Financial Energy Review
The oilfield has historically been a place where brawny men, and mighty machines came together to bore holes deeply into the earth to wrest stores of oil and gas from the depths. This model, which developed over many decades of exploration and production activity carried huge costs, particularly as the focus of this activity moved into more and more inaccessible regions. The current oil crash and resultant industry consolidation, began in 2014, and continues to this day. Downturns are nothing new to this industry. The difference this time is the longevity and severity of this downturn has kept any real recovery from taking place in the broader industry. Companies have been forced into retrenchment after retrenchment in both the operating and service industry.
Miller pointed out in the call that the cuts are permanent reductions in employee count and facilities infrastructure.
“Halliburton is charting a fundamentally different course. The growth in digital technologies, the position of strength in the returns for our shareholders. We believe that the strategic actions we are taking today will further boost our earnings power and free cash flow generation ability as we power into and win the eventual recovery.”
Technology seems to gravitate to the oilfield. Doing more with less has always been in the background as the industry responded to ever increasing markets with large explosions of capex. Those days are gone as we have noted, and increasingly what would have been big capex solutions are moving to smarter, more flexible components that deliver value while packing in profits to the supplier. You will also see more joint ventures with participants each bring key attributes to increasingly digital solutions.
Here are some examples noted in the Halliburton, second quarter conference call-
Halliburton and TechnipFMC introduced Odassea™, the world’s first distributed acoustic sensing solution for subsea wells. The technology platform enables operators to execute intervention-less seismic imaging and reservoir diagnostics to reduce total cost of ownership while improving reservoir knowledge. Halliburton provides the fiber optic sensing technology, completions and analysis for reservoir diagnostics. TechnipFMC provides the optical connectivity from the topside to the completions. The Odassea platform strengthens digital capabilities in subsea reservoir monitoring and production optimization.
“Interventionless” is the key term I’ve bolded in the above statement. Interventions are expensive shutdowns of producing wells that often require a rig-a big expensive piece of machinery. They can be done rigless, but that’s an outlier. In this case the company is describing smart equipment that will remotely engineered solutions can fix itself.
Halliburton, and Microsoft announced a five-year strategic agreement to advance Halliburton’s digital capabilities in Microsoft Azure. Under the agreement, Halliburton will complete the move to cloud-based digital platforms and strengthen our customer offerings by enhancing real-time platforms for expanded remote operations; improving analytics capability utilizing machine learning and artificial intelligence; and accelerating the deployment of new technology and applications for overall system reliability and security.
How will this work?
Researchers and engineers from both companies will leverage and optimize Microsoft technologies in machine learning, augmented reality (AR), user interactions and Industrial Internet of Things, as well as Azure’s high-performant infrastructure and built-in computing capabilities to deliver tightly integrated solutions across the energy value chain.
