Industry leaders voice thoughts on unconventional technology trends to full house at URTeC

HOUSTON -- It didn’t take long on Monday for officials at the Unconventional Resources Technology Conference (URTeC) in Houston to realize that attendance at the event will far exceed their expectations, with some technical session rooms swamped beyond capacity. And the simple reason for this is that as unconventional activity in the U.S., particularly shale plays, continues to recover, the technical content at URTeC is again a hot commodity.

A case in point on Monday afternoon was the panel session on “Technologies that will make a difference in unconventional reservoir E&P.” In a room set to seat roughly 400 people, every chair was taken, and approximately 80 additional attendees were curled around the back and side walls of the session. They all had come to hear the thoughts of high-ranking technical executives from three operators and one service company, and the panel did not disappoint.

As moderator of the nearly hour-and-a-half session, ConocoPhillips Chief Technology Officer Greg Leveille did as masterful job of feeding questions to the panel and getting many sound, enlightening answers. Number one on the question list was how operators’ quest for efficiencies is increasingly tied to the digital transformation that is sweeping the upstream industry, and how the use of data analytics is changing the way in which the industry works.

“You look at how we have grown the U.S. production in such a short amount of time, and yet we’ve done it in a vertical world for the horizontal wells,” offered Chris Cheatwood, executive V.P. and chief technology officer at Pioneer Natural Resources. “But in the future, we have to do things differently, if we want to keep that growth curve going. Data analytics will be a tool for this.” Building on Cheatwood’s comments, Chris Spies, the V.P. of Geoscience and Technology at Concho Resources, noted, “The amazing thing, about watching unconventional production grow over the last five years, is that there really hasn’t been a major technical breakthrough. It’s mostly been relatively minor tweaks.”
From his viewpoint, “the downturn was really a blessing in disguise,” said Yanni Charalambous, V.P. and chief information officer at Occidental Petroleum. “The true test of a company is making money in a downturn. Finally, the oil and gas industry is finding that data is something to be managed, and we’re realizing a lot of opportunities.”

As the lone service/supply company panelist, NOV’s corporate V.P. and chief technology officer, Hege Kverneland, found herself in the unique position of having to speak for her entire side of the industry. Choosing her words carefully, Kverneland said that “the downturn is a good thing in terms of implementing new technology. But the downturn has been very brutal—we’ve (the industry collectively) lost a lot of money and people. But at least the oil companies are listening to us now. I’m from Norway, so I come originally from the offshore side of the industry. But I’m always telling the offshore people to look to the shale side, to see how to do things better.”

Looking for trends, Leveille asked the panel, “what’s going to carry the industry another leap forward?” Appearing to react instinctively, Kverneland declared, “automation in general.” And there are some good reasons for that, she explained. “The use of much more automation on existing rigs will allow drillers to pay much more attention to what is going on downhole. I’m amazed that we’ve done so much for so long without more of this (automation).”

Charalambous then asked, “is there an autonomous oil field in our future? I think the digitization could be sending us in this direction.” Spies tried to broaden the response by musing as to whether chemicals could play a larger role in oil field production, but Cheatwood quickly went back to automation. “I’m going to stay on the autonomous side,” he declared. “When you think about it, what we do is manufacture wells in the shale plays now.” Cheatwood left the audience somewhat confused when he added, “Why can’t we make our wells like Tomahawk missiles? We can program them and then leave them alone.”

Leveille’s final major topic for the panel was manpower issues, and how they are tied up with automation and the digital transformation. “So what about the people side of this?,” he asked.
“People hate change,” thundered Cheatwood. “So, you have to understand that and embrace it. You have to bring the people in (to a new way of doing things) and make them part of that change. Many employees are worried about their jobs, and understandably so. But what I would tell them is ‘what may happen, is that your job may not go away, but it may change.’”

Spies continued Cheatwood’s thread when he said, “putting your head in the sand is not the answer. Let the people be part of the change and embrace it. You very much have to embrace it.” But Charalambous had a little different view on the subject. “I don’t buy that everything will be done by machines,” he explained. “The digital world allows people to do more. It advises you as to what needs to be done. In one way, the efficiencies gained might allow you to drill 10 wells instead of five wells. That would actually create more activity and put more people to work. The machines, themselves, can only do so much.”

Kverneland brought down the house, when she said that perhaps she should not comment on the subject, since “voice recognition systems never understand me. They refuse to recognize my voice. I hate that!” But turning serious again, Kverneland noted that “we (the industry) need to attract the younger talent. I’m very much optimistic about the industry’s future, which means we need more new technology. But we also still need people to fix machines. How we do things is going to be quite different in the future.”

Shifting into the Q-and-A period, one audience member asked panelists why it is so difficult to get operators (and service companies) to share data and other information. Perhaps the best answer came from Spies, who said, “yes, there’s a big sense among industry companies that ‘I want to cooperate and collaborate on data.’ But the truth is that given all the public companies involved, and their sensitivity to share prices, there’s a real reluctance to possibly giving away a competitive advantage by sharing data.”