E&P Plus Company Spotlight: ChampionX CEO Talks R&D, Digitalization, Energy Transition

[Editor's note: A version of this article originally appeared in the January issue of E&P Plus. Subscribe to the digital publication here.]

In June 2020, ChampionX Corp. completed the merger of the businesses of Apergy Corp. and ChampionX Holding Inc., the former upstream energy business of Nalco Champion. Apergy then changed its name to ChampionX Corp. Now ChampionX has a team of nearly 7,000 people globally, and the company offers chemical, artificial lift, drilling and digital technologies for the reservoir, production, midstream and water treatment markets.

“The creation of ChampionX through the merger of Apergy and the Nalco Champion upstream chemicals business has been transformative and a complementary combination in strategic, operational and financial dimensions,” President and CEO Soma Somasundaram told E&P Plus. “Our combination created a global leader in production optimization and an essential player in the oil and gas market with a strong portfolio, global customer base and footprint, and strong financial profile.”

Somasundaram said the company’s strategy moving forward involves five strategic elements: “realizing the synergies we have laid out, accelerating our digital and digitally enabled revenue streams, leveraging our enhanced global footprint to increase our international sales, building our continuous improvement culture, and evolving our portfolio for sustained growth as the world undergoes an energy transition.”

In this exclusive interview with E&P Plus, Somasundaram shares details about how the company battled through 2020, its ESG efforts, digital technologies and current R&D projects.

E&P Plus: How did ChampionX successfully navigate through the chaos of 2020?

Somasundaram: It was a challenging year, but we transformed our company and capability in a hugely positive way.

Our teams adapted quickly to the virtual working environment amidst the global pandemic and worked diligently to complete the planned merger.

With COVID-19, we recognized risks early and quickly implemented protections for our site-essential and field personnel as well as remote-working protocols for others. Our Crisis Management Team managed our safety and health protocols and stepped up communication to employees.

We executed our downturn playbook, taking early action as the market changed. We know that responding quickly to industry cycles is important to protect short-term capability and be ready for the recovery. Like many companies, we focused on managing cash flow and expenses to weather the downturn, while preserving our core capabilities.

Coming together as ChampionX gave us a tremendous advantage, because it helped us take our 130 years of experience in the market and reposition what we do to meet the needs of the industry as it changed dramatically.

E&P Plus: Can you share details about any R&D projects you are working on for the upstream sector?

Somasundaram: One of our operating principles is developing and deploying technology that delivers positive impact. R&D is central to our purpose, and we prove it through the more than 2,500 patents we have as a company.

Our R&D priorities are focused on solving customer problems, improving their productivity and helping them safely produce oil and gas more sustainably. This means developing innovative chemistries, advanced materials and coatings, smart equipment, advanced digital solutions and thoughtful integration of digital and physical assets.

One recent example is the collaboration agreement we announced in November [2020] with Modumetal to introduce our Norris Rod couplings coated with nanolaminate technology to improve equipment reliability and lower customer operating expenses.

We’ve had other recent game-changing advancements, like our Excelceor chemical technology that adds water-soluble polymers to increase viscosity in injection water during the waterflooding process to improve sweep efficiency. We’re now deploying that in onshore and offshore production.

Our innovation philosophy isn’t limited to new molecules or equipment; it’s also about continuously improving our operations to deliver superior outcomes to all our stakeholders. This involves digitizing our critical work processes to eliminate waste and improve customer and employee experiences.

E&P Plus: Big Data, artificial intelligence and digitalization are all current buzzwords. How is your company keeping up with these trends?

Somasundaram: Digitization of the oil field isn’t new, and we’ve demonstrated our digital capability for years. Our digital portfolio brings together modular solutions for production optimization, asset integrity management, process control, downhole monitoring and more in a single secure platform that’s easy to deploy. We combine proprietary physics-based models with artificial intelligence and advanced machine learning models to monitor, analyze, predict and optimize producing wells and assets. The modular nature of our digital solutions helps our customers choose the right solution for them depending on the economic value of their asset and their organization’s digital maturity. Our goal is to deliver at least a fivefold return on our customers’ investments in digital by delivering improved outcomes in safety, productivity and sustainability.

E&P Plus: Another buzzword is sustainability. How are you supporting operators aiming for a net-zero future?

Somasundaram: Our organization’s purpose of improving lives is aligned with ESG and sustainability. We have further elevated our sustainability focus by creating a senior-level role reporting directly to the CEO that leads our ESG efforts. We already have many technologies—including our innovative chemistries, artificial lift and digital technologies—used by customers today that reduce carbon footprint and help them deliver on their sustainability goals. Our Chemical Technologies business is leading in these efforts and has developed example case histories of this around the world. We look forward to sharing more on sustainability as we advance our ESG efforts. We know the energy transition is upon us, and we believe we are well positioned to support the industry with our capability.

E&P Plus: What do you see as the path forward for the oil and gas industry?

Somasundaram: As I think about the future, it’s clear that the energy transition is real and driven by the need to balance prosperity with sustainability. I see the oil and gas industry as part of the solution in the lower-carbon future, requiring us to drive innovations that produce oil and gas safely and sustainably. We need to integrate sustainability as part of our business strategy. In this transition, our industry has an important role to play in developing realistic solutions that use all available resources to produce reliable, affordable and cleaner energy that the world needs. In addition, we must exercise strong financial discipline and pursue goals that benefit all our stakeholders.

E&P Plus: You have held numerous CEO and senior leadership positions at notable service companies in the industry—Apergy, Dover and Baker Hughes to name a few—so what do you think makes a good leader?

Somasundaram: I believe the process of being a good leader starts with being authentic and sincere. People tend to trust people who they feel are genuine in their intentions and efforts. Good leaders always put interests of their organization and teams ahead of their own. From there, I believe the path to being an effective leader involves three elements: commitment, alignment and engagement. It starts with making a personal commitment to the journey of being a better leader, followed by aligning the organization and teams around the purpose and key objectives. Once you align the organization, it is important to actively engage in supporting the teams to make progress and achieve these objectives. Good leaders are always self-aware, consistent in their leadership behaviors and credit their teams for success.

E&P Plus: What would you tell those that are newly appointed in top positions at their companies?

Somasundaram: I would encourage them to define a purpose for their organization beyond just financial goals and that includes all stakeholders. This helps employees feel part of something bigger and contributing to a higher cause. It energizes the organization. I’d also encourage them to focus on developing a positive, inclusive work environment and culture. I believe culture is the only sustainable competitive advantage a company can have, and CEOs play a leadership role in shaping that culture. I believe being a CEO is a privilege, and I must earn that privilege every day.