The Value of Satellite Data in the Oil and Gas Sector

Are satellites creating a more level playing field in the oil and gas sector?
This article appeared in Vol. 16, No. 4 - 2019


The Value of Satellite Data in the Oil and Gas Sector

© NASA-JPL/Caltech. In an age of so-called untruth, what can satellite imagery do to offset the deficit? Can it add to the evidence that turns speculation into hard fact; that overturns distortion and worse?

Take what has been happening in the Strait of Hormuz as an example. Behind the cat and mouse politics are a series of satellite pictures which show rising inventories of stored crude on Kharg Island, Iran’s main export terminal. A message to make Donald Trump smile, despite the tension: sanctions are biting and customers like Syria are finding it harder to get their crude.

Satellite imagery is an accurate overview, an addition to the information flow which different parts of the industry are finding it increasingly difficult to ignore. “The oil and gas sector has long struggled with patchy, time-lagged, and sometimes incorrect information,” notes Berend Heringa, an industry analyst with McKinsey & Company. What’s more, he adds, in an online post on the topic, this information is gleaned from a variety of sources, some less reliable than others.

So are satellites creating a more level playing field in the industry? In some ways this seems to be the case, as investors and buyers get a more immediate sense of how inventories and capacities are helping to drive the market. If you want to know the extent to which the latest Chinese mega refinery is adding to the country’s demand for crude then it may be a satellite which can give you the most accurate, most immediate picture.

In a recent online blog the satellite company URSA noted that Kharg Island crude storage had reached 81% capacity, the conclusion being that Iranian crude exports have been falling faster than production rates. Small wonder then that Syria and China have become such important customers for Iranian crude. The evidence in viewing images of those near-to-full storage tanks is that Iran must cut production or find new customers, not so easy in the face of US sanctions.

In making use of SAR (Satellite Aperture Radar) data from a number of satellite providers, URSA is seeking to demonstrate the market intelligence value of its services. Other companies are doing the same and given that the industry is steering a course through volatile times they may have a point. The value of satellite-based services, notes Berend Heringa, can extend from oil traders working for some of the largest majors to NOC executives trying to improve security. 

Whether this can help counter the age of untruth is open to debate.

Further Reading on the Use of Satellites in Oil and Gas

Some recommended GEO ExPro reading relating to, or similar in content to, the use of satellite data in the geosciences.

Insights from Space!
Michael Hall, Airbus Defence and Space, Geo-Intelligence
With recent offshore gas discoveries reviving interest in the Eastern Mediterranean region, a variety of methodologies can be used to assess potential, including using data from satellites orbiting the earth. Could these reveal the presence of the elusive deeper oil?
This article appeared in Vol. 10, No. 3 - 2013

The East African Rift System – A View from Space
Michael Hall and John Diggens; Astrium Geo-Information Services
Remote sensing data has given a unique perspective on the East African Rift System, allowing both large regional structures and more subtle features to be identified and placed in context.
This article appeared in Vol. 8, No. 4 - 2011

Advanced Remote Sensing
Lasse Amundsen and Martin Landrø
Radio waves from satellites can now be used to measure miniscule movements at the Earth's surface at a millimetre level. The method has gained wide acceptance for several scientific purposes, but also has definite potential for use in reservoir management.
This article appeared in Vol. 5, No. 6 - 2008


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