Baker Hughes executive sees trend toward encompassing solutions continuing

Interview with Paul Madero, Senior Vice President, Baker Hughes 

Within the overall realm of oilfield equipment and services, solutions to production problems and challenges, particularly encompassing solutions, have come to the fore in the last several years. This trend appears to be gaining momentum, as further refinements in the technologies are made. During the Baker Hughes Annual Meeting in Florence, Italy, during early February, World Oil Editor-in-Chief Kurt Abraham had an opportunity to sit down with Baker Hughes Senior Vice President for Production Solutions Paul Madero and get his take on the progress being made in this sector. What follows is the text of that conversation. 

World Oil (WO): We’ve heard a fair amount from your company about encompassing solutions. What comprises these solutions, and when did that get started?   

Paul Madero (PM): I think we've been on a progression, probably over the last seven or eight years, with that kind of orientation towards solutions. I’d say over the last three to three-and-a-half years, there was a critical milestone, when we really organized into segments and solutions, and it was a reflection of those segments.   

And, being in the industry 20 years and knowing what we've heard from our customers, it seems like the industry has come to realize that we've pretty much optimized a single service or product about as much we can. There are always times where we're going to iterate. After all, we're engineers, and we're technical and want productivity.  

But obviously, if the engines are optimized, but the transmission is not, you don't get any additional horsepower to the tires.   

So, the next frontier of value harvesting is in the integration and optimization of the system, the solution and the outcome. Not only is that what our customers want, it's what the industry needs. The world needs as many barrels, as much energy, as we can generate. That’s the shortest cycle, the lowest cost, the lowest-carbon barrel possible. And so, that's why it's very nice to integrate and have these conversations, because then you focus more on outcomes versus products and services.   

WO: You said that this began to really come together about three or four years ago. Do you feel like at this point you're much more optimal in these solutions? Have you got it refined to where you want it to be?  

Fig. 1. The InjectRT service automatically optimizes chemical treatments, based on flowrates and flow types, to extend the life of ESPs and wellsite equipment.

PM: Yeah, absolutely. I think it's always an evolutionary process. Every year, we make more and more progress. Some of the solutions worldwide are like that. Last year, we had an article in World Oil on a new automated chemical injection system—that's a great reflection¸ Fig. 1. That solution has applicability in the majority of wells all over the world, and I think the industry and our customers continue to see the value of that. They're also transforming and transitioning into more of that solution mindset, which makes it easier to move.   

WO: What do you think are some of the more difficult problems on which you can bring these solutions to bear?  

PM: It strikes me that, as an industry, we invest a lot of money in finding the hydrocarbons. We invest a lot of money in drilling for the hydrocarbons. We invest a lot of money in stimulating those hydrocarbons. But that last mile, when we actually monetize all that effort, it’s actually a very manual effort. That’s very interesting, actually.  

So, a lot of the effort has always been putting more focus on production. From a production standpoint, there are some very fundamental items that we believe we're uniquely positioned to be able to unlock. We can really deliver incremental production, lower costs and deliver short cycle barrels. It's in the production space, and it's improving the lift, increasing the lift, improving the speed of execution at the wellsite, finding the appropriate dosage of chemicals. That's all pretty significant.  

If you just look at our portfolio, our goal is creating the most efficient movement of the molecule from subsurface to surface to the transformation point. Because, once you get it on the surface, that's only about half the equation. Now, I have to get it across thousands of miles of pipelines to the refinery. I do think that when you look at that second phase in which some of our larger customers are involved and active—that midstream and downstream phase—you do say, “how do we move that molecule in the most efficient way?” I think that's pretty powerful.   

WO: We've discerned that one of the growing trends within the industry, as you're alluding to, is to squeeze out more barrels from mature assets—long-standing fields. So, what you're talking about fits with this trend. Are there any particular pieces of equipment that are key to it?   

PM: Absolutely. I would say first our automated field production is unique in that it's agnostic, modular and simple. So, we can deploy it very quickly.  

Fig. 2. Baker Hughes’s Leucipa solution has proven effective at optimizing production, reducing unplanned downtime, and improving efficiency and emissions via best-in-class, AI-powered automation software.

As you can imagine, the industry's been on a bit of a journey with digital. Some decided to build. Others decided to buy. And I think as we look back now, it's pretty clear that the industry is asking us for agnostic, modular, simple solutions. So, our Leucipa automated field production solution allows you to connect and really integrate your operations, whether it be the downhole equipment or topside equipment, and actually orchestrate it in the most optimal fashion, Fig. 2.   

Instead of doing single variable analysis, we're doing multivariable analysis, and we're doing it in real time. We're not doing it when Sally, Kelly or Joe wakes up in the morning and gets into the office. We're doing it 24/7 and putting better tools in their hands, so that they can drive better outcomes. So, first I would say digital. Second is our VSD Fusion Pro intelligent production drive, serving as our onsite intelligence. It gives us unparalleled reach into the ESP performance at the well site. And we believe that being completely vertically integrated in this space is absolutely crucial to being able to do that. And then we get the efficiency we're always looking for.  

The final one is the automated chemical injection technology we discussed earlier. When you connect our lift with our digital onsite intelligence and then with the chemical angle, then you're basically lifting every single barrel in the most optimized fashion. You're treating it with the most optimization.  

WO: And you're doing it without a great concentration of manpower.   

PM: And I feel that this is exactly what the industry and our customers are asking us for—to increase barrels per person and help me be as efficient and as low-carbon as possible. The beautiful thing is that I think all those three items actually intersect and are really driving in the same direction.  

WO: I would assume that they're also telling you that by getting more barrels out of the existing assets, it's actually saving money in the long run, because they don't have to go and drill more wells.  

PM: Exactly. That's why you've seen over the last couple of years that while well drilling has been down, production has continued to improve and increase. That's because we're delivering—I think—better and better production solutions every day. As we continue to evolve with our customers, I think the opportunity set is unlike anything I've seen in 20 years.  

It actually started in the unconventional revolution, when we got really excited at what we started in R&D. So, we had multi-stage frac, which had some patents, and plug-and-perf among other things. And then there was horizontal drilling—we thought that if we sold a couple hundred, that this was going to be fantastic. Today, horizontal drilling is the predominant form of drilling. We knew it was a special time in this space.   

From a production standpoint, it's even bigger. And I just think we're probably in the early innings of really realizing the value. I think the industry is going to be shocked in a couple of years to see how much better productivity we can deliver, when we're thinking about the outcomes.  

WO: Speaking of being in the early innings, where do you see things headed from this point forward?  

PM: I think we're getting close to reaching a tipping point. The reason I say that is there used to be, a couple years back, a “push” to get customers to change. Now, there's a stronger “pull.” And I think, as in everything in life, our customers are searching for that next area of value harvesting and to see if you're able to deliver proof points. Those proof points are very exciting and hard to ignore. I always think of digital as really being in three phases. First, it's “can I see what’s happening? Do I have surveillance?” Second, it’s “can I see it, and can I control it remotely?” And then third, it’s “I can I see it, I can control it, but can I actually automate it?” So, while today we're not in the self-driving car, I think we're quickly moving in that direction. Like anything, necessity drives speed in general.   

WO: So, you don't necessarily think that at some point we're just going to hit a wall and say, okay, that's it, we're as efficient as we can ever be?”   

PM: No, I think that you and I, if we're lucky enough, will be sitting here in a few years in Florence, talking about how much more production has increased, without drilling a whole lot of new wells.   

WO: What is the average recovery rate these days?  

PM: You've seen that there's been some progress. If you look at conventional or unconventional, what you're starting to see is if you can get 1% improvement worldwide, that’s worth a million barrels a day, right? So, it's pretty significant, if you take a look at last time from not treating with the appropriate chemical, or not lifting at the appropriate parameters, that alone can actually bring production to the front.   

There are some studies out there that show that the more flow and production you get on the front end, the better job you’re doing in sweeping the reservoir. So, you'd prefer to see as much of those hydrocarbons come up as possible. Given secondary and tertiary methods, I think that's why we're very committed to mature production solutions and the ability to ensure that we're striving for production optimization.   

WO: You wanted to mention a quick item on the downstream side of the industry.  

PM: The other thing I'd like to quickly say is that regarding downstream chemicals in the U.S., six out of ten vehicles have fuel that has been refined or treated by Baker Hughes. We're very active in the downstream chemical space, very active in the industrial space. We do think that being able to tie the entire value chain together is something you need.  

WO: That is really incredible.  

PM: It is cool. We do cool things. We don't always fully appreciate it, because we do them every day. But when you stop and look back and see where the world's headed and how we participate, it makes you want to get out of bed every morning.    

Baker Hughes Senior Vice President, Production Solutions, Paul Madero

PAUL MADERO is Senior Vice President, Production Solutions, at Baker Hughes. He is a first-generation American, born in New York City to parents who originated from South America. He started his approximately two decade-long career with Baker Hughes in Research and Development before moving on to roles in Sales and Marketing, Eastern and Western Hemisphere Operations, and Mergers & Acquisitions.  
 
Mr. Madero has lived on three different continents leading global businesses across all product lines, including drilling, completions and production. He earned his Executive MBA with Highest Honors from the University of Houston; graduated with a BS degree in mechanical engineering from Lamar University; completed the Duke Global Leadership Program; served on the Board of Directors for two JVs; and holds several patents. Mr. Madero has been serving in his current role as senior vice president of Production Solutions since Oct. 1, 2022, and prior to this was the senior vice president of Well Construction.