Schlumberger: Collaboration Rather than Service ProvisionBy Peter Appleby | Fri, 01/08/2021 - 10:50
Q: How has Schlumberger dealt with the pandemic-produced downturn?
A: Prior to the pandemic a new direction was identified, with a new vision and a return focused strategy centered around customer performance. Our strategy was designed to prove resilience through different cycles and this pandemic gave us the opportunity to accelerate its implementation and demonstrated to be relevant. Now more than ever, we are closer to our customers, working as partners to eliminate cost and to have a better performance and productivity which will benefit both.
Performance is key in the new normal and our focus is centered in customer performance. We want to deliver Fit-For-Basin technologies with a clear collaboration that aims to transform the relationship between operators and the service company, Schlumberger, into partners, which will allow us to understand first-hand the challenges our customers face, and enable a more effective allocation of resources that will translate in time and money savings.
We must recognize that some of the fundamentals of the industry have shifted priorities, which simply require a new approach regarding investment discipline and asset allocation. Independently of the pandemic, we have greater discipline with CAPEX. There has been a reduction in capital spending budget, but this is happening at an industrywide level around the world, it is not specific to Mexico nor to Schlumberger. We are all facing unique challenges as we navigate this new cycle.
Q: How can COVID-19 be an opportunity?
A: We are certainly viewing COVID-19 as an opportunity. It has obviously brought unexpected challenges that no one would have been able to foresee, but the pandemic pushed us to deploy our corporate strategy rapidly and improve our digital approach. We had already been working on multiskilling local talent and remote operations, but the context has forced us to accelerate a superior digital implementation and a new way of working, focused on performance leveraged by digital.
Throughout the years we have invested in our people and our technology to be able to get to where we are. For us, the key differentiator when it comes to digitalization is the ability to use data analytics. We are working to properly integrate analytics so that we can incorporate the positives into the entire chain of workflows, rather than having silos of digital utilization in different stages or companies. The integration is absolutely essential in making workflows more efficient.
Digitalization offers us a huge opportunity for value creation. For example, Schlumberger manages 60% of drilling activities remotely, which translates in less people in the field and remote support of technical experts that translate into cost savings for our client and higher competitiveness. These new technologies allow us to provide more sustainable services that are not only aligned with our objectives, but with our clients’ sustainability goals as well.
Q: How can you achieve the reduction of Authorized for Expenditure (AFE)?
A: We have several examples from other geographies in our Basin that are being implemented and will continue to be deployed in Mexico. These might sound basic but, in general, the best method to achieve AFE reduction is solid collaboration between all the parties that are involved in the drilling process. Although there are some gaps in the industry that we still need to bridge, we already have the technologies, tools and skills we need. Nevertheless, the real key is in how the collaboration of all parties come together in the drilling process, and this can be simple things like a selection of the drilling bits to how drilling fluids are managed. Also, integration with the drilling contractor, which is fundamental but was perhaps not given the importance it requires, is now absolutely essential. We do not want to be a service company working independently but a collaborator with our customers and the other parties participating in the execution of the drilling of the well. With this collaboration and efficient data management, we can provide our customers with the biggest savings.
Q: WesternGeco Multiclient Seismic Data License Sales dropped recently. How will that be mediated?
A: The lack of rounds is impacting the licensing of multiclient data as clients do not need immediate access to seismic data. Nevertheless, there were 58 blocks that were awarded in the past four years in the offshore rounds. These blocks have a commitment, and this translates into drilling campaigns, so even though we are not seeing many sales on licensing today, there is activity happening due to the rounds from previous years. The evaluation of the blocks in order to drill wells and acquire high-quality data access is extremely important in reducing associated risks. Therefore, these developments will deliver activity for us in the future.
Q: How can Mexico’s supply chain mirror the supply chain strength of more mature markets, such as the US?
A: I believe this is a key issue. The Energy Reform enacted a few years ago brought new players into the country, providing new opportunities but also creating a new environment for the industry. It is true that there are more consolidated markets in certain aspects, but the industry is not new to Mexico, nor to Schlumberger as we have been present in the country for 85 years.
In the current environment, the creation of a COVID-19 culture is extremely important to keep the industry running. Local content is more important than ever because of restrictions on movement of people. In Schlumberger Mexico, more than 90 percent of our workforce are Mexican nationals, whom are trained locally and overseas. This allows us to have expert local talent in-country that understands Mexico´s challenges and the industry requirements. But local content is not only local people. There are a lot of opportunities for Mexico to keep growing and strengthening its market. In Schlumberger we have the capacity to manufacture locally and a footprint.
As a service company, these points are valuable as they enable the success of other players here. With the success of operators the supply chain for the market will grow, and Mexico will succeed because many other companies and people are connected through this process.
Q: Where within Schlumberger’s portfolio does Mexico now sit and what are the company’s plans here?
A: Mexico remains a major geography for Schlumberger and our projects are supported at the corporate level. Our new structure allows us to respond to our client’s specific needs in a more effective and agile way.
Our No. 1 priority now is the safety of our personnel, so we have applied what we call “Life Saving Rules” which have enabled us to protect our people and continue with our operations.
We are committed to the development of the Mexican industry hand in hand with our customers, not as a service company, but as partners who understand their challenges and objectives. This is crucial as it plays a part in the country’s success, and ours too. As a Socially Responsible company, we look to continue supporting our communities, collaborating with education, and with the reduction of emissions, not only to meet our goals, but to help our customers meet theirs as well.
Schlumberger is the world’s leading provider of technology for reservoir characterization, drilling, production and processing to the oil and gas industry. Schlumberger works in more than 85 countries and employs around 100,000 people.