Drilling automation advances now appearing on rigs would seem to offer a great opportunity for service companies to demand a raise. The likely answer from oil companies, though, remains no. The argument that oil companies need to pay for much needed technology advances collides with a brutal North American onshore rig market where shrinking demand keeps a lid on fees, according to drilling and service company experts on a panel at the recent SPE Annual Technical Conference and Exhibition. The cost-cutting pressure has been on since the oil price crash that started in 2014. In this survival-of-the-fittest market, high-efficiency, modern rigs have won out. While the number of rigs working in the Permian Basin is down 20%, the number of wells and feet drilled is little changed. As a result, the bottom line for drilling contractors has suffered because the survivors are reducing the number of days of pay per well. Drilling rigs with digital control systems that can consistently drill a curve faster, and smoother than a directional driller can, are an example of digitally controlled systems appearing on rigs. New contract terms rewarding service companies for delivering those efficiency gains are not part of that advance. “There is so much focus on supply chain savings,” said Duane Cuku, vice president of sales for Precision Drilling. As a result, “The operator is really accustomed to flying first class on a coach ticket.” Drillers would like to break this down-ward spiral by negotiating better terms for the next leap in drilling technology—programmable digital control systems capable of consistently executing complex programs to efficiently increase the penetration rate, change the well path, or run casing. Rather than a hardware advance, like the top drive, the combination of digital controls and data analysis provides flexible, programmable tools that allow improving performance over time. Making the most of these tools requires cooperative efforts by operators, drillers, and service companies. “Digital technologies are progressing and we are at the cusp of a tipping point. Automation and digitization will allow the future of well construction,” said Kevin Neveu, president and chief executive officer for Precision Drilling. Digital tools tested onshore will eventually migrate offshore. Matt Isbell, drilling optimization advisor for Hess, said the company expects to use what it is learning about drilling better holes onshore to help it improve its performance when drilling with the more complex well designs used offshore. Measures of Success The panelists said that increasing automation is becoming the norm on rigs, but the conversation kept coming back to being paid for new technology. “I am here to talk about money, not technology,” said Lars Olesen, vice president for product management at Pason Systems. The company made a name for itself selling data storage, but now customers in this competitive sector expect them to “do more with my data.”