Where’s the next pioneer for oil and gas?
The exhibition floor at the Offshore Technology Conference is a reminder that humans have found more than 17 trillion barrels of oil, and built companies with trillions of dollars to recover it.
From the Chinese companies selling rubber washers to the Houston companies selling underwater robots, hundreds of thousands of people are involved in making sure the world gets the oil and natural gas it desires at a reasonable price.
In other words, the oil and gas industry has a lot of staying power.
Walking past the chromed diesel engines and the brightly painted drill bits, I overheard many a depressing conversation.
Folks talking about how debt restructuring consultants are tearing the company apart, or how new owners following a merger are shaking things up.
None of this was the happy talk I heard in 2014 about too much work and too little time to fill orders. This year, the oil field services companies suffer from a buyer’s market, my colleague Colin Eaton reports.
“We have to change the mindset and not accept a cost structure that trends up with the oil price,” BP Upstream Chief Executive Bernard Looney said in a keynote speech for energy professionals at the Offshore Technology Conference.
“If we don’t change, in this low price environment, many projects aren’t going to be viable,” said Mick Kraly, a general manager of facilities engineering at Chevron Corp. “We have to come together and get innovative.”
Senior executives recognize that new competition from OPEC nations and electric cars mean costs must stay low because prices are unlikely to spike again anytime soon.
Looney thinks keeping the invoices low is the key to success. Kraly said the secret is standardization. If deep-water drilling is to make a comeback, the industry needs both.
Offshore drilling is looking for a George Mitchell, the Houston oilman that made hydraulic fracturing work on a large scale and open up a whole new source of petroleum. It needs a Henry Ford, who can simplify the drilling process and industrialize it.
No one of that iconic stature spoke at OTC, but odds are that somewhere on that floor was a young person who could fill that role.
The industry may look worn out at the moment, but anyone who thinks there won’t be another revolution doesn’t know their history.
All of the bright shiny things on display at OTC once existed only in people’s imagination, and there is still plenty of that available.