Market Insight

Technology companies focus on smarter, leaner solutions at OTC 2019

June 14, 2019

Kevin Schiller Kevin Schiller Senior Analyst, Manufacturing Technology

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The 50th anniversary of the Offshore Technology Conference (OTC) enjoyed a more enthusiastic attendance this year, as the industry-wide uneasiness of recent times gave way to optimistic outlooks for industry growth opportunities.

The conference, held in Houston in May, reportedly hosted over 2,300 exhibitors and 59,000 attendees. Services companies and industry experts addressed new strategies for exploration and production, while promoting their expertise across a wide variety of applications. Technology companies in attendance addressed similar trends through their new product portfolios, which focused on digitalization and data analytics to assist oil and gas companies in achieving their objectives quickly and efficiently.

The state of digitalization within the oil and gas industry still lags behind other sectors; harsh environments, equipment/maintenance complexity and customized applications have hindered a fast transition. However, since the 2014-2016 decline in oil prices, operational efficiency has become a larger priority among oil services companies, inspiring machinery suppliers to create purpose-built products that capitalize on the benefits of digitalization, which they showcased at OTC. One example is the DuraStim pump, promoted by AFGlobal as the industry’s first variable displacement hydraulic fracturing pump powered by electric motors. Other products have been developed to operate in extreme environments, such as Siemens’ subsea power grid, which places switchgear, variable speed drives and remote monitoring on the ocean floor.

The increased focus on operational efficiency is due to the large amount of scrutiny of production breakeven costs. Technology companies have sought to address these concerns through wider use of software, sensors and industrial internet of things (IIoT) capabilities. As with other industry sectors, the implementation of these features enables end-users to collect and analyze data from motors and motor-driven equipment. This facilitates operators’ fine-tuning of equipment to increase efficiencies and discover trends within processes not previously evident pre-digitalization. In addition, suppliers have noted increased demand for quality equipment, as opposed to purchasing low-cost motors and end-equipment with more frequent retrofits and inherent inefficiencies.

Moreover, machine imaging and robotics have further augmented the range of oil and gas applications in which technology can be implemented, such as wellhead inspection, automated pipelay and routine maintenance. Primarily, these serve to reduce the personnel requirements for deploying, operating and maintaining machinery used for these purposes.

While safety features are promoted at many industry-focused trade shows, these were highlighted even more so at OTC, indicative of the particularly critical environments common within oil and gas applications. Eaton promoted its Arc Suppression technology, which combines improvements in safety with a reduced impact on machinery and downtime.

When discussing suppliers’ priorities regarding their own operations, global trade and its impact on supply chains was frequently brought up as a concern. Opinions on the market effect of new tariffs between the United States and China (and potentially additional future tariffs) ranged from “significantly disruptive” to “slightly negative” impacts; none had upbeat sentiments regarding their impact on equipment sales or the overall oil and gas industry.

Other supply priorities focus on ways to improve the success of implementing IIoT features in the oil and gas sector. According to the latest IHS Markit IIoT Readiness survey, the oil and gas industry leads other sectors in the number of IIoT proof-of-concept analyses and project deployments, but either do not see value from the projects or have not realized significant payback after implementation. Considering the wide range of equipment and applications that could be addressed by digital solutions, suppliers will need to continue creating specialized solutions to better address the unique needs of oil and gas customers to achieve improved product conversion rates.

 

Research by Market
Manufacturing Technology
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