Mario Ruscev is executive vice president, president of global product lines, and chief technology officer for Weatherford. He is responsible for leading the company’s operational team and strengthening the company’s integrated product line strategy. He was a speaker at the opening general session of the 2017 Weatherford Enterprise Software Conference. He spoke to JPT on the sidelines of the conference.
From your perspective, what is the state of the digitization of the oil and gas industry?
I think we are at the beginning of a new era. In some ways, we have been digitized for a long time. Ten or 15 years ago, the world’s biggest computer usage outside of the defense arena was in seismic. But this is a new era where many of the dreams we are pursuing are being made attainable because of the increased capabilities and lower cost of huge computing power.
What is the impetus for this new era?
There is new technology that makes it very easy to gather and transport information in a safe way. We call it IoT. The technology is here and now we have to bring it to the field. The next step is looking at the huge amount of computing power, which allows us to use empirical tools that people call analytics. Analytics is really an empirical approach to data. Many of the algorithms are not new but were not really used before. Now you have a lot of data and you also have the ability to find relationships, distances, and groupings. And, depending on how you want to do that, you can usually get knowledge out of this data.
In terms of digitization, what is the industry doing best?
We are just starting to scratch the surface. Now digitization is in fashion and everybody says they can do it, but the ForeSite software platform that we just launched is one of the very first applications that really uses analytics.
What are the industry’s biggest needs in this area?
After the 2014 oil price bubble burst, we entered a world where we all have to become more efficient and profitable. With oil staying at around USD 50/bbl, we need to bring a totally new level of efficiency to our business. If you look at production optimization, you can now take the whole field and not only optimize its maintenance but also optimize the drainage of the reservoir, improving the percentage of recovery. This will have a huge impact on reserves.
Do you anticipate that a USD 50/bbl oil price is the new normal?
That is my opinion, but many fools have been made predicting oil prices. We are sitting on a very large amount of hydrocarbons that we can put on line in 6 months. The full-cycle lifting costs of these hydrocarbons will be, for a while, the limit of the oil price because each time we go above this line, at least in America, the industry will pump like mad, leading to slight overproduction and bringing the price back down. So I do not think we will have huge swings in production, but these smaller swings will probably keep a lid on the price of oil at least for a while. However, if the industry dramatically underinvests, there could be eventually be a shortage and oil prices will respond.
How are companies outside the traditional oil and gas industry getting involved in digitization?
The analytics revolution cannot happen if you don’t have the right knowledge and expertise. Having worked in Silicon Valley in technology, I can tell you that there are people who have been very successful and believe they know it all. But to use analytics techniques, you also need to know what question you need to answer. There is no magic. We have to bring in the right knowledge to work with us. I believe the industry will be very successful with this technology if we take those steps.
A common complaint is that the industry is gathering more and more data but is not using it or using it correctly.
The empirical approach of analytics allows you to make sense of a huge amount of data, so this is really opening up a totally new world. People estimate that the industry uses only 10 to 20% of the data it collects. We can raise that percentage much higher. And when we do that, people will see the value and want even more data, and we will discover new ways of using it.
What is the state of the “digital oil field”?
I think it has been asleep for quite a while for two reasons. One, it is very expensive and, second, once you get the data it is difficult to use. I have not met one operator that has told me that they changed their decision process because they have a big digital oil field with data rooms. They may have become a little more efficient, but I have never met anyone that said I have drastically changed the way I operate. Maybe we can eventually get to that point.
What is the potential of artificial intelligence?
First we need to define intelligence. Analytics will allow you to make sense of a lot of data and make better decisions. Let’s first do this.
