[giggidygig]

Having worked in the industry for 10+ years now, first on deepwater oil rigs (drilling), now working IT for a large oil company, some things i've observed/experienced first hand which could provide some color to the automation side of things:

1) The smaller the company, the more agile/nimble you are forced to be out of pure need (no money or resources), this means you have to look at automating things in order to just get you're job done. Because if you dont, you end up working 24/7 because you are the only one there to do it. Just like a start-up.

2) The bigger the company, the less agile/nimble, more bureaucracy/politics and people, the same driver is just not there anymore, so the focus on automation isn't as intense.

3) The contractor/service companies (Halliburton, Schlumberger, BakerHughes/GE, Transocean, Nabors etc..) are probably the only ones in the industry that could successfully develop and use these types of automation technologies, because it would make their services cheaper for them, NOT make it cheaper for the oil companies.

4) The big oil companies have the money, but they simply don't have the ability to effectively produce/innovate internally as a smaller company would.Hence the only way they would adopt anysort of automation tech, would be as a service, even then it wouldn't quiet match up with their own internal business needs as the company just isn't wired to think that way.

5) Currently, the buzzword/hype vortex within big oil is all BigData/Cloud/Automation/AI etc.., but is sadly used internally to blind higher ups to approve internal projects that really aren't much more than a hobbled together mess of ancient tech.

So from my perspective, automation will eventually get there in oil/gas, but it will take a glacial pace for it to happen for the oil companies themselves, but once it eventually get's there, that's when you will see the major watershed "automation" changes in the industry.

[hackuser]

Thanks for sharing your knowledge of the industry. One question:

> The contractor/service companies (Halliburton, Schlumberger, BakerHughes/GE, Transocean, Nabors etc..) are probably the only ones in the industry that could successfully develop and use these types of automation technologies

> The big oil companies ... simply don't have the ability to effectively produce/innovate internally as a smaller company would.

Aren't the contractor/service companies large? Why are they more innovative than big oil?

[giggidygig]

They are large, but not as big as the Super Major Oil Companies (Exxon, Chevron, Shell, BP etc..).

Oil Companies think large and long term (10-50 yr cycles), meaning their payback/revenue period is also longer, and as a result their business strategy/forecasting is longer.

The cycle usually starts with a lot of upfront Capital to build up the capability to find/drill/produce/refine/sell the oil.

Once they have that capability, then the focus is on producing oil in the cheapest most efficient way possible over the 10-50 yr life of the oil field.

Compare this to the services/contractor companies, whose work is mainly fixed/short-term contract based, as a result their business strategy forecasting is alot shorter. It is also more competitive, so they have to constantly think up new and better services to provide the oil companies, while also trying to reduce their own operating expense to extract as much margin as possible.

So being smaller, with shorter business cycles, and more focus on doing things better, smarter, cheaper, the result is that the service/contractor companies really have more opportunity and an inherent need to innovate, simply as a way to survive and make profit.

[giggidygig]

Slightly off "automation" topic - but their are some pretty cool examples of service/contractor companies using/leveraging technology to do things better ( specifically in the drilling space), which the oil companies benefit from, but could never have developed themselves in my opinion:

1) Downhole Telemetry Systems (Communication for Downhole tools) - using EM, Fixed Wire in Drill Pipe and Mud Pulses (Pressure changes in Mud) http://www.halliburton.com/en-US/ps/sperry/drilling/telemetr... http://www.slb.com/services/drilling/mwd_lwd/mwd/powerpulse....

2) Point the Bit/Push the bit/Rotary Steerable Systems - ability to remotely point the drill bit in a desired direction http://www.halliburton.com/en-US/ps/sperry/drilling/directio... http://www.slb.com/services/drilling/drilling_services_syste...

3) Loggin While Drilling Technology - having inbuilt sensors of various types on the drill bit, collecting/sampling while drilling http://www.halliburton.com/en-US/ps/sperry/drilling/lwd.page... http://www.slb.com/services/drilling/mwd_lwd.aspx