Logging-while-drilling remote operations (LWD RO) has hit a wall. Since the outbreak of COVID-19, there is an increased demand for personnel with multidisciplinary skill sets to work on offshore rigs. But the demand cannot be satiated. The instant demand in LWD RO is doing just what oil companies have tried to avoid: putting the operations of multimillion-dollar rigs at risk.
Right now, oil companies cannot adopt LWD RO fast enough. That has never been the case before. Almost 12 years ago, LWD RO operations were pioneered by several oil operators such as Shell and Chevron, partnered with leading service companies such as Schlumberger, Halliburton, and Baker Hughes.
Before COVID-19, the majority of deepwater oil companies operating in US Gulf of Mexico were reluctant to adopt LWD RO. From my experience, only about 35% of deepwater LWD operations were RO. Overnight, the industry wants it to go to 100%.
It is depicted in the book, Crossing the Chasm, Marketing and Selling Disruptive Products to Mainstream Customers by Geoffrey A. Moore.
Pre-COVID-19, LWD RO technology lifecycle adoption was a textbook model according to five market adoption segments: innovators, early adopters, early majority, late majority, and laggards. Crossing the chasm, which is the tipping point of wider market acceptance, occurs when the early adopters of a product, service, or idea champion wider market acceptance, driving rapid growth (Fig. 1).
technology-adoption curve.
The innovators and early adopters are accepting and even excited about new technology. The late majority and laggards are most skeptical.
But sudden market changes can shift the entire curve. That is what COVID-19 has done to the LWD RO adoption curve (Fig. 2).
technology-adoption curve.
Meeting that hockey-stick demand curve for adoption has been disruptive because of a personnel shortage. It has been next to impossible to find enough qualified people to man the LWD RO technology.
Oddly enough, the personnel shortage was driven by hiring. Driving this phenomenon has been oil industry micromanagement of the hiring of personnel manning the rig. Oil companies painstakingly intervened to evaluate and approve each LWD engineer/specialist assigned to a key position on the offshore installation. With almost every hire being highly specialized, few have the breadth to solve the plethora of issues that can confront petroleum professionals on a rig. To put it in baseball terms, there were no utility infielders (or jacks of all trades) on the rig.
The oil companies’ heavy-handed approach is understandable. As noted, most believed that the financial risks were too high to consider an LWD RO model where they relinquished control over personnel operating a multimillion-dollar drilling operation.
The over-hiring is a potential threat. It portends to be a scenario where rigs could act as a petri dish incubating the spread of the novel coronavirus. The industry is now scrambling to convert large teams comprised of narrow specialists into smaller teams of oil rig experts with broad based capabilities.
However, finding broad based, “utility infielder” experts is like finding a needle in a haystack. There are two contributing factors: a decline in students pursuing careers in petroleum engineering and decreased training of skilled petroleum workers.
Student Decline
In 2019, the US petroleum engineer student enrollment decreased to 4,500, a 60% drop compared with 2016. Driving this trend is that young people are concerned about climate change and view the oil industry as unsustainable.
Also contributing to the enrollment decline is oil-price volatility. A study (Fig. 3) shows that petroleum-engineering student enrollment tracks to a 2-year lag with oil price fluctuations.
Exacerbating the problem is the oil price crash of March 2020 caused by COVID-19 and a price war between Saudi Arabia and Russia. It will likely trigger a further drop in students who enroll in a petroleum curriculum by 2022.
Decreased Training
Restructured training programs catalyzed by economic downturns of 2008 and 2015 have left the industry with a pipeline of current workers who do not meet post COVID-19 needs for LWD RO.
Actions taken by oil and gas companies have included closing of training centers in the US and abroad, as well as trainings that are shortened in duration, scope, and depth. For example, training seminars that had 1- to 2-month curriculums teaching three to five LWD competencies have been whittled down to one competency at a time over 1 to 2 weeks.
Before COVID-19, classes over the Internet and videoconferencing had been increased. While this did excise cost, it also comes at a cost. It strips away practical hands-on training taught in laboratories and at crane bays by certified instructors. Distance learning in this instance created distance between students and teachers that is ill advised. It eliminates valuable one-on-one discussions between students and teachers. As we know, working on an oil rig comes with complexities and dangers. This lack of hands-on experience is akin to teaching a person to pilot an airplane without ever leaving the ground. The result has been a new generation of LWD field engineers lacking hands-on competency in a broad array of services.
It all adds up to LWD RO hitting a wall.
Crossing the Chasm Creates the Need for a Bridge to the Rig of the Future and Jobs of the Future
To break the barrier, our industry has been on a path to develop the rig of the future. The rig of the future is a vision of the oil and gas industry aiming for autonomous rig operation with minimal human intervention while maximizing drilling efficiency by integrating rig systems, automation, robotics, and artificial intelligence. And, to manage our industry for this future, we need to accelerate training and development of qualified people for LWD RO.
To meet the human-resource demand, it is recommended that the industry engage in four key initiatives.
- Immediately use our expert-knowledgeable people to manage the remote operation center on land.
- Have the experts shadowed by capable junior people to learn how to manage remote operations.
- Identify personnel on the rig (as opposed to being at the remote operation center) with the greatest learning agility who are candidates to shadow experts.
- Develop the new knowledge workers to fill the new jobs created by the rig of the future.
In essence, our industry must lead and drive education of incredible people who can bridge us to the rig of the future, rigs that pull real-time data and learning.
Having more skilled personnel at the remote center can drive technology forward. Right now, it takes human skill and knowhow to anticipate the uncontrolled flow of fluid formations inside the borehole to avoid the catastrophe of a blowout.
The rig of the future can anticipate problems in real time. It eventually will require fewer people in the operating center and on the rig, enabling the drilling industry to expand and adapt more rapidly.
Fewer people working in a contained space in the era of COVID-19 also can mean a safer working environment.
In fact, right now, with intense cost pressures, we need more knowledge in our industry to lower exploration and development costs per barrel. It is the best way to combat the recently reported loss of jobs in our industry.
Training new people for new technologies such as the rig of the future, will create a smarter, more-adaptable workforce.
Our ultimate goal is to improve the efficiency and safety of drilling operations. We want rigs to be producing oil as quickly as possible and simply be unmanned and monitored remotely by the next generation of experts. And, we want those experts to be able to apply their skills to oil and gas—and other industries.
Oil and gas is at a pivotal moment. There is extreme cost pressure on the industry based on competition and exacerbated by COVID-19. We are also at a point where technology can push the industry forward to meet the cost demands. It requires new skilled workers who can apply their knowhow in oil and gas and all energy.
As we train people for the rig of the future and other oil and gas technologies, our skilled workers have transferrable skills using data science and analytics for other business applications. Advanced skills can include roles in artificial intelligence.
The silver lining of COVID-19 is that it is forcing our industry to thrust forward. While we have hit a wall, we have a path to break through to our next phase of productivity.
