Executive Oil Conference: Takeaways
Lee Tillman: Marathon President and Chief Executive Officer urged the industry to follow the lead of other industries such as medicine, aerospace and retail in leveraging its large sets of data to improve. He said companies such as Netflix and Google utilize machine learning to identify trends and wondered why the oil and gas industry can’t leverage its data the same way
He is optimistic about how the industry, and Marathon, will develop new technology that will boost efficiency and cost-savings and improve well performance and, more importantly, do it safely.
“Creative solutions have made step changes in our business, and innovation has been the driving force in our industry for over 150 years,” he told the gathering.
But innovation can no longer come in steps. He called for improvements in 2-D seismic, 3-D seismic and microseismic but even more so in the digital space, with the industry leveraging the large data sets it has to address new and ongoing questions: “Where should I drill? How far apart should my wells be? How much will they produce?”
Bruce Niemeyer: vice president, Chevron North American Exploration & Production Co., said his company isn’t chasing high initial potentials or rapid development, but instead is focusing on capital efficiency, “the foundation of being successful.”
What’s as important, he said, is “what happens 30 years after the well is placed on production.”
Raoul LeBlanc: vice president, HIS Markit, observed, “We’ve filled the pantry but we’re not incubaint new plays. That’s a limit in the long-term.”
Michael Hanson: founding member, Parkman Whaling LLC, warned of a couple of regulatory hurdles that will raise costs in the coming months. One is air emission regulations covering oil field engines, and the second is the new e-log technology that trucking companies will have to install – not just the cost of the technology itself but the impact on transportation costs.
Jay Boudreaux, managing director, Simmons & Co. International, said his company is seeing clients turn to technology such as artificial intelligence not just to control costs but manage future expenses.
Investors, Hanson said, are telling operators, “You’ve acquired enough acreage. Now, go figure out what you’ve got.”
Michael Wichterich: president of Three Rivers Operating Co. III LLC, said “We’ve gone from 200 rigs last year to 380 rigs. Everything is more expensive. Execution is terrible. Truckers can make $1,500 to $2,000 a day.”
“It’s tremendously inefficient at this point. It will get better; it will get more efficient but until we get full development it will take a while,” Wichterich said. “We’re two years away from efficiency. Execution is our biggest issue and we’re stuck with it for a year or two.”
Maynard Holt: chief executive officer of Tudor Mergers and acquisitions. Tools to improve margins, said Maynard Holt, chief executive officer of Tudor, Pickering, Holt & Co. Inc., but technology may be a more effective tool. He said companies should use technology such as analytics, artificial intelligence and robotics to look at margins.
Jeff Miller: president and CEO of Halliburton, credits hydraulic fracturing as “almost singlehandedly” leading the shale revolution. “Just like in 1949, it continues to rejuvenate oil-bearing formations,” he said.
However, “it’s never just one thing” that’s responsible for success in oil and gas recovery. “Innovation happens in a lot of different ways,” he said, adding that what’s critical today are understanding the reservoir, developing new technologies, scaling processes and improving transportation to meet the demands for the oil and gas industry.