URTeC: Operators, innovators discuss new processes for technology adoption

By Kurt Abraham, Editor-in-Chief on 7/22/2020

Some of the high-impact technologies in 2019 no longer have the same economic punch in today’s Covid-19-battered market. At the same time, say some operators and innovators, some of the overlooked or low-impact technologies now are extremely useful, even transformative. This was at the heart of a discussion among five panelists at an afternoon session of the virtual URTeC on Monday afternoon.

As the session began, it was mentioned that some of the smart operations that were used for monitoring geosteering, and also completions, can be used to plan the completions of wells in the future. In addition, with the new price environment, it was remarked that technologies that can result in cost reductions and well performance improvements have become more important than ever, particularly when they are coupled with geological and geochemical data that result in a significant positive impact.

But as positive impact was discussed, it was also recognized that operators and service partners must also take a look at the potential negative impacts. It is, the panel noted, just as important to identify the techniques, workflows, and technologies that worked in the past, that may have disastrous outcomes now.

Aaron Lazarus, chief scientist in emerging technologies at Pioneer Natural Resources, noted that in terms of shepherding and adopting new technologies, “One organization can’t do everything. We can’t do every type of field trial. You can’t cover basic research to field commercialization.” Accordingly, The emerging technology team at Pioneer is heavily focused on a specific mission, which is working with technology Tier Levels between 5 and 7, where technologies have a working, basic prototype, and developers are focused on demonstrating the economic viability of that prototype in getting it to a Tier Level 7 status.

“We think this is particularly valuable,” said Lazarus. “We’re very focused on Tier Levels 5 through 7. Because once you’re at a Level 7, you can begin selling your services and product.  And you’re able to get a lot of interest from venture funds. But whether it’s able to qualify for Tier Level 5, if it’s something that can’t be put in the field safely, we’re not ready for it.”

Lazarus added that it’s [also] important to understand that commercializing technology is just as hard as developing it. “All too often, people that come up with great ideas think that’s the hard part. But, there’s just as much work in commercializing it. It’s really important for everybody to realize that there’s partners in every stage of the process—do not undervalue their contributions.  Do not undervalue the process of taking a product from an early stage and taking it all the way to a point where somebody can buy it. The key to this is partner, partner, partner. We work with venture funds and other partners.”

The two places right now, said Lazarus, where a company can have an impact are ESG—"which is a really important issue right now”—and also external R&D. “While oil companies are capital intensive, the amount of money spent on R&D is miniscule to the amount spent as a whole. So, a lot of R&D is going to come external of oil and gas.”

Amy Henry, CEO/Co-founder of Eunike Ventures, a hybrid accelerator firm that seeks high value-add technologies, managed by driven entrepreneurs, says the company was formed from all technical disciplines.  “We saw a lot of start-ups in Houston, but everyone was getting ready to do pitches,” observed Henry.  “The real problem was we needed to get start-ups with promising technologies paired up with actual customers. Their focus needed to be getting them out to their customers.”

Accordingly, continued Henry, “Our model is based on open innovation, and we also work outside of our model. We start with our partners each year……and see where we can work collaboratively. We go, and we do open calls internationally—we work with the trade organizations from Canada, Israel, France, Norway. So, we scan and vet them—does it fit your needs, does it move the needle? From there, said Henry, they do a full-scale due diligence. “If they say they’re ready, we get started on working and developing the pilot.”

The Eunike Ventures head said that her firm doesn’t take IP from these technology companies. “And we’re always trying to look at different ways to proceed without doing an 80-page MSA. For the startups, they’re putting all their sweat equity into this. Sometimes, we can get multiple operators to test and look at different facets of that technology.…and then, is it scalable, or is it just a one-point solution?  So, we spend a lot of time in developing the business case.

Panelist Mouin Almasoodi, a senior staff reservoir engineer in Subsurface Technology at Devon Energy, said he thinks there are three key advancements that the industry has seen in the last one to two years. “The first one is significant improvement in subsurface and reservoir data,” said Almasoodi. “We’ve collected a lot of data, and not all has been analyzed.” The second advancement, he said, is “hydraulic fracture diagnostics and monitoring. We’ve seen a lot of advancement in this space, and I would say innovation in that space.”

The third key advancement, continued Almasoodi, is the “field experimentation side—more specifically, the design of experiments has improved. You see that in the hydraulic fracturing test side of DOE (NETL). These are the main areas that we’ve seen improvement.” 

In yet another operator perspective, Mike Party, a specialist in emerging technologies at Hess Corporation, said, “we’re really proud of what we call our lean and innovative culture. In more familiar terms, this is a mantra we have adopted that we call creativity with discipline, and discipline with creativity. We really want to recognize that innovation can come from anywhere, and it doesn’t have to be the adoption of a new technology.”

In turn, said Party, Hess wants to couple that mantra with a disciplined process, focus and execution. “Innovation vs. emerging technologyinnovation can come from anywhere, but emerging technology is something different. What is really at the edge of possibility right now? This also means that disciplined innovation requires teamwork.”

Party gave an interesting example of how teamwork really does mean having every project partner on the same page. “When I was working as a field drilling engineer, one day, we were walking the rig, getting ready for the next well. And this truck driver shows up on location with a tool, and none of us had heard about it or seen it before, and he’s got his ticket there, that says it’s for our rig, and we know nothing about it. So, we call around to a few rigs, talk to the superintendent, try to figure it out, and nobody knows anything.  So, we send him back to town. About an hour later, we get a call from an engineer, asking why we’re sending his tool back to their yard.”

Going back to the technology adoption process, Party said that companies don’t need to bog down their processes with too much bureaucracy or group think or a kind of culture of consensus. “We want to minimize as much bureaucracy and group think as possible, but we want to be sure that we involve all the right key stakeholders, which includes your people in the field.” Lastly, said Party, “what we’ve learned in these troubling times, we need to stick to the plan and deliver results. You want to deliver results but not hold yourself to closely to value-based metrics and ROIs.”   

Bringing another technology development viewpoint, David Wishnow of Darcy Partners explained how his firm’s basic process works. “We always start with the problem statement, from the business, as opposed to saying, hey, here’s a new technology, what is the problem you’re trying to solve? [For example,] are your operations not as efficient as they possibly could be?  Once you have a good sense of what the actual issue is, both stated and contextual, then from there, (consider) the innovation, and then the business model is to consider.”

Wishnow said that he has seen a few different technologies get a tremendous amount of traction and press for disrupting some of the inefficiencies in contracting and other things like that over the years. “So, innovation really can come from anywhere,” he observed. “When we look at the technologies that have gained the most traction, it’s those that have a very clear application to existing pin-points in the operator base. We’ve recently seen a big uptick in interest around ESG-related (environmental, social, governmental) technologies and deploying them.” He said that the actual economics of these technologies haven’t changed—the dollars and cents are the same.  “What’s changed is the allocation of value assigned to reducing emissions, reducing the number of people onsite,” concluded Wishnow.  

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