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PETROLEUM DIRECTORY: People plus technology make winning formula for oilfield services company
Sarah Hurst Petroleum Directory Contributing Writer
Oilfield services giant Schlumberger will start 2005 with a new general manager in Alaska. Eric Larson returns to his home state, where he was formerly the company’s coiled tubing drilling manager. Since he left nearly eight years ago Larson has worked in various management positions in Malaysia, Indonesia, Australia, Houston and, most recently in New Orleans, La. Larson will replace Douglas Stephens, who is moving to Houston.
“We’ve got a new general manager who really knows the Alaska business,” said Daniel Palmer, Schlumberger’s marketing manager for Alaska. Larson will oversee a growing number of employees — around 400 at present. Characteristic of his previous assignments, Larson will emphasize safety and efficiency as well as implementation of technologies that can lower production and drilling costs.
“The bottom line for operations for BP, Unocal and ConocoPhillips in Alaska is that they’re trying to leverage technology to reduce cost. We’ve invested a lot of capital in the equipment to make things more efficient,” said Palmer. As an example, he cites the new two-man slickline units recently deployed for BP. New technology: rotary steerable system One of Schlumberger’s biggest new technological developments is its PowerDrive rotary steerable system. Using this, Schlumberger has been able to reduce drilling times for many wells by 20-30 percent, which results in a similar percentage in cost savings. “This system allows you to drill faster and drill with fewer problems,” said Palmer. “It also allows you to drill extended reach wells that you previously couldn’t drill, because you can drill further laterally.”
Schlumberger also introduced multi-phase metering in 2004. Oil, water and gas traditionally had to be separated in order to measure the flow rates. Now they can all be put through a single device that measures all three phases. “You go from a separator that has to have 40 barrels of separation capacity to a meter that is basically a piece of pipe,” said Palmer. “That’s a huge development. It’s taken the industry years and years to really get acceptance of the measurement, but we’re finally there.”
To facilitate the drilling of viscous oil fields on the North Slope, Schlumberger uses a tool called the MDT — Modular Dynamics Tester — which has had great success in the last three years in sampling and getting accurate measurements of the oil properties. “That has really been a benefit to our customers, because they know what they’ve got now before they develop the field,” said Palmer. “Everything we do is driven by our customers needs.” These include BP, ConocoPhillips, Unocal and most other oil companies active in Alaska. Work force based in Anchorage Another way that Schlumberger reduces costs is by doing as much work in Anchorage, as opposed to the North Slope, as possible. “We don’t have additional administrative and management levels on the North Slope, they’re all here,” said Palmer. Engineers, geologists, petrophysicists and production specialists can sit in a comfortable office building with a view of the Chugach mountain range and see what’s happening on the slope on a computer screen. In the past, getting reliable bandwidth and even cell phone coverage in the field was a big problem. Fiber, satellite and wireless communications have improved considerably.
“Everywhere else in the world they’ve had reliable satellite communications for the last 15 years, but because we’re so far north on the slope, we’ve had to wait for a number of enablers that haven’t been there until the last few years,” said Palmer. “The biggest saving will probably be in the turnaround time of operations. You’ll be able to make decisions faster, and instead of going out to a location three times to do something, you can see the data in real time, make the decision and act upon it instantly.”
On the less positive side, Schlumberger’s subsidiary WesternGeco exited the seismic business in Alaska in 2004 after over 40 years of continuous presence in the state. To make the business viable, they needed long-term contracts, and no one was willing to make such commitments. However, WesternGeco still has the largest multi-client seismic library of any company, so people can buy the historical data. Although 3-D seismic data has probably done more to find new reserves of oil than any other new technology in the oil business, overcapacity and pricing pressure have made it an uneconomical business in Alaska.
“Although the major oil companies in Alaska have had a great year in 2004 due to high oil prices, service companies in Alaska have been hit by increasing commodity and operating costs,” said Palmer. “With the large number of people we employ, increased medical insurance and pension costs have also been an issue. We are hoping for a little more balance in 2005.” Gas pipeline expected to sustain business The proposed gas pipeline will be the key to sustaining the oil and gas business in Alaska for the next 50 years, instead of the next five years, according to Palmer. Another goal is to improve the recovery from large, mature oilfields. “That is going to be the number one driver to meet the world’s energy needs over the next 20 or 50 years,” said Palmer. “Most of the oil is not going to come from new fields, it’s going to come from old fields, and in Alaska I think we’re at the forefront of that process because we have large fields that are already very heavily depleted.”
Schlumberger is very enthusiastic about community involvement and has made long-term commitments to two Anchorage non-profits: AWAIC (Abused Women’s Aid In Crisis) and Polaris Middle School. The company also has a big United Way drive every year. Schlumberger’s own employees aren’t forgotten, either: the annual employee recognition winners, Aaron Applehands and Matt Trask at Prudhoe Bay, received round-trip tickets to Hawaii for demonstrating quick thinking in difficult and potentially dangerous situations. Safety the top priority Larson has already made it clear that safety will remain Schlumberger’s top priority in 2005. For the third year in a row, the company has won the Governor’s Award for Health and Safety Excellence. To qualify, companies must demonstrate improvements in five categories, such as total lost work days and automobile accidents. Now the new quality, health, safety and environment manager, Paul Able from California, will have to maintain the high standards set by his predecessor, Graeme Lawrie, who has moved to Norway.
“We’ve had more people working in the field than ever before for Schlumberger and we’ve had a lot of new employees, yet we’ve had an exceptional year in terms of both very few injuries and exceptional spill performance,” said Palmer. “People have said safety first for about the last 20 years, but now it really is the first discussion. If it can’t be done safely and cleanly, don’t do it.”
Palmer, who is from England, came to Alaska in 1997 after working in the Middle East and South America. He worked as a wireline engineer and field service manager for Schlumberger Alaska until 2001, then spent a year at company headquarters in Paris and a year in Scotland before returning in 2003 as marketing manager. “Alaska is probably the cleanest, safest oilfield in the world,” he said. “It gives me a sense of pride in what we do. You can visit a location where there’s been a huge operation and other than the tire tracks and the footprints in the snow, you wouldn’t know it was there. The key to success is going to be leaving it in pristine condition.”
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