Well, we’ve all done it. In response to the worst downturn in recent history, our industry has delivered unprecedented cost cutting. Collectively, we’ve reduced our workforce, made changes to employee benefit programs, closed and consolidated facilities, rationalized our footprint in markets that were no longer profitable, and requested significant discounts from our suppliers to help us weather the storm. And in the aftermath of all that carnage, we are awaking to the fact that our recovery plans fell short of, well, recovery.

Yes, the prospects of a market recovery seem to be a bit brighter today. So now what? Are we poised to do something different? Let’s put our ears to the wall and listen to the industry chatter in earnings calls and investment conferences to see how things are changing:

  • Operators have substantially lowered well construction costs, but the truth is that the vast majority of that improvement came from service price deflation based on oversupply and lack of demand; and
  • Listen to the service sector chatter. These days “recovering price” is a strong discussion in any Q&A session.

These are not the sounds of change. We’ve all seen this movie, and we know better.

Every one of us knows the field development and well construction processes are riddled with nonproductive time (NPT). And while we are making steady progress with standardization and lean programs, today’s challenge calls for more than continuous improvement. We must reexamine the whole spectrum of complexity and look to innovation and radical collaboration to advance the business model.

Operators must reconsider what’s possible and achievable by being open to and embracing breakthrough service sector offerings that deliver radical efficiencies. For example, Baker Hughes is making significant investments to develop:

  1. Tools that can think, substantially reducing our dependency on human intervention at the well site;
  2. Tools that can act, replacing human interaction with automation that reacts in real time to downhole conditions without the need for human intervention; and
  3. Tools that can heal, leveraging self-diagnostics and real-time sensor capability to assess operating conditions and tool conditions to adjust key operating parameters on the fly to avoid NPT.

These capabilities are game-changing and will radically improve NPT and well construction costs, but to realize their full potential, they must leverage Big Data.

Leveraging Big Data is integrating and maximizing the value of the massive universe of available data, connecting all the sources of intelligence, and automating these capabilities. This requires tools that can think, act and heal, but it also requires radical collaboration. For example, operators, rig companies and the service sector all have pieces of discrete information, the vast majority of which are underutilized. Simply connecting the dots of this information will enhance planning, decision-making and execution and will more rapidly move the industry toward the automated and digital oil field. Today we have the analytical horsepower to leverage Big Data; what we lack is radical collaboration.

Technology is and always will be the great enabler in this industry. We’ve made significant progress, but there is so much more to do. New materials, design and manufacturing capabilities are enabling design engineers to imagine and create new products that will be printed straight from their laptops. Advances in sensors and networking are embedding intelligence into every piece of hardware, changing the way tools interact with the physical world and the role of humans in the well construction and production processes. Big Data analytics are illuminating possibilities we couldn’t even imagine yesterday, but we are only scratching the surface on what’s possible.

That’s the sound of change that will deliver radical efficiencies, but it will take radical collaboration to achieve it. And that’s what our industry is calling for: radical efficiencies. Let’s work together on that.

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