What the industry expects in 2007

Following an energized year, innovation is crucial for 2007 and beyond

Jack B. Moore, President, Cameron Drilling and Production Systems and Senior Vice President, Cameron; Chairman, Petroleum Equipment Suppliers Association, Houston

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.

Add to that the maturing of key oil provinces, like the US and the North Sea, and the need for a boost from technology becomes even more compelling. Where will this technology come from? Without a doubt, the lion’s share will come from service-and-supply companies. Last year, the six major service companies reinvested about 2% of their revenues in research and development.

As Chairman of PESA, I have the privilege of taking a front row seat to the best that the service-and-supply sector has to offer. Let’s take a look at just a few of the promising technologies that our members have developed.

Extended reach, multilateral and ultra-deep drilling. Drilling inevitably must go deeper and, in so doing, overcome the challenges of pressure, temperature, torque and tension, among others. If reserves can be added in multiple zones from a single wellsite, overall production declines can be mitigated and well productivity enhanced. The application of improved drill pipe materials is likely to help overcome some of the challenges of ultra-deep drilling and push the current limits of ultra-deep wells.

All-electric subsea systems. This technology, a Cameron product, is one that I am very excited about. It is the world’s first all-electric subsea production system. The technology is significant to the industry, as it eliminates subsea hydraulic systems and all the worries that go with them. Using electric power rather than hydraulics, control system commands can be sent in rapid succession and avoid the lag time needed for accumulator charging. It allows nearly instantaneous communication with equipment and feedback on subsea conditions. It also reduces safety and environmental concerns, as the potential for hydraulic fluid leak and disposal of used fluids is a thing of the past. The system can deliver at limitless water depths, and it allows step-outs well beyond 100 mi. This translates into more uptime, more production and better return on investment for operators.

Intelligent wells. Intelligent completions use real-time production and injection management systems to place process controls downhole. They provide acquisition of downhole production and/or reservoir data, analysis of data to optimize production, and remote control of flow. The systems can change flow characteristics while minimizing interventions and their associated cost, risk and production downtime. This technology has been around for a while, but it is now maturing to a point where it is likely to make a significant impact on completions and reservoir yield.

Subsea boosting and processing. Subsea production, now critical to the addition of global reserves, is challenged by the same factors faced on land – insufficient flowing pressure, produced water and multiphase flow. Subsea multiphase boosting on the one hand, and subsea separation or injection on the other, are evolving into critical enablers for new subsea developments. Within 10 years, many, if not most, new subsea developments will include either multiphase boosting or subsea separation systems, compression systems or injection systems. In this instance, the new technology will come both from the industry and from the power, defense and pump manufacturing sectors. System solutions will be needed, and some are appearing already.

Seismic data whitening. 3D seismic data have long been available, but new technology is clearing the picture. New algorithms have been designed to enhance 3D seismic data and improve structural interpretation of geophysical data by enhancing the high-frequency spectrum. They extend the usable frequency bandwidth for structural interpretation without introducing noise, amplitude or phase distortion. This technology will enhance structural continuity, boost resolution, and optimize the amplitude and phase consistency. The result is improved reservoir characterization.

Technology is our greatest asset. We must continue to develop technology and services that accurately locate commercial hydrocarbon reserves, accelerate production and ultimately increase production.

As we continue to search for hydrocarbons in even more remote and difficult-to-reach areas, we must provide solutions to the challenges faced by our industry. Continued advancements in exploration and development technology will not only ensure our industry’s success, but also provide the resources vital to continued economic growth.

THE AUTHOR
	Jack B. Moore is president, Cameron Drilling and Production Systems; senior vice president, Cameron; and chairman of the Petroleum Equipment Suppliers Association. He joined Cameron in July 1999 as vice president and general manager, Western Hemisphere, and was named to his current position in 2002. Prior to Cameron, Mr. Moore was with Baker Hughes Inc. for 23 years, where he held numerous management positions, including vice president, Latin American Operations; vice president, Eastern Hemisphere Operations; and vice president, Western Hemisphere Operations. He holds a B.B.A. degree from the University of Houston and serves on the boards of directors of PESA, Spindletop, the University of Houston Bauer College of Business Dean’s Executive Advisory Board, the University of Houston Chancellor’s Advisory Council, and Memorial Drive United Methodist Church’s Board of Stewards.