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Coming off of a year like 2006, it is difficult to expect the oil and gas market to get much better. Exploration and production activity will continue to be determined by global economics and political factors, but drilling and producing costs and technical performance play a key role, as well. Accordingly, future growth in the oilfield service industry will require renewed attention to several issues we have addressed successfully before, especially productivity improvement and new technology development.
In the 1980s and 1990s, new technologies introduced and/or developed by the service industry, like 3D seismic and ultra-deepwater drilling and production, transformed the industry. New or improved drilling and production technologies shortened drilling time, improved production yields, enhanced exploratory success rates and made some previously uneconomic wells profitable. More recently, proven reserve additions have been more difficult to ensure, even with the best of technology.
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