience.

The simulator is part of a new classroom training module that is both easy to move around, while still having a moving platform. The training can be done from the standard operator seat or from the original RRC control. All scenarios can be done in the dark so that all realistic environments can be trained.

A comprehensive training package is also offered to go with the simulator: the Master Driller program. This consists of three different levels (Bronze, Silver and Gold) that take the operator from classroom training and simulator training to actual training on the drilling equipment.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Sinopec marks shale as 2014 priority after breakthrough

BEIJING (Bloomberg) -- Sinopec marked shale gas development as its 2014 priority after doubling its output forecast from a key field in China’s southwest.

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U.S. Water appoints Jon Amdursky to media relations team

U.S. Water Services, Inc., a producer of integrated solutions for water treatment, has named Jon Amdursky to its marketing team, focusing on media relations.

Amdursky comes to U.S. Water from BWA Water Additives, where he held similar responsibilities. He served previously as global director of marketing communications for Chemtura Corporation, and, prior to that, managed marketing communications for ISP, Bayer and Dow Chemical.

Amdursky is a graduate of Princeton University, and the Woodrow Wilson School of Public and International Affairs. He also attended the MBA program at Rochester Institute of Technology.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Petrofac rises to 3-month high on $1.2 billion BP deal

Petrofac Ltd. rose to the highest in three months in London trading after the oil-services provider won a $1.2 billion contract from BP Plc in Oman.

Petrofac advanced as much as 4 percent to 1,383 pence, the highest intraday price since Nov 15. It’s up 12 percent in 2014.

BP awarded the engineering, procurement and construction contract for the central processing facility of the Khazzan gas project, London-based Petrofac said today in a statement.

“This contract is very much Petrofac’s bread-and-butter, an onshore gas processing plant in the Middle East,” Investec Bank Plc said in a note.

Separately, Ophir Energy Plc today said it signed a non-binding agreement with Petrofac to help develop a gas project off Equatorial Guinea.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

U.S. oil rigs rise to record as Eagle Ford drilling gains

HOUSTON (Bloomberg) -- Rigs targeting oil in the U.S. advanced to a record this week as energy producers ramped up efforts to drill horizontally for crude in Texas’ Eagle Ford shale formation. Natural gas rigs fell to a 19-year low.

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Uncertainty clouds investment in Ukraine shale exploration

The world’s largest oil companies from Royal Dutch Shell to Exxon Mobil are likely to reassess deals to drill in Ukraine where political crisis is threatening a promising source of new profits as well as the country’s drive for energy independence.

Shell and Chevron signed agreements last year to drill unexplored shale formations in Ukraine, offering the chance to upgrade the country’s energy infrastructure and boost domestic production, thus reducing the amount of gas imported from Russia. Before the crisis erupted last year, Exxon, the largest U.S. oil company, was also close to signing a pact to explore the Black Sea.

While the oil companies can spend their money in other countries, the investment, which could eventually be worth more than $10 billion, is vital to Ukraine’s quest to pull away from Russian control and revive an economy on the verge of collapse after three months of violent protest.

“Ukraine is a no-go area for any investment from any foreign investor right now,” said Chris Weafer, senior partner at Macro Advisory in Moscow. “Investors need two critical conditions to invest in any emerging economy: political stability and economic predictability.”

At the moment Ukraine has neither. Parliament delayed a vote today on.

Shell and Chevron Corp. signed agreements last year to drill unexplored shale formations in Ukraine, offering the chance to upgrade the country’s energy infrastructure and boost domestic production, thus reducing the amount of gas imported from Russia. Before the crisis erupted last year, Exxon, the largest U.S. oil company, was also close to signing a pact to explore the Black Sea.

While the oil companies can spend their money in other countries, the investment, which could eventually be worth more than $10 billion, is vital to Ukraine’s quest to pull away from Russian control and revive an economy on the verge of collapse after three months of violent protest.

“Ukraine is a no-go area for any investment from any foreign investor right now,” said Chris Weafer, senior partner at Macro Advisory in Moscow. “Investors need two critical conditions to invest in any emerging economy: political stability and economic predictability.”

At the moment Ukraine has neither. Parliament delayed a vote today on appointing a government of national unity to fill the void left by President Viktor Yanukovych’s exit. Its first priority will be to negotiate an economic aid package to fend off default, replacing cash Russia had promised the old regime.

If Ukraine achieves a measure of political stability, a new government will want to pursue gas drilling given Russia’s negative reaction to Yanukovych’s overthrow, said Andrew Neff, an analyst at IHS Energy in Moscow.

“Ukraine will have to engage productively with foreign energy companies going forward if it has any hope of reducing that dependence on Russian gas,” he said.

The Hague-based Shell plans to drill as many as 15 wells over the next five years to appraise the potential of the Yuzivska field, spread over 3,100 sq mi of eastern Ukraine. Spending on the project could rise to $10 billion if it reaches production, the government said last year.

The company said in a statement that operations haven’t been affected by the unrest.

Chevron, the second-largest U.S. oil company, has a similar agreement for the Oleska shale formation, where it pledged to spend $400 million on drilling. The San Ramon, California-based company said in a statement that it’s closely monitoring the situation in Kiev and has taken appropriate precautions to ensure the safety of staff and their families.

Exxon was close to signing an agreement to drill exploration wells in the Skifska area of Ukraine’s part of the Black Sea before the current crisis erupted. The deal, which would have seen Exxon commit $735 million to drill just two offshore wells, remains in limbo.

Even if drilling continues, production on a significant scale will take several years and the threat remains that Russia will use energy to maintain its influence over Ukraine - its goal since protests first started in Kiev last year, when Yanukovych ditched a deal to strengthen ties with the EU.

“Ukraine is still very reliant on energy from Russia,” said Leslie Holmes, professor of political science at the University of Melbourne. “So Russia still has a trump card up its sleeve.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Spain expands constitutional challenge to allow fracing

MADRID, Spain (Bloomberg) -- Spain’s government will seek to overturn a ban on fracing in the wine-making region of La Rioja, relying in part on the European Union’s January guidelines for the drilling technique.

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Smaller companies to dominate Shale, Pemex unit Director says

Smaller companies to dominate Shale, Pemex unit Director says BY ERIC MARTIN & ADAM WILLAMS (Bloomberg) Smaller companies will probably dominate development of Mexico’s shale gas deposits as Pemex focuses on shallow water and onshore projects, according to the independent

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Smaller companies to dominate Shale, Pemex unit Director says

Smaller companies to dominate Shale, Pemex unit Director says BY ERIC MARTIN & ADAM WILLAMS (Bloomberg) Smaller companies will probably dominate development of Mexico’s shale gas deposits as Pemex focuses on shallow water and onshore projects, according to the independent

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Oxy drops after California drilling ban

CARSON, California (Bloomberg) -- Occidental Petroleum Corp. fell the most in seven months after a Los Angeles-area city imposed a moratorium on new drilling. The unanimous vote by the Carson, California, city council on March 18 imposed a 45-day hold on oil and gas activity and also halted negotiations on development of about 200 wells until Los Angeles-based Occidental completes the spinoff. Carson is the third local government in the state since September to seek restrictions on drilling.

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Wood Group opens HSE, technical competency center in Eagle Ford

HOUSTON -- Wood Group has opened a 16,000 sq ft training facility in Kenedy, Texas, where educational programs for Eagle Ford shale workers will focus on health, safety, and environment (HSE) and technical competency. The center includes a 300-person capacity training room, an instrumentation and electrical (I&E) lab, a computer-based training (CBT) lab and a board room. The facility also has an outside pad with a tank battery and an area with buried pipe for pipeline finding; both will be instrumental for hands-on training.

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Oil Prices May Crash

Oil has been rising for the past 10 years as the world has come to the understanding that there is only a limited supply and national economies are tied to it. To many people the rise in oil price is a good bet because of its limited nature. It may be possible that oil will take a dive in price as it comes close to $100 per barrel as people begin to feel uneasy.

It is possible that people have made so much money on oil stock, futures, options and other investments that people or large investment houses may dump their investments and take the winnings. If this happens even a small decline could trigger and en masse exodus from the market forcing a quick downward trend on the price per barrel of oil causing the market to crash. A market crash could be as much as a 40% decline in the price per barrel.

There are a number of forces around the world that may make a dip in the market in the near future. The Middle East may become more stable in the near future as the ending to the Iraq war becomes more likely. Even though there is no guarantee that the country will become stable it is a possibility it may become this way as one side beats out the other. It isn’t likely to have an immediate affect.
Since companies have found the oil market to be so lucrative they have been scouring the world over for new deposits. In their interest they have been able to find these new deposits and in a couple of years will be able to tap them, which will put more money into the market. When this oil goes into the market the demand will decrease because world wide production has increased.

Since oil prices have been on the rise over the past decade countries have been investing in alternative fuel sources. For example, in the United States ethanol plants have been springing up all over the pace, cars are expected to increase efficiency and he government is trying to cut dependency on foreign oil. This will have a downward affect on the price of oil as the need for it decreases.

Many market analysts also believe the oil price of investments is also higher then its true costs. It is an overheated market that may be waiting for a crash. They believe that it won’t be long before people start taking their money out because they believe it can’t go much further. When people take out their money this is when big changes in the market are going to be seen.

$100 is a psychological barrier for most people. Oil prices have never been this high in history and most people simply can’t imagine a time when oil will be this high. Therefore, when the $100 threshold is met people may naturally become uneasy and begin to sell their oil shares which could free up the markets and temporarily reduce the costs.

The Roller Coaster Oil Market

There is a public mythology concerning the oil markets that has been fueled by a sharp rise in oil prices in the last few years.  That perception is that the oil companies whose job it is to acquire the raw materials to make petroleum products, including gasoline for transportation, are the source of the rising prices.  It is easy for the public to pin the blame on big business.

The truth is that those on the inside of the oil business know full well that the oil business is tremendously cyclical.  That means that the old adage, "whatever goes up must come down" definitely applies to the oil markets domestically and around the world.  The current high prices are more a reflection of problems with refineries and with supply due to tension in the Middle East than it does with the profit objectives of the oil companies involved.  In truth, oil companies have to cope with sweeping shifts in supply and demand and it impacts how they plan their economic futures as much or more than it affects the average consumer.

This upswing in the price of gas is not the first time the oil business has seen huge profits and gains in their returns.  And anyone who has been in the oil business for a few decades knows full well that the current high profitability economy which is benefiting oil companies tremendously will turn the other direction at some point.  Just as there is a shortage due to problems with repairs or temporary shut downs at the nation’s refineries, there will come a time when all refineries are producing at full capacity and there will be a glut on the market which will drive prices down.

Similarly just as oil shortages dominate the market and are on the minds of consumers because of Middle East tension, oil supplies can shift dramatically.  A new discovery in Asia, The Soviet Union, Europe, South America or off shore in America can suddenly send a glut of supply into the market that will send the price of crude oil plummeting and with it, gas prices worldwide.

This is not just pie in the sky forecasting but an industry trend in the oil business that is supported by years of experience, research and tracking by the businesses most impacted by sudden supply and demand turns in the markets, those big oil companies.  The oil business is so used to the roller coaster nature of the market that even though the market is good now for the oil companies, they are already preparing for the next downturn and how they will survive when supply exceeds demand and prices drop leaving them with big adjustments to make in how they do business.

As with any smart manager of a business or investor for that matter, diversification is the way to prepare a strategy for handling volatile markets like we see in the oil business.  And that has been a cornerstone of the strategies that have kept the oil companies able to ride the ups and downs their industry undergoes on these huge swings in supply, demand and profitability.  While the oil industry is enjoying unprecedented prosperity now, there is coming a time when they will see their profits drop and they will have to brace for a downturn of unknown length and survive it until the next swing of the pendulum back out.

Even now, you can bet that every big oil company in the world is already investing heavily in diversified business interests that can generate revenue to keep the company afloat when oil revenues are not as lucrative as they are now. Those investments will be in real estate, the stock market and even in far flung unrelated industries such as retail or the entertainment industry. The more diversified a company can get, the more prepared they are to ride out the roller coaster oil market.

And this shrewd business practice is a good signal to those who are investors in the oil industry as well.  Just as the companies who are fattening up our portfolios now are strong investments, we should know that the downturn is coming and diversify while times are good. Then we can ride out the next oil slump just as handily as the companies that live or die by the oil markets do year in and year out.