OTC: SLB Exec Says Goal is to Expand Production, Lower Emissions

Despite rapidly expanding global renewables capacity, oil and gas products will still supply around half of global energy demand by 2040, an SLB executive said during the 2024 Offshore Technology Conference.

Chris

Mathews

Hart Energy

Mon, 05/06/2024 - 02:23 PM

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OTC SLB Exec Says Goal to Expand Production, Lower Emissions

The energy industry of the future needs to lower emissions and lower costs—but will also need to continue pumping oil and gas, SLB management says.

Despite rapidly expanding global renewables capacity, the company still sees about 50% of total energy demand being filled by oil and gas products by 2040, said Abdellah Merad, SLB’s executive vice president of core services and equipment, at the 2024 Offshore Technology Conference (OTC).

“In terms of overall quantities, I think it’s going to be higher than what we’re producing today,” Merad said during a panel entitled, “SLB's Vision of the Future Offshore Energy Market.”

The challenge, he said, is expanding global oil and gas production in ways that lower carbon and methane emissions.

SLB is well-positioned to play in parts of the energy transition where the services giant can pull from its core expertise, like carbon capture and geothermal energy, Merad said.

In March, SLB announced acquiring a majority stake in Norway-based Aker Carbon Capture for about $380 million to expand carbon capture offerings.

The company is also working to decarbonize and abate methane emissions from services processes, such as eliminating routine flaring.

Other parts of the offshore drilling process can be electrified. SLB is working with Brazilian state oil company Petrobras to electrify critical components in developing the offshore Buzios Wave II oil field.

Petrobras aims to progress toward full production system electrification in the future.

Tech talk

In addition to lowering emissions, SLB also aims to drive better efficiency in the drilling and completion process—and lower costs along the way.

Technology and digitalization are areas in which SLB executives see the potential to squeeze out lower costs.

“Our industry, we’re still maybe slightly laggard when it comes to the adoption of digital,” Merad said.

But the technology-cautious energy industry is beginning to adopt sector-shaking offerings, including AI and process automation.

Forget self-driving cars. How about self-drilling wells?

“The vision of autonomous drilling is now a reality,” he said.

In January, SLB announced a medley of digital tools to fully automate drilling a 2.6-km section at Equinor’s Brazilian Peregrino C platform.

“We believe that we will be actually autonomously drilling even before we can autonomous drive,” Merad said.

Automated drilling has been shown to drive more consistent results than manual processes, he said—almost every well is better than the previous well because the system keeps learning and improving.

Automated processes have been shown to improve worker safety —since employees are physically separated from drilling operations — and worker reliability at SLB.

And, perhaps most importantly, automating drilling processes lower customer costs, Merad said.

SLB is seeing upside from international and offshore growth, the company said in first-quarter earnings last month.

International revenues grew 18% year-over-year, offsetting a 6% sales decline in North America, SLB CEO Olivier Le Peuch said in an earnings release.

This spring, SLB inked a nearly $8 billion deal to acquire services company ChampionX, substantially boosting its offerings in production chemicals and artificial lift.

SLB sees opportunities to deliver ChampionX’s products and services across SLB’s larger global footprint, Le Peuch said in an earnings call.

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Chris Mathews

Chris is the Senior Reporter of Shale and A&D at Hart Energy. He covers the North American upstream shale energy industry and the acquisition and divestiture deal markets.

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