The Oilfield Service Industry in the Time of Energy Transition

Oilfield service (OFS) companies are walking a tightrope as they balance continuing to service legacy oil and gas customers with developing and deploying services in the renewable space. 

Three of the big players—Schlumberger, Halliburton, and Baker Hughes—are each taking their own path to green energy transformation. 

• Halliburton formed its own clean energy incubator/accelerator. 

• Schlumberger launched a new clean energy business unit.

• Baker Hughes is weaving clean energy tech into its existing verticals.

Balance is the name of the game as OFS leaders are forging ahead in a rapidly changing energy sector, maintaining their core competencies, and navigating new and maturing markets.

From Progressive

Halliburton is looking ahead and putting themselves in the clean energy tech space. In 2020, it formed Halliburton Labs, an incubator/accelerator helping with the growth of innovative, early-stage companies focused on cleaner and more affordable energy. The lab recently announced its second cohort and is investing in companies that are working on edge and AI solutions, carbon management, and more.

Clean energy isn’t relegated to the incubator at Halliburton. In January 2021, the company announced that it had successfully deployed the industry’s first electric-grid-powered fracturing operation on several pads for Cimarex Energy in the Permian Basin. According to the announcement, the operation lowered the emissions profile and used utility-powered electric fracture pumps that achieved 30-40% higher pumping performance than with conventional equipment.

In 2020, Schlumberger launched Schlumberger New Energy with the goal of having its portfolio made up of 50% or more renewables. Ashok Belani, executive vice president for Schlumberger New Energy, said each renewable energy type “will have an economy or industry ecosystem of its own.” Schlumberger New Energy hopes to realize the business opportunity within many of them.

One area Schlumberger is focusing is carbon capture, utilization, and storage (CCUS) because of its legacy knowledge of underground reservoirs. Earlier this year, Schlumberger New Energy announced a partnership with LafargeHolcim, a multinational building-materials manufacturer,to capture and sequester emissions at two of its cement plants.

Baker Hughes CEO Lorenzo Simonelli has said that the company is rebranding itself as an energy technology company, even bringing on a vice president of energy transition, Allyson Anderson Book.

Book said, “We’ve been involved in hydrogen, CCUS, geothermal, and energy storage for years, so this is a natural progression for us to leverage what we’re doing in our core company. But, we’re also looking at new frontier spaces.”

Baker Hughes will collaborate with Bloom Energy on the potential commercialization and deployment of integrated, low-carbon power generation and hydrogen solutions over the next few years. The company also acquired Compact Carbon Capture (C3) in late 2020 and is accelerating adoption and deployment of new fuel sources and emissions solutions, including hydrogen, CCUS, geothermal energy, energy storage, and net-zero LNG.

As these OFS companies balance priorities and walk the tightrope, let’s hope they don’t fall OFF.

Digital Transformation is Key in Green Energy Transition

Advances in data collection, processing, and analysis have been vital in providing energy producers the information they need to optimize operations to improve efficiency and reduce emissions. 

From Petroleum Economist

From 5G and AI/ML to AR/VR and cloud computing, adoption of these technologies is helping early adopters streamline and will help all companies as they progress through digital transformation. Research by Deloitte found that digital transformation provides an opportunity to gain safety, efficiency, and significant financial benefits—all core components of the transition to more sustainable renewable energy.

Efforts to digitalize can’t be completed in a silo. A single company or point in the supply chain can’t make the impact that an industry-wide commitment to using data to its fullest potential can. 

Digital Twins Through the Entire Lifecycle

Organizations are actively implementing digital twin strategies with intelligent engineering information at their core to transform plant performance. Creating a data-centric culture that collates and verifies engineering data into a single, trusted hub, right from the initial phases of a project, is the cornerstone of a reliable digital twin. 

By integrating data from the architecture, engineering, and construction (AEC) phases, all the way through the life of an asset, a digital twin can serve as a single source of truth and optimize maintenance and operations. 

Digital twins can be beneficial for both existing operational assets as well as new projects for carbon capture, hydrogen production, wind and solar generation, and more. Once a data-centric approach is implemented in a capital project, owner-operators and engineering, procurement, and construction (EPC) contractors can reuse the same data structure on future projects, providing opportunities to continuously improve.

Steve Parvin, head of information engineering at AVEVA, points out the benefits of digital twins over time:

• Immediate wins: Connecting people, data, and decision-making drives down costs, reduces waste, and improves project efficiencies.

• Medium-term wins: By developing a data-rich digital twin right from the conceptual phase of an engineering project, the owner operator can receive an accurate digital twin at handover. 

• Long-term wins: If developed from the initial concept and maintained throughout the operational phase, a digital thread is created that provides actionable performance insights and enables sustainability key performance indicators to be tracked.

Imagine a world where every facility in the energy generation, storage, and distribution supply chain has a digital twin. The industry could have the information necessary to continue to optimize operations, reduce emissions, and continue along the energy transition journey. 

That’s our two cents on digital twins.