PESGB May 2017
- Disrupt or be Disrupted, Nick Terrell, PESGB President 2017
- Australia E&P Production Growth Despite Market Downturn
- 21st Century Exploration Roadmap Palaezoic Project released for underexplored petroleum systems
Plus much more inside
Disrupt or be disrupted!
There’s no disputing the fundamental role innovation has played in the oil and gas industry. Technological innovation has had a profound effect on all aspects of our industry. Huge steps in the past few decades have transformed our industry. For example, the exponential growth in computer processing power has led to transformational advances in 3D seismology. Horizontal drilling and the up-scaling of fracking techniques for shales and tight reservoirs are other examples of technology-based transformation. Of course I am preaching to the converted here…
However, it seems that we have lost our way somewhat in recent years. Board and management level risk aversion, especially in the deployment of new technologies, has crept in and has acted as a major brake on innovation. It is exactly these new technologies that play such a vital role in improving asset and portfolio profitability, which in turn attracts future capital.
The 2014 oil price crash has been a wake-up call. The game has changed and we now have to think differently about how we build and run our businesses. Technological innovation plays a key role in this and will allow us to operate sustainably in this modest oil price environment.
There are many areas of technological innovation that we can discuss here – nanotechnology, automation and robotics are obvious ones. One area that presents significant potential opportunities for us as explorers and subsurface professionals is digital technology, specifically the awesome combination of machine learning, artificial intelligence and cloud computing. As we all know there has been a 21st century tech revolution which has expanded at phenomenal speed, disrupting business models and enabling innovation to occur on a massive scale across entire industry sectors. Up until recently the oil patch has been somewhat insulated from this due to the economic cushion of a high oil price and the previously mentioned institutional risk aversion.
This is now starting to change though. Economic drivers to cut costs and improve efficiencies are big forces in our industry today and therefore this generates a business case for significant deployment of digital technologies. Our demographic has been changing too. Tech savvy millennials now represent over 30% of our membership. It is predominantly they whom the rest of us should empower and support to drive this innovation and technology deployment.
Of course we’ve been playing around with this kind of stuff for a while (Neural Networks etc.). However what has changed now is that we have much more accessible computing power and data storage through the cloud. The cloud has started to democratise computing power and data storage. This allows many more of us to put our smart minds to work on finding new and better ways of exploring for oil and gas.
The naysayers and dream killers will point to issues such as data confidentiality and cyber-security. But these are not unique to the oil industry and represent common 21st Century business risks. We must overcome these issues. I would go as far as to say that going digital may be one of the only ways that oil and gas companies can stay competitive and attract capital in the future. Disrupt or be disrupted!
Now on to Society matters. The PESGB prides itself on offering excellent value for our members. When I tell people that the fees are currently £45, they say “what, per month, that’s a bit steep” and then I say “no it’s £45 per year” they cannot believe it. Unfortunately we are as affected as everyone else by the current downturn and can no longer sustain the organisation on the current fee structure that has remained unchanged for the last 3 years. From the 1st of July 2017 we are putting a new fee structure in place (see page 42 for details). Hopefully you will agree that this increase is modest in monetary terms and that the PESGB still delivers huge value for money to us all.
Returning to the digital theme, I hope you have had a chance to test out our new PESGB website. It’s been long awaited but I’m confident that this piece of PESGB digital innovation will improve our offering to you as members. We will continue to develop the website by adding in additional functionality. Please get in touch if you have ideas and feedback. This site is for you so don’t hold back with ideas on how we can make it even better!