• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 2 days Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 6 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 18 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 1 day "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 1 day GREEN NEW DEAL = BLIZZARD OF LIES
  • 24 hours An Indian Opinion on What is Going on in China
  • 21 mins Nord Stream - US/German consultations
  • 1 day Can Technology Keep Coal Plants Alive and Well?
  • 2 days Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 2 days Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 4 days Perfect Energy Storm in Europe: turning our back on fossil fuels is easier said than done!
  • 22 hours U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 1 day Storage of gas cylinders
American Oil Drillers Are Facing A Sharp Rise In Costs

American Oil Drillers Are Facing A Sharp Rise In Costs

Oilfield services costs are soaring…

Why OPEC Didn’t Boost Production By 800,000 Bpd

Why OPEC Didn’t Boost Production By 800,000 Bpd

Concern that demand for oil…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Will Self-Driving Oil Rigs Hit The Market Before Self-Driving Cars?

Last week, drilling contractor Helmerich & Payne bought Motive Drilling Technologies for up to US$100 million. The deal passed without much fanfare because of its size, perhaps, but it certainly deserves attention as a harbinger of what direction the oil industry is taking: automation—and further down the road, autonomy.

Motive is the creator of the Bit Guidance System, which uses algorithms to guide the process of directional drilling, effectively taking charge of drilling decision-making. According to the two companies, the technology enhances drilling efficiency, which lowers costs and improves output rates once a well is drilled.

Drilling efficiency is the latest focus in the post-crisis oil industry, but for the most part, industry players have been talking about it only in general terms. The Bit Guidance System is a pretty specific example of this efficiency, as is Schlumberger’s Rig of the Future project.

The idea of an autonomous machine needing no ongoing input or manipulation by a human has garnered a lot of attention in recent years with a focus on self-driving cars, and more recently, trucks, which some argue will make a bigger splash than self-driving cars as their economic benefits outweigh those of cars.

The idea of a self-driving—or more accurately an “autonomous”—drilling rig sounds more far-fetched, but that’s probably because it’s not being talked about so much. This is about to change, and likely sooner rather than later.

Related: Europe Joins Race For Cheaper Batteries With New Gigafactory

Last year, McKinsey released a survey that showed the adoption of digital technologies could save oil and gas operators about a fifth of their capital expenditures and between 3 and 5 percent of their upstream operating expenses. That was at a time when the rush to cut costs was particularly intense. Now international prices have improved somewhat, but oil and gas companies are eager to continue lowering their breakeven point—something that service providers are only too happy to help them with—for a fair price.

One oil analyst, Richard Zeits, suggested in an analysis of the Helmerich & Payne/Motive acquisition that the deal may be the first of many of this kind, where smaller oilfield service providers partner with software development firms to gain a competitive advantage in an increasingly competitive industry. Also, these partnerships will make smaller players better positioned to take on the big boys such as Schlumberger, Halliburton, and Baker Hughes.

The taking-on will likely be mostly in the area of pricing—the big boys are not sitting idly by. They are also going digital and automated. Yet as a rule they charge more for their solutions, so prices will be the playing field. As Zeits points out, Schlumberger’s Rig of the Future sounds very attractive, but the fact that the company has control over the prices may push some potential clients away. Smaller, independent contractors, on the other hand, would be more flexible with pricing, forcing Schlumberger and its peers to adopt some of that flexibility themselves eventually.

Drillers will, as usual, be the ones to benefit most from this emerging competition on autonomous rigs. They will be able to further lower their costs and continue growing production. A future of autonomous rigs will very likely be a future of cheap oil.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News