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Companies race to innovate

Scaling up innovation and branching out into sectors outside of oil and gas are the two most important drivers of respondents’ strategic growth. However, that is difficult when margins are low.

Scaling up innovation is of high importance but performance could be better

“The challenge I see on the scaling side is that innovation and technology very often cost a lot of money – especially when it concerns new technologies,” says Manfred Vonlanthen, CEO of Swire Energy Services. “And the oilfield services sector is still heavily over-leveraged, with a lot of that debt about to mature.”

Vonlanthen believes the answer lies in collaboration and innovative business models.

“What we have seen in many sectors is that real innovation happens when the supply chain or suppliers enter into partnerships with customers – the oil companies,” he says. “But you need to have business models where the benefit and the risk from those innovations is shared between the parties.”

Business models and technology are supporting innovation

of respondents say they are looking to engage with Manufacturing-as-a-Service over the next 12 months

Scaling up robotics and automation is among the most popular activities over the next 12 months

Which of the following activities is your company already in the process of doing, or planning to do over the next 12 months?

The advances in the Internet of Things and additive manufacturing allow oilfield services to carve out a niche area through Manufacturing-as-a-Service, providing speed to market without having to store large inventories.

As many operators and oilfield services are looking to have leaner operations, outsourcing manufacturing of parts and components to specialist suppliers has become a popular choice.

“3D printing is valuable for creating spare parts that are not easily accessible,” says the CTO of a Swedish oilfield services company. “It also allows the recreation of the necessary piece or can recreate the moulds, templates or tools used in the manufacture of spare parts.”

Asset-light business models are a way to save cost and focus on core business areas.

Schlumberger CEO Olivier Le Peuch announced in 2020 that he planned to move the company towards becoming an asset-light software and services-driven business, to balance exposure to less drilling activity.6

Tyler Fowler, Marketing Manager for Baseline Energy Services, told Oilprice.com that the oilfield services companies that adopt new technology and move forward with more eco-friendly business models will survive and thrive.

“We see service diversification, geographic dispersal, the movement towards subscription revenue models, and a prioritisation of services that achieve ongoing cost reductions for upstream operators as key attributes of the successful OFS [oilfield services] companies in a post-oil future,” says Fowler.7

of respondents plan to switch to an asset-light business model over the next 12 months

of respondents say that high inventories and certifications for parts and components are proving a challenge

Robotics and automation are among the few remaining areas where oilfield services can still squeeze out efficiency gains and cost reductions. This means more sensors, the Internet of Things and digital data processing.

say they plan to adopt robotics and automation in the next 12 months

Automation of complete workflows and processes from start to end will see more innovation – from the wellsite to the end report that ends up on a desk. Operators want to continue the shift to remote operations, leaving more and more tasks and decisions to automation and lowering personnel on board on installations.

ALEX NICODIMOU VP Sales & Marketing, Interventions Solutions, Welltec