December 2015 /// Vol 236 No. 12

Industry leaders outlook 2016

Innovation and collaboration will overcome the downturn

The oil and gas industry is in rough waters. Especially across the service/supply community, the downturn has been, and will continue to be, rocky and, in many cases, painful.

Gary Halverson, Cameron International

The oil and gas industry is in rough waters. Especially across the service/supply community, the downturn has been, and will continue to be, rocky and, in many cases, painful. While we are focused, understandably, on managing through until the market recovers, where should service/supply companies concentrate, no matter their product, service or size? Those that will emerge strongest will have focused strategically on innovation, collaboration and investing in human capital. It’s up to the industry, to tackle the challenges and enhance our long-term global competitiveness.

Innovation. The world is experiencing a global shift with dramatic political, economic and industrial changes. In this environment, technical innovation is crucial for success. Innovation has allowed us to achieve what was once unimaginable, and has led to a resurgence of energy supply. Technological innovations are also powering a manufacturing resurgence, generating new investment and providing economic incentives to reshore manufacturing jobs that seemed lost only a decade ago. As billions of dollars are invested in new businesses, thousands of dollars are saved in household energy costs; rent and royalty payments are paid to private landowners; and tax and royalty revenues are generated for all levels of government.

Integration of combined services is the key to maintaining innovation in a low-cost environment, with solutions that are quickly deployable, scalable and addressed to specific needs. Full integration of the service/supply sector is about listening, understanding, and bringing solutions to the table, not simply selling products and services.

PESA supports policies that promote inherent business principles for a pro-innovation, pro-jobs and pro-security energy policy that advances the important role that the service/supply sector plays. This sector-wide commitment to innovation, and focus on efficiencies, is part of the foundation that will see us through the downturn.

Future innovation in the industry will be driven by collaboration. Foresight and planning are an opportunity for long-term success, and moving forward offers tremendous business potential for suppliers and service organizations throughout the supply chain. In effective collaboration, industry must also engage public stakeholders, developing trust in the community. This collaboration affords our right to operate in a responsible, safe manner with lasting benefit. Supporting the crucial health and safety efforts of our employees, customers and contractors, as well as minimizing environmental impact in the communities where we live and work, is a top priority.

Current market conditions require internal collaboration to increase production efficiencies and maintain profit margins. The outlook beyond the current cycle offers long-term, bottom-line success, if focused on efficiencies. PESA is working with our members to catalyze collaboration between operators and suppliers, to foster and preserve institutional knowledge, and create opportunities to network and share best practices.

Human capital. When dollars have to go further, we strive for ways to leverage human capabilities. In doing so, we will drive down costs and shorten cycle times. Human capital is the most important factor affecting the energy industry. In 2016 and thereafter, M&A activity among the service/supply sector and the operators will spur difficult workforce decisions.

Yet, we must not lose sight of investing in human capital. Workforce development for the men and women supporting operations all over the world is critical to our competitive advantage. We also understand the need to ensure that our workforce mirrors our industry’s diverse global footprint. Women represent 19% of all oil and gas employees, and we need to do better than that as an industry.

Our industry has a great heritage of turning obstacles and challenges into achievement. Maintaining focus on innovation, collaboration and human capital will sustain and support our sector through this time and help us emerge stronger, smarter and more efficient. Leveraging external resources like PESA will allow our industry to do more with less. wo-box_blue.gif

The Authors ///

Gary Halverson was named president, Drilling & Production Systems, at Cameron International in October 2013. Previously, in October 2012, he was named senior vice president of Cameron International. Before that, he held the position of president of Surface Systems since October 2005. Mr. Halverson joined Cameron in 1978 and has held numerous management positions throughout his career in the U.S. and overseas. He served as director of sales and marketing for Asia Pacific-Middle East, based in Singapore; general manager of Latin America; and vice president and general manager for the Western Hemisphere, based in Houston. Mr. Halverson is a graduate of Odessa College. In addition to being PESA’s chairman, he is also on the board of the general committee of special programs (GCSP), API; the board of Well Control Institute; and a U.S. delegate to the World Petroleum Congress.

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