Service/supply sector will be called on to do even more

CHARLES E. JONES, former President, Downhole, Drilling and Subsea, Forum Energy Technologies; and Chairman, Petroleum Equipment Suppliers Association (PESA)

The oil and gas business is at an unusual juncture in our history. We’re faster and more efficient than ever in solving subsurface engineering problems, and our industry now has a decades-long inventory of known, productive drilling locations in the U.S. The U.S. recently passed Russia and Saudi Arabia as the top oil and natural gas producer in the world. Oil and natural gas supplies are not constrained by resources any longer, but, instead, by above-ground issues.

At a news conference on Oct. 8, 2013, President Barack Obama called the trend a positive economic indicator. “This year, for the first time in a very long time, we're producing more oil than we're importing,” Obama said. Rep. Steve Scalise (Rep. – La.) said that the president shouldn't claim too much credit. He said the expanded production has occurred “despite” administration impediments, including overregulation and limits on drilling in government-controlled waters and on land.

The president has said that the administration deserves credit for an “all of the above” energy policy that includes traditional oil and gas production, plus alternative fuels and conservation, to reduce U.S. dependence on foreign oil.

Innovation is not an option—it’s a must. Production is more complex, more expensive, and occurs in more extreme environments. That leaves far less room to make mistakes. We have to constantly challenge ourselves to innovate, to rethink old solutions, to achieve what seems to be impossible.

That means more and better technology. But survival means accepting the fact that we must do even better. Where will this technology come from? Without a doubt, the lion’s share will come from service-and-supply companies. As chairman of PESA, I hold the privilege of having a front row seat to the best that the service-and-supply sector has to offer.

Downhole fluid analysis. Halliburton introduced its Integrated Computational Element (ICE Core) fluid analysis service during October 2013. Previously, optical analyzers could tell an operator when a sample was pure enough to collect, but rarely could they describe which fluid components were present, and in what proportions. ICE Core fluid analysis technology delivers this information. Halliburton’s new technology is well-suited for downhole fluid analysis, including applications in deep water, exploration, sample validation, fluid analysis between samples, where flow assurance is an issue, when mapping water floods, when determining reservoir connectivity, when determining compositional grading of reservoir fluids, and to see if fluids are changing.

Subsea intervention services. Oceaneering International has commissioned the construction of a subsea support vessel that will be U.S.-flagged and documented with a coastwise endorsement by the U.S. Coast Guard.  M. Kevin McEvoy, president and CEO, stated, “Deepwater drilling rig use in the Gulf of Mexico is currently at a historically high level of 40 rigs, and recent industry market reports have forecast that it may grow to as many as 60 rigs by the end of 2015. Our vessel will be equipped to perform increasingly complex deepwater field development installation work and life-of-field IMR projects resulting from the increased drilling activity. In particular, this vessel will have a crane that is capable of handling lifts, 100 greater than any of the vessels we currently operate. This will increase our capability to meet our customers’ demand to safely handle heavier subsea payloads in deeper water depths.”

Deep-sea tech proposed for shale drilling. A key technology frontier for the shale gas industry will be found in an unlikely place—10,000 ft down, at the bottom of the sea. Johan Pfeiffer, V.P. of surface technologies of FMC Technologies, says tough, compact equipment required to handle remote, deep sea-bottom operations will become increasingly important to shale gas drillers. “We believe we're going from an industry that is very fragmented, involving smaller players and not a lot of technology, to an industry where technology is going to be introduced,” said Pfeiffer.

American ingenuity fuels our industry. The industry’s positive impacts are astounding. Among the few U.S. employment bright spots, the energy complex stands out. Domestic energy employment has already shown impressive expansion, principally as a result of the surge in unconventional oil and gas development. Data from the Bureau of Labor Statistics shows that the U.S. oil and gas industry employed 971,200 people in 2012, up 7% from 2011. The industry paid a national annualized average wage of $107,200 in 2012, more than 119% percent greater than the national average, private sector wage of $48,900. 

Our industry’s future will live or die by technology. It’s a testament to industry innovators that we’re able to produce at a level today that was not even dreamed in the not-too-distant past. We can, and will, do better.

As we continue to search for hydrocarbons, in even more remote and difficult-to-reach areas, the sum total of our innovation is that we’re providing solutions to the challenges faced by our industry. Continued advancements will not only ensure our industry’s success but also provide the resources vital to continued economic growth.