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This week is a quick post about what may be an interesting trend in the US Land Oil & Gas Sector…Interest in Automation and Optimization technologies to increase efficiencies. I have a theory on why. AND, #Disclaimer, I mention the service offering I work with.
Historic Interest in Automation
Historically, there are always early adopters for technology, and the oilfield is no different. You have a few entities that want to be on the cutting edge of everything, a few tire kickers, and the majority don’t want to spend any money until something is proven to them. Such is the case with automation and optimization, from the perspective of the offering we have (BaraLogix Equipment & Services).
Offshore
We initially provided the optimization and event detection service offshore. This was before the equipment was ready to ready to be deployed commercially. Actually, it was still in development. We had a few jobs here and there, but not a lot of buy-in. Even with customers that benefitted from significant value from it, it seemed the response was always something similar to “Maybe you actually did help us achieve our goals, but maybe it was something else…” or “We don’t have the authority to sign off on this case history saying that you brought us value.”
So we did jobs here and there, but there was never a consistency to the work.
Land
As far as land work was concerned, due to different economics, the service was always outside the client’s budget. In fact, the only time we did provide the service on land, at least in the US, was when conducting trials of the equipment.
Fast-forward to today…
We now have customers in the US Land area that are interested in what the service and equipment can provide them. There are three jobs starting up in the next three weeks or so that are a mix of the combined equipment & services or just the standalone service.
My thoughts jump to “Why now?”
What I suspect is that over the last 3-plus years, operators have been increasing their efficiencies to stay relevant at lower oil prices. And possibly they have plateaued. Now, they want to take that next step and increase efficiencies even more. I think that may play a big part in the sudden interest in our equipment and services.
What do YOU think could be driving this?
And, as always, let me know what you think in the comments. Ask questions, tell your story.
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Why now? A few guesses:
– The land operators are running lean. If $/bbl continues to improve or stabilize, activity will increase. Will automation help them scale up their number of rigs and maintain their efficiencies? Otherwise they have to hire more people, develop them, and lean on service companies doing the same – increasing cost, time and NPT.
– Other automation has been deployed on the rig and in production. It’s not the ‘big unknown’ it seemed to be 5 years ago.
– Your tech is more mature with a longer track record than it was 5 years ago. They may still not be able to pin down the value… but they likely have more confidence it won’t break shit or lead to the wrong decision.
– US Land is where the action is these days. It makes sense to deploy it there.
– The drum you’ve been beating for years has broken down their defenses.