Executive viewpoint: Yesterday’s milestones shape tomorrow’s paradigms

DEREK KAMP, VICE PRESIDENT OF OIL AND GAS, CATERPILLAR INC 

Modern oil and gas production has been the foundation of the energy industry for more than a century, and Caterpillar has dedicated roughly 80 years of its 100-year existence to anticipating and serving the needs of oil and gas companies for a sole purpose: to help our customers build a better, more sustainable world. This singular focus continues to drive our work ethic, research and development (R&D) efforts and on-the-ground support as the industry evolves.  

We’ve witnessed pivotal changes in the oil field over the years. The North American shale revolution triggered two key inflection points for the industry – the prioritization of safety in the field and an unrelenting focus on efficiency improvements. Worksite and industry standards not only protect crews, but also their surrounding communities.  

Changes to equipment. Globally, equipment makers and service providers responded to these turning points in many ways. Every type of oilfield equipment now includes multiple safety features engineered for precarious conditions. Multiple types of technologically advanced controls that help mitigate catastrophic failures are now standard. From complex algorithms that eliminate the need to manually stop and start drilling rig engines to simple coverings that protect workers from hot equipment surfaces, each aspect of a machine’s operation is carefully considered to ensure the inclusion of appropriate safety enhancements. From exploration and production companies (E&Ps) to drilling and completion services providers, ensuring wellsite safety is paramount to promoting workers’ wellbeing on the job. 

Efficiency improvements have manifested in many forms. As fuel represents one of the greatest expenses that operators incur during a job, innovations designed to lower fuel consumption and costs —regardless of the preferred fuel source—are prevalent.   

Using natural gas in operations. Whether using a reciprocating engine or turbine, many operators increasingly seek to use natural gas to power operations. Caterpillar's first natural gas engine, the Cat^® G300 Series, was introduced 70 years ago and many 6.25-in. bore engines are still used in gas compression applications today. Also, dual-fuel technologies like the Cat^® Dynamic Gas Blending (DGB) engine provide well service companies and drillers fuel flexibility while reducing fuel expenses without sacrificing performance.   

Similarly, the Caterpillar Gas Mechanical System allows companies to power completion activities with 100% gas to help lower overall sitewide diesel use and greenhouse gas (GHG) emissions. Gas turbines, like those supplied by Solar Turbines, provide high-power density diesel-free fuel for production power applications. Whatever fuel source an operator prefers, multiple options are now available to power oilfield operations and satisfy any operating requirement.  

M&A effects. Interestingly, the quest for increasingly greater efficiencies influences today’s R&D efforts, as well as oilfield companies’ strategic merger and acquisition (M&A) activities. As the shale revolution evolved, companies looked for ways to improve their overall operational efficiency by adding auxiliary services that could positively impact their primary service offering. For example, several hydraulic fracturing companies vertically integrated sand handling and wireline services to foster tightly integrated operations that enable crews to immediately respond to changes on site. Today, service providers offer fully integrated solutions to the industry to maximize operational efficiency. 

Efficiency-driven M&A activity isn’t limited to oilfield service providers. Caterpillar’s acquisition of SPM Oil & Gas, for instance, enables sitewide optimization and integration from the flywheel to the wellhead. Furthermore, we have enabled our customers to be more efficient by providing power ends, large bore and frac stacks as a service. Now, those operators can show up on location and immediately start pumping, rather than spending time rigging in. 

The prioritization of safety and efficiency continues to inspire and transform tomorrow’s oil field. Greater deployment of digitalization will see more command centers proliferate to enable greater remote monitoring and control of drilling and fracing operations. Such centers, made possible by innovative technologies like Cat Smart EMS and artificial intelligence (AI), allow crews to safely make real-time adjustments from anywhere in the world and instantly respond to changing load demands.   

Future efficiency gains for the upstream will also be influenced by best practices gleaned from using gas gensets to power midstream activities. Previously, companies that wished to operate on natural gas relied on transporting that fuel to the site by truck, or by constructing a pipeline before drilling the first well. Tomorrow’s oil field will benefit from enhanced infrastructure to offer increased access to pipelines at the wellsite to further reduce transportation-related GHG emissions and fuel costs. 

As we look ahead to the next 100 years, growing global energy demand will spur further advancements that enable oil and gas resources to be accessed safely and efficiently. The ability to produce oil and gas in a manner that reduces GHG emissions marks an important paradigm shift. Additionally, it enables the industry to continue to be a fundamental part of a multi-source energy mix.  

It's an exciting time to be in oil and gas and help drive the innovations that will shape its future.  

DEREK KAMP is Vice President of Oil and Gas at Caterpillar, Inc. He has empowered oil and gas companies to optimize operations for more than 20 years.