Technology is a game-changer

Nov. 21, 2017
Is there any doubt that the future of the energy industry is intertwined with advances in technology? Surely not.

Is there any doubt that the future of the energy industry is intertwined with advances in technology? Surely not. In fact, I think it's fair to say the changes that all industrial sectors are undergoing today are as significant as those that occurred about 200 years ago with the onset of the Industrial Revolution. And the pace of change has certainly accelerated.

The old saying "Lead or get left behind" seems to be applicable in the current environment. With current soft oil prices, it's crucial to find ways to improve efficiency throughout the enterprise. If your competitors are using a technology that helps bring this about, you had better be willing to do the same just to keep pace.

Maynard Holt, CEO at Tudor, Pickering, Holt & Co., recently asked me to visit with him in the bank's offices in downtown Houston. After I arrived, he introduced me to two colleagues, John Gibson and Robert Steel.

Gibson joined TPH in May as a senior advisor. He previously served as president and CEO at Tervita Corporation, and prior to that was a director at Parker Drilling for over a decade. Before that, he held several senior positions with Halliburton, including president of the Energy Services Group. He is an active member of the University of Houston's Energy Advisory Board, is a trustee for Houston Baptist University, and assists the University of Texas at Austin's Bureau of Economic Geology Visiting Committee and the Institute for Global Ethics, Advisory Committee.

Steel is a partner and CEO at Perella Weinberg Partners in New York. (TPH was acquired by Perella Weinberg last year.) He spent nearly 30 years with Goldman Sachs, rising to head of the Global Equities Division, and also served as vice chairman of the firm. Later, as CEO of Wachovia Corporation, he oversaw the sale of the bank to Wells Fargo & Co. He also was New York City's deputy mayor for economic development where he was responsible for the Bloomberg administration's economic strategy and job creation efforts.

What they wanted to talk about was TPH's new emphasis on technology. If these three men have their way, TPH will be leading the way as an investment bank and trusted advisor related to new technology adoption in the energy industry.

Holt commented, "We have been watching all the changes happening in oil and gas around the use of data, predictive analytics, machine learning, artificial intelligence, completion and downhole technologies, sensors, and many other technology innovations coming into the traditional oil and gas space. We believe there is a business in advising energy companies around the development, acquisition, and use of technology, private and public investors around their investment strategy in the space, technology companies trying to better penetrate the energy industry, and private energy technology companies regarding their M&A and IPO options."

He added, "There are literally hundreds of companies focused in this space, ranging from the integrateds, the large technology companies, independents, oilfield service companies, E-Tech startups, as well as private equity and venture capital players. We believe this is a great opportunity for TPH to establish a new wing of the energy advice business."

With this E-Tech investment banking effort in mind, TPH recently announced it will host its inaugural Energy Disruption Conference in Austin, Texas, on Nov. 10. The conference will focus on showcasing companies involved in developing and deploying disruptive technologies in the energy industry.

Gibson is spearheading the strategy to build out an energy technology banking practice. He will help TPH identify and follow the technologies with the greatest promise for materially changing the performance of the sector.

"We are in the midst of significant technological disruption in the energy industry, and we believe the best technologies have yet to be uncovered," asserts Gibson. "Our Energy Disruption Conference is an opportunity for those companies and startups in this space to promote their businesses to a C-Suite audience of oil and gas clients, venture capital firms, and private equity investors."

Steel recalled his experience as deputy mayor of economic development in New York during the Bloomberg administration. He remarked that a key initiative of Mayor Bloomberg was to encourage and grow the technology sector of that city's economy. Steel led the applied sciences initiative, which established the Cornell-Technion campus on Roosevelt Island and the New York University Center for Urban Science and Progress initiative in Brooklyn.

Steel, who serves as chairman emeritus of the Aspen Institute's Board of Trustees as well as numerous other groups and organizations dedicated to furthering scientific and economic education and interests, expressed strong support for TPH's efforts in this area. It's likely that this new wave of technology will be transformational, he said.