SAN ANTONIO, TX / ACCESSWIRE / May 8, 2018 / The US government expects 2018 to be a record year for domestic crude oil production: with an estimated average of 10.7 million barrels a day (b/d), this would break the 1970 record of 9.6 million b/d. A new high is anticipated in 2019 when the US Energy Information Administration sees the number rising to 11.4 million b/d. Any conversation on US hydrocarbon output inevitably links to the Permian Basin, which has been the pumping heart of the industry since the 1940s and is likely to remain so for decades. According to research by IHS Markit, the area contains between 60 billion and 70 billion barrels of recoverable oil, which puts it on a par with the world's largest oil field – Saudi Arabia's Ghawar. But while the Permian Basin is essential for US energy independence and exports, history has shown that reserves and output alone cannot ensure steadily rising profitability for exploration companies as oil & gas prices and demand are notoriously difficult to predict. The tough times of 2014 and 2015 clearly demonstrated this is one industry that definitely needs to bet on innovation, especially digital technologies, to improve operational efficiencies and contain costs, according to Brian Alfaro, founder, and CEO of Texas-based Silver Star Resources.

As participants in a highly capital-intensive industry, oil & gas companies need to ensure their investments deliver maximum returns. Permian Basin players may not have to worry about their reserves, but they still have to consider expenditure, efficiencies, safety, and environmental impact. In an age of tremendous technological progress, legacy industries have the opportunity to transform themselves and remain competitive, as Brian Alfaro notes. Numerous studies indicate that digital technologies can deliver substantial benefits to oil & gas companies. According to analysts at McKinsey, the implementation of artificial intelligence (AI), robotics, virtual reality (VR), cloud computing and other innovative technologies could reduce capital expenditures by as much as 20% and generate up to $1 billion in cost savings or production increases.

AI is arguably the technology with the greatest transformative potential for oil & gas players. Research group MarketsandMarkets estimates that the industry invested $1.42 billion in AI solutions in 2016, and the amount will rise to $2.85 billion by 2022, growing at a compound annual rate of 12.7%. "Improving operational efficiency in the oil and gas industry and predictive maintenance to avoid costly downtime will drive the artificial intelligence in oil and gas in the coming future," the research report says. The adoption of robotics is a relatively new trend in the industry, but it is already proving extremely helpful in automating dangerous or repetitive tasks. VR is another technology with an enormous potential to improve efficiency, safety, and productivity. It can be leveraged in training, both of field workers to enhance safety and of maintenance personnel to improve first-time fix rates. In an industry that can still afford equipment failures and prolonged downtimes, VR can be an excellent tool for conducting first-level diagnostics. Cloud computing can also become a powerful ally of oil & gas operators. "To take effective action, the entire production chain, from COO right down to on-site good engineers, need to see the very detailed cost and production data, narrowed down to the invoice level. By leveraging cloud computing capabilities, accuracy and transparency are achieved in the shortest amount of time to drastically improve well-cost management," says Shiva Rajagopalan, CEO of enterprise software provider Seven Lakes Technologies.

Texas native Brian Alfaro grew up in the oil & gas heart of the United States to become a distinguished entrepreneur and a passionate supporter of his community through various charitable activities. Currently based in San Antonio, he serves as the president and CEO of Silver Star Resources, a company that specializes in shale, limestone, unconventional horizontal drilling, and conventional drilling. His philanthropic work includes support for organizations such as the National Multiple Sclerosis Society, The Miracle League, First Book San Antonio, Family Violence Prevention Services, The Kristine Meza Foundation, Junior Achievement of South Texas, and the Special Olympics.

Brian Alfaro - Oil and Gas Industry Mogul and Dedicated Philanthropist: http://brianalfaronews.com

Brian Alfaro - On the Positive Investment Outlook for Permian Basin: https://finance.yahoo.com/news/brian-alfaro-positive-investment-outlook-025200987.html

Brian Alfaro Discusses the Strong M&A Interest in Permian Basin: https://finance.yahoo.com/news/brian-alfaro-discusses-strong-m-041500382.html

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SOURCE: Brian Alfaro