Mikaila Adams
Editor-News
The offshore deepwater segment of the oil and gas industry is seeking transformative technologies from sources both inside and outside of the industry and working to refine the ways in which it partners with smaller companies and balances risk.
Executives spoke on the topic while convened on a panel earlier this month to discuss venture capital and its role in driving offshore innovation at the Offshore Technology Conference in Houston.
“We cannot invent everything,” said Greg Powers, vice-president of global innovation at Halliburton. Noting one of the challenges in seeking partnerships outside oil and gas, Powers said, “You’re asking a three or four-person company to divert their attention from an idea they have to something that may be valuable to me that they might not understand.” Those looking to collaborate with companies outside of oil and gas must sell on the value of the work, its importance to society, and communicate why the companies should work together, he said.
Innovation and risk
Once partnered, balancing risk is key. For one, Powers said, very few startup companies outside oil and gas comprehend the risk taken when operators look to implement a new technology in deepwater. For that reason, he’s looking for “resiliency in the startup company to letting us take the lead in defining how risk is mitigated.”
Powers noted that while the industry rightfully cannot tolerate risk applied at scale, it hasn’t learned how to translate the acceptance of risk while trying to achieve scale—when it doesn’t have the same consequences. “We’re not going to be starting new technologies for the first time in a presalt well. We’d better think about how we mitigate that risk before we get there and approach it in a way that’s intelligent and measured,” he said. At Halliburton, Powers has started an internal discussion about sharing risk when it comes to new technologies and changing big corporate mentality about success. “A lot of the times we’re going to try things and it’s not going to work. We have to be mindful not to punish people because the thing they worked on failed,” he said.
Kemal Anbarci, vice-president and managing executive of Chevron Technology Ventures, agreed. “I don’t think the larger companies have the risk tolerance to be able to do some of these technologies, so the value of the startup to be able to do these things is tremendous. If you’re a project manager, you play not to drop the ball. Every project you have should be successful. In a startup, a lot of companies fail. You play to win as much as possible, but if it dies early on, it’s going to die a natural death,” he said.
Ram Shenoy, chairman of WellDiver, said the goal is to play to the strength of individual companies. “Big companies have developed organizations to do some things extremely well. They’re managing certain types of risk really well. It’s very difficult for anyone else to dupe them at what they do. The trouble is what they do means it’s difficult for them to do other things.”
Referencing time spent at Schlumberger, Shenoy said he had to prioritize certain promising ideas out of existence because “it didn’t make sense to invest in anything unless you could see a $500 million revenue stream for it.” It was the right thing to do in that environment, and other large oil field services companies would do the same, he said. It isn’t about startups displacing companies in certain areas, he said, but about using companies to their advantage.
Radical departures
Finding a balance between mitigating risk at scale and allowing startups to push innovative ideas is the goal, said Powers. “Everything we do and every opportunity we undertake is going to be a radical departure from common practice. If it’s not, we can’t expect it to have any step change in value. I didn’t come to this job to do continuous improvement…there are people who are supposed to do that. This is a radical departure event.”
