The Transition From Drilling On Shore

1915 Words Dec 2nd, 2015 8 Pages
This project is dealing with the transition from drilling on-shore to more difficult tasks that companies are taking upon them with drilling off-shore into shallow and deep water. Since drilling for easy oil has depleted, companies are pursuing sources for the heavy oil by moving to offshore drilling. The project was originally approved in 2014, but since the approval of the project oil prices have plunged more than 50% percent in 2015. XYZ’s Houston refinery is located on the Texas Gulf Coast and has a capacity of 200,000 bpd. It is capable of processing mix of light and heavy crudes. The company for years has been considering an expansion project for the Houston based refinery, which can provide the company with an advantage due to the favorable heavy crude prices and light oil from the Middle East. The expansion would be beneficial because bringing the heavy oil from Mexico and Venezuela have both low shipping cost and lesser travel distance to the refinery. The expansion project would also benefit from the Trans-Canadian pipeline when it’s completed which would bring heavy oil from the Oil Sands in Canada.

The Houston Refinery’s current configuration refines light crudes with some capacity to refine heavy crude oil. With the proposed expansion the objective is to increase the capacity for the heavier crude oil at the refinery, the heavy crude oil would be brought in by tankers from Mexico and off-loaded at the refinery docks and piped into the…

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