AI is hot, but industry leaders remain firm that drilling is a people business

By Linda Hsieh, Editor & Publisher

The drilling industry has always been innovative, but it has never been fast moving. Changes tend to permeate through the industry slowly and steadily, so it’s not surprising that many of the same issues that were top of mind for industry executives a year ago are still being mentioned by the industry’s leaders today: operational efficiency, cost and affordability, and automation and digital technologies.

This year, DC talked with executives from five companies – ADES Group, Corva, EQT, HMH and Precision Drilling – for our annual Critical Issues in Drilling & Completions series. One thing that was clear from these one-on-one conversations was that AI was no longer something for the future. AI is already being used throughout rig and drilling operations with positive results, although they recognize there’s still ample room to develop more sophisticated and value-adding applications.

The challenge for more widespread technology adoption, whether it’s AI, automation, robotics or digitalization, is still around the economics. As Carey Ford, President and CEO of Precision Drilling, pointed out, drillers need time to scale and deliver repeatable results when it comes to technology innovations, but operators don’t really want to wait.

“With technology and capital, those challenges are closely linked, but the conflict is due to differing time horizons and complications from commodity price volatility,” Mr Ford said. “Technology typically requires capital, and capital requires a return, but the investor timeline is currently focused on the short term. Our customers’ capital providers want them to deliver returns today. They want to see technology driving efficiencies and cost reductions – today.”

For companies like Corva that focus on delivering AI-powered software, the hesitancy of operators and drilling contractors to be “first movers” remains a major barrier to innovation. “The real challenge is not technology. It is incentive alignment,” said Ryan Dawson, who founded and now leads Corva. “Rig contractors operate in a mature business with tight margins and limited ability to charge operators more, which makes innovation difficult to justify.”

This means that tech developers often have to rely, as least initially, on another company willing to take a leap of faith. But what also helps drive adoption is focusing on efficiency as the value driver, Mr Dawson said. Investments in innovation start to make more business sense when there are measurable efficiency gains.

Still a people business

While the industry leaders we spoke with all championed technology, they also all recognized that drilling and E&P remains a people business.

“We see AI as a force multiplier for our engineers and scientists, not a replacement for them,” said Sarah Fenton, Executive VP of Upstream at EQT Corp. “The way we think about AI right now is, rather than boiling the ocean, we’re breaking it down to the simple, repetitive things. Where can AI do the housekeeping for us? We don’t want to do laundry and we don’t want to do dishes; we’d rather paint or garden. So how can we have AI do the dishes and the laundry for us?” (See Page 10).

Along with this continued recognition that the human element will remain core to our business, industry leaders also reiterated the need to maintain focus on safety. “Safety has always been and will always remain our greatest responsibility and concern,” said Mohamed Farouk, Group CEO & Vice Chairman of ADES. “We view it as our license to operate. Nothing we do is more important than ensuring that our employees return home safely at the end of the day.”

A lot of exciting work is ongoing in our industry today – read our Q&As in the following pages to find out more! DC

Linda Hsieh can be reached at linda.hsieh@iadc.org.