Planning a sustainable future

OE Staff

July 1, 2017

Where technology and collaboration can help the industry reduce the cost per barrel in a sustainable way will be a strong focus at this year’s SPE Offshore Europe, says conference chairman Catherine MacGregor, Drilling Group President, Schlumberger.

Catherine MacGregor. Photo from Schlumberger.

This time two years ago, we were heading toward SPE Offshore Europe 2015. It was just over a year into the downturn and perhaps many were still hopeful that the pain would be short-lived. They will have been disappointed and the backdrop of almost three years in a downturn will be hard to avoid at this year’s event although we are starting to see signs of recovery. On a more positive tone, this period offers as many opportunities as there are challenges for the industry to re-invent itself. We are actually starting to see a number of initiatives moving in that direction.

Exactly how some of the biggest players see the current environment will be discussed at the event’s opening plenary, which features Shell CEO Ben van Beurden, BP Group CEO Bob Dudley, Petrobras CEO Pedro Parente, and Wood Group Chief Executive Robin Watson.

“The context remains a challenged industry,” says Catherine MacGregor, Drilling Group President, Schlumberger, chairman of this year’s SPE Offshore Europe, being held 5-8 September in Aberdeen. “But, it must be recognized that even at US$100/bbl, for some, projects were already uneconomical.” In other words, the industry was already in need of a change and that change has been happening.

“Our industry is tackling the problems in many different ways,” MacGregor says, who joined Schlumberger as a drilling engineer, working in Congo. “One of them is the application of new technology to reduce cost.” Another way is embracing the digital era. “Other industries are embracing it as a very core topic and our industry is taking it on. This is very exciting because it has a huge potential to change the way we work and significantly bring our industry costs down in a sustainable way.

“Disrupting and digitizing our industry, harnessing technology to shape all aspects of our industry, including automation or remote operation... That’s the prize. It is not easy to do, because there are so many interfaces. But, it has the potential to shake up who we are and continue to make us attractive to young talent. People who are coming in to the industry today are digital natives. They will be looking to go to work with digitally transformed companies.”

But, while digitalization can take us so far, reducing costs and manning, improving and enhancing operations, performance and subsurface understanding, and how companies interact and work together, will also be in the spotlight. “When you look at some of the big development projects, there have been a high number with delivery and cost overruns, even delays to production start-up, and technology issues,” MacGregor says. “There has been a lot of analysis around what happened. One issue identified was that the relationship between the operator and contractor or suppliers was not necessarily conducive to the best collaboration or the best outcome.”

Offering different models is even more important for mature basins like the North Sea, MacGregor says. It’s about real commercial alignment, setting out a project with real collaboration. All this can only happen when trust is established between different players. It’s about a mindset, not just a contractual relationship. Technology, workflows, solutions, are going to be developed and they cannot just belong to one side or the other.”

The North Sea has other unique challenges, such as its interesting reservoirs and some very thin sands, MacGregor says. “Placing the well in the sweet spot to maximize contact, hard to drill abrasive formations requiring ruggedized drilling systems, are just a couple of the challenges,” she says.

While the industry is conservative, especially when it comes to trying new technologies, MacGregor says technology that has value is getting attention. “We’ve seen over the last three years, operators are quite keen on new technology that adds value,” she says. “And it’s the introduction and adoption of technology that’s important – the appetite to field test new technology and try new things. It will be exciting to discuss some of these technologies in the conference.”

This year’s SPE Offshore Europe will feature a Technology Zone and a Tech Trek, highlighting new technologies on show, as well as a Decommissioning Zone, reflecting the increasing activity in this space.

While few imagine oil prices will rise to pre-mid-2014 any time soon, the risk could be there that the industry reverts to its bad habits. However, MacGregor thinks this downturn has been more of a wake-up call and that sustainability has become a key theme.

But, to sustain itself into the future, following a period of deep staffing cuts and experience loss, recruitment and training will need to continue, she says. “It is very clear we are going to have to recruit new talent to our industry to replenish the bench.”

Technology could play a role here, however. “If there were to be skills shortage, some of the technology uptake could help us mitigate the risk in not having enough experts, by sharing experts across several facilities and operations, having operations centers that monitor facilities,” she says.

“The industry is working on mitigation measures. However, we still have to continue to recruit people, develop expertise and be attractive as employers. Modernizing how we work is fundamental and will help us catch up on the lag our industry has on the digital front. We are at a time when there’s no turning back. It’s just a matter of change, which comes with many exciting opportunities.”