As far as fairy tales go, the one about Goldilocks and her fussiness over the temperature of her porridge in the bears’ house is well known.

She demonstrates her fussy nature after taking a mouthful of breakfast by declaring the first two options on the table as simply “too hot” and “too cold” (with little thought for modern hygiene, it must be said), and she then of course decides that the baby bear’s porridge is “just right.”

It’s a tenuous analogy, but it was interesting to hear the CTO of a major U.S. and international operator use the same phrase to describe his company’s approach to the pace of the development and application of new technology.

Ram Shenoy, CTO at ConocoPhillips since early 2012, was talking at a recent event put on by Schlumberger Information Solutions about how the operator had been expanding its capabilities in deepwater and oil sands and today how it also has a strategy to become a leader in unconventionals.

The use of technology to give it its position in the U.S. unconventionals business has and is playing a key role. With strong positions in the liquids-rich Eagle Ford and Bakken, the company is looking to expand its production from a 2013 figure of about 170,000 bbl/d to 370,000 bbl/d in 2017.

“We have a pipeline of unconventional assets at varying stages of maturity. But the pace of development cannot be too fast or too slow. It has to be just right,” Shenoy said. Other operators in the past felt the need to perhaps run faster, but in the case of ConocoPhillips, he said, “We find if we take the time, we can maximize the returns.”

The company is this year investing about $3 billion in the Eagle Ford Shale alone ($1 billion more than last year), no doubt helped by the fact that Shenoy admitted the company originally thought it would produce about 160,000 bbl/d in 2014. “It’s going to be nearer to 250,000 bbl/d,” he confided. That’s quite a ramp-up in production.

Maximizing returns largely means better drilling efficiency in basins like the Eagle Ford and Bakken, and Shenoy outlined how the company has reduced its drilling days by an impressive average of 40% while also reducing its completion costs per unit of proppant by the same amount.

It also has installed an integrated operation center that gathers key operating data in real time using a fieldwide wireless Internet system. This, said Shenoy, has enabled it to reduce the number of shut-ins “dramatically” despite the number of actual wells rising.

Being able to pace yourself well has always been a good discipline. When the benefits of doing so, as in this case, are so clearly beneficial to a company both operationally and commercially, it demonstrates that likely similar improvements by the industry as a whole will be no fairy tale.

Comments