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A couple of days ago Halliburton showcased what it called “a first-of-its-kind“ offering dubbed Prodigi—a system automating parts of the hydraulic fracturing process. More specifically. Prodigi uses algorithms that analyze data about the well and then automatically adjusts the pump’s rate of operation for best results. The purpose. of course. is higher fracking accuracy and therefore higher yields.
Now. in an environment that increasingly features headlines containing “digital“. “big data“. and “automation“ somewhere. this may not look like a big deal. But it has the potential to become a big deal if Halliburton continues to pursue its digital innovation agenda. which it has every reason to do.
“This is new territory for the industry.“ Bloomberg quoted Scott Gale. Halliburton’s strategic manager of fracking operations. as saying in a recent story. “We recognize that digital technologies are descending on our industry. so expectations are high.“
Indeed. now that the industry has gotten a taste of how automation and big data analytics can make life easier and keep costs low. expectations are bound to run higher and higher. For Halliburton. the focus on automation and other digital tech is a way of keeping up with bigger rivals Schlumberger and GE’s Baker Hughes. and gaining an edge over them.
The company’s ultimate vision is to have an entirely automated oilfield and yes. this means robots. But this is still in the future. The present features the automation of more and more parts of the fracking process where Halliburton has the lead over its competitors.
“By doing this [automating the fracking process] we can tune a frack job for pumping efficiency or for maximum reservoir response all while finding the right balance to pump the most effective frack treatment possible.“ Gale said as quoted by E&.P Magazine. The executive was speaking at Halliburton’s LIFE 2018 conference. whose focus this year was. broadly speaking. the digitization of the oilfield.
With the influx of software companies developing products specifically targeting the oil industry and with much of the upstream industry itself still prioritizing cost efficiency above things like production growth. digitization and automation will be words we will be hearing more and more. along with big data. of course. and cloud. and all the rest of them.
While automation is important for the oil industry as a whole. it may turn out to be particularly important for shale oil and gas. Shale wells drain much more quickly than conventional wells. so there is a lot more new-well drilling involved. This means more money. And this means that anything that can optimize the whole process from well-drilling to fracking to production will be good news for an industry that although recovering. is still running on negative cash flow.
In fact. it may be in no small part thanks to innovation such as Prodigi that this year the U.S. shale industry might book positive cash flow. This will be the first year ever in the black for shale drillers. If automation helps—and it does—then we could reasonably expect a lot more news like Prodigi in the near future.
