OTC Focuses on Downturn-Led Innovation and the Bottom Line

Abstract

Conference review Technical papers and panel presentations at this year’s Offshore Technology Conference (OTC) reflected the times, with a clear focus on doing things more efficiently and cheaply and how innovation and incremental improvements in technology can help. The annual conference, held in early May in Houston, attracted just under 65,000 attendees from more than 100 countries. Below are highlights from this year’s conference. More extensive coverage can be found at www.spe.org/jpt. Thinking Like Shale One of the most important questions asked at this year’s conference was how deepwater projects can compete with shale developments. The answer, according to at least one executive, is for the deepwater sector to become more like the shale business. Roger Jenkins, chief executive officer (CEO) of independent producer Murphy Oil, said it is not necessarily about technology transfer. “It’s an attitude around needing to have continuous improvement, and that is what onshore has brought to the table,” he explained. “Every day, you have to improve and go faster.” Jenkins stressed that more synergies are needed between these two arenas, not so much to benefit shale production, but to protect the investment viability of deep water, which he said needs higher margins of returns than shale due to the risk factor. Murphy Oil is one of the few US independents that maintains a balanced port-folio of shale fields in North America and deepwater operations offshore southeast Asia and in the US Gulf of Mexico. Jenkins said the company’s hybrid model has helped the “unconventional mindset” migrate into its deep water operations. However, he pointed out a number of areas where this attitude has yet to take form. The list of shale sector attributes that need to cross over included: shorter production cycle times, a trend of lowering costs, greater field efficiencies, and the use of commonly available types of equipment. There has been one critical area where both the unconventional and offshore sector have recently become similar: drilling times. Jenkins shared that benchmark offshore drilling times have improved from 8 days per 1,000 ft drilled a few years ago to just over 4 days per 1,000 ft today. “The percent of improvement that is taking place onshore, is taking place offshore as well,” he said.