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National Oilwell Varco Gives $905,000 to UH’s Subsea Engineering Program

left to right: UH Cullen College of Engineering Dean Joseph Tedesco, Charles N. Grichar, NOV senior vice president/technology development, Matthew Franchek, founding director of UH’s subsea engineering program.

Laura Tolley
ljtolley@uh.edu

November 6, 2012-Houston

National Oilwell Varco (NOV) is giving $905,000 to the University of Houston’s subsea engineering program to further research initiatives and develop a computational laboratory.

NOV’s gift will be used to establish the National Oilwell Varco Computational Engineering Laboratory and to conduct contractual research for UH’s subsea engineering program and NOV.

The computational lab will be used to perform detailed computational calculations on complex subsea equipment that must operate under high-temperature and high-pressure oil and gas conditions that occur in ultra-deep subsea reserves.

The lab also will support the subsea engineering curriculum and students, enabling them to complete capstone design projects using the latest in computational subsea engineering tools.

Recently, UH received the state’s approval to offer the nation’s first subsea engineering graduate program, which will teach the scientific and technical skills necessary to create the first generation of formally trained subsea engineering specialists. UH already offers a certificate program in subsea engineering, which also is the only such program in the United States.

“NOV has made an important investment in UH’s efforts to build a premier graduate program in subsea engineering. We are grateful to NOV for recognizing the value of this ambitious energy initiative,” said Matthew Franchek, founding director of UH’s subsea program and a mechanical engineering professor.

“The subsea engineering graduate program is part of UH’s ongoing efforts to support the area’s energy sector,” Franchek said. “With NOV’s help, this program will produce students with the skills needed to overcome the unique challenges of deepwater exploration.”

The Texas Higher Education Coordinating Board approved UH’s proposal to provide a graduate subsea engineering program, which is expected to begin in fall 2013.

Formed in partnership with the world’s leading energy engineering companies, the master’s program will include classroom lectures and hands-on software education for subsea systems design. Recognized experts in the industry will teach the courses.

Offshore oil and gas reserves are increasingly important sources of energy. Some experts believe that billions of barrels of oil and trillions of cubic feet of natural gas lie within federally controlled waters in the Gulf of Mexico alone. But these massive reserves lie underneath 10,000 feet of water, presenting unprecedented engineering challenges such as freezing temperatures, corrosive seawater and immense water pressure.

A subsea engineer is responsible for the design, installation and maintenance of the equipment, tools and infrastructure used in the underwater phase of the offshore oil and gas drilling and production.

Last year, UH began its subsea engineering certificate program in response to the oil industry’s increasing need for these skilled engineers. It was the first of its kind in the U.S. Subsea engineering typically has not been considered a distinct discipline in the U.S., but a number of universities abroad offer degree programs in the field.

The new subsea graduate program will dovetail into UH’s growing petroleum engineering program, which two years ago established an undergraduate degree program in addition to its graduate curriculum.

About the University of Houston

The University of Houston is a Carnegie-designated Tier One public research university recognized by The Princeton Review as one of the nation’s best colleges for undergraduate education. UH serves the globally competitive Houston and Gulf Coast Region by providing world-class faculty, experiential learning and strategic industry partnerships. Located in the nation’s fourth-largest city, UH serves more than 39,500 students in the most ethnically and culturally diverse region in the country.

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Drop in energy prices lowers the boom in Texas oil patch

August 1, 2012
by Zain Shauk

Falling oil prices halted a 30-month growth spurt in Texas’ oil and gas industry boom in June, a new industry report shows.

The Texas Petro Index, which has measured job numbers, rig activity, production totals, wells completed and other related figures across nearly two decades, dropped for the first time since a rush to draw oil from shale caused a surge of drilling in Texas.

The index fell to 270.4 in June from its recent peak in May of 271.5, which was the highest since rapid industry growth pushed it to a record 287.8 in October 2008.

A trend of declining oil prices added to already low natural gas prices to push the Petro Index down, said Karr Ingham, an economist for the Texas Alliance of Energy Producers, which released the study Tuesday.

He said the number of active oil and gas rigs in Texas has fallen further in recent weeks to 900, the lowest level since September 2011, as companies have reassessed expensive operations that are no longer yielding high returns.

Not coincidentally, he said, oil prices have fallen from near $100 in early 2012 to about $79.08 in June. Benchmark crude lost $1.72 Tuesday to end the day at $88.06 per barrel.

Companies may have grown more cautious about aggressive drilling operations, but the leveling off doesn’t necessarily mean a bust is on the horizon, said Michelle Michot Foss, chief energy economist for the University of Texas Center for Energy Economics.

“They’re trying to get a feel for what the price trajectory could be and it’s affecting decisions,” Foss said. But, she added, “I think you would need a much, much more substantial fall in prices to see a really serious drop in activity.”

Contraction ahead?

Texas employment in the fossil-fuel exploration and production industry hit a record of 251,600 in June, Ingham said. But he noted some indicators that point to possible contraction ahead. Texas crude oil production is at its highest level since 1999, but the weakening world economy is pushing demand down, he said.

That has left resource prices languishing.

The recent 30-month rise in the Texas Petro Index was almost exclusively fueled by oil drilling because low prices have curtailed natural gas production relative to its levels in previous expansions.

The monthly average value of Texas oil and gas production exceeded $9 billion in 2008 but has been around $6 billion during the most recent peak in the index, Ingham said.

During the current shale-driven boom, however, employment has soared well above levels in October 2008, he said.

If declining prices bring about a further reduction in drilling activity, Ingham said, “employment will ultimately be affected and there’s of course no way it could not be.”

European crisis

Turmoil in Europe and a weakening domestic economy have also affected the industry by depressing oil prices, Ingham said.

“All of these terrible things happened in the second quarter and sort of threw a little bit of rain into our parade,” he said.

But Texas oil prices and drilling activity may not be as influenced by broad economic trends as they may have been by recent pipeline developments, said Ed Hirs, a professor of energy economics at the University of Houston.

A recent increase of pipeline capacity bringing oil to the U.S. Gulf Coast may also be pushing prices down, he said.

“Right now you’ve got more domestic supply coming online than the country is accustomed to handling,” Hirs said.

The alliance’s index dates to 1995, when the index was set at a base level of 100.

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