Manufacturing
An Oilfield Services Perspective
J. David Rowatt, PhD, PE
Research Director
27-Oct-2011
Agenda
•
•
•
•
•
Schlumberger at a glance
Manufacturing – Perception & Problems
Manufacturing Technology
Manufacturing Careers
Policy
Energy is Our Business
Since the early years of the 20th century, Schlumberger has been measuring the
sub surface. Intellectual curiosity and commitment to research and technology
are in our roots.
Today Schlumberger is the world's leading supplier of technology, project
management, and information solutions to the oil and gas industry.
Schlumberger at a Glance
Reservoir
Characterization
•
•
•
•
•
WesternGeco Land and Marine Seismic
Wireline Logging
Testing Services
Schlumberger Information Solutions
Data & Consulting Services
2010 Financial
Highlights
Drilling
•
•
•
•
•
•
•
Reservoir
Production
Smith Bits & Advanced Technologies
M-I SWACO
Geoservices
Drilling & Measurements and Pathfinder
Drilling Tools & Remedial Services
Dynamic Pressure Measurement
Integrated Project Management
• Well Services
• Completions
• Artificial Lift
• Subsea
• Schlumberger
Production Management
Approximately 110,000 People
• Revenue:
$27.4 Billion
• Net Income:
$4.2 Billion
• Total 2011 R&E: >$1 Billion
• 4 Areas - 27 GeoMarkets
Technology
Solutions
Representing 140 Nationalities
Working in more than 80 Countries
Deep Industry
Knowledge
Global
Culture
Technology R&D – REMS
Boston, Mass, USA
R&D Centers
Cambridge, UK
Dhahran, Saudi Arabia
Moscow, Russia
Stavanger, Norway
Sugar Land, Texas, USA
Clamart, France
Fuchinobe, Japan
Rosharon, Texas, USA
Oslo, Norway
Beijing, China
Houston, Texas, USA
Stonehouse , UK
Princeton, New Jersey, USA
Abingdon, UK
Edmonton, Alberta, Canada
Stavanger, Norway
Calgary, Alberta, Canada
Novosibirsk, Russia
Richmond, California, USA
Gatwick, UK
Pune, India
Singapore
Baden, Austria
Bartlesville, Oklahoma, USA
Belfast, UK
Singapore
Houston, Texas, USA
Tyumen/Ufa, Russia
Shanghai , China
Aberdeen, UK
Penang , Malaysia
65 Lawrence, Kansas,
CenterUSA
Locations
Alberta, Canada
700Edmonton,Projects
Curacao, Netherlands Antilles
2,500
Products
Argentina (Villa regina, Neuquen)
15,000
Employees (6000 Mfg)
Hammond, Louisiana, USA
>$4B
Int. Mfg. Rev.
Abbeville, France
Barrow, UK
Southampton, UK
Research, Engineering, Manufacturing, Sustaining
Research
Engineering
Manufacturing
Schlumberger Manufacturing at a Glance
•
•
•
•
•
Platt’s Model
Historical base in the US and France
Significant growth through acquisitions
Global expansion to support business
Multiple manufacturing models
Wide variety of activities
–
–
–
–
–
–
–
–
Foundry
Machining
Assembly and Test
Sensors
Nuclear Sources
Explosives
Trucks & Pumping Equipment
Marine Vessels
• Rapidly evolving needs and technologies
• Mixed perception of manufacturing as a good long term
career choice
–
–
–
Manufacturing is seen as being easily commoditized and exported
to low cost countries
Innovation is not clearly connected to manufacturing
Lack of career defined career path and technical recognition
• Looking forward
–
–
–
There are many considerations in manufacturing
strategy
Where is the oil and gas industry going?
What are the technology drivers?
Costing
Production Costs v. Acquisition Costs
Material Costs
• Raw
Materials
• Purchased
components
& subassemblies
Labor
• Labor cost /
hour
• OT policies
• Labor
productivity
Burden
Overhead
• Opex costs
• Capex costs
• Maintenance
costs
• Start up
costs
• Management
structure
• Reorganization
costs
Logistics
• Shipping
costs
• Storage
costs
• Tariffs
Manufacturing Technology & Processes
Factors to Consider
• Manufacturing technology & equipment (standard v. custom)
• Technical support (in-house v. out-sourced) / Co-location of
engineering (New Product Development)
• Manufacturing capacity & global footprint
• Labor skills & availability including Manufacturing Engineering
• Automation and process control
• Quality measures (QA/QC)
R&E Investment and Hydrocarbon Resources
Unconventional oils and gases
Underexplored and underdeveloped areas
Increased recovery from producing fields
Harsh and hostile environments
Industry Drivers & Manufacturing Technology
Industry Drivers
Manufacturing Technology Drivers
• Pace of technology development – Is it fast enough?
• Harsh environments (Temp., Press., Flow, Corrosion,
Abrasion, Erosion)
• Operational timescales - one day to 20+ years
• Reliability
• Ease of use & maintainability
• Operational and energy efficiency
• Environmental concerns (emissions, hydraulic
fracturing, waste materials)
• Governmental regulation
• Advanced Materials – New materials and processing
techniques.
• Alternative Materials – Scarcity or control of traditional
and/or strategic materials
• Managing the environment - Robust design and
packaging
• Miniaturization – MEMS, nano-X
• Sensing – Embedded sensors, condition monitoring
• System integration & testing
• Automation & precision manufacturing
• Green manufacturing – Emissions, RoHS
• Flexible manufacturing – adaptable facilities, lot size,
DfM
• Increased reliance on suppliers
Opportunities & Challenges for US Manufacturing
• Opportunities
– R&E investment areas are well aligned with US
natural resources plays
– US academic institutions are leaders in R&D of
technologies that benefit the energy industry
– Manufacturing benefits from co-location with
engineering (concurrent engineering)
– There is significant technology overlap with other
industries
• Challenges
– Deterioration of US as a manufacturing leader
– Industrialization of new technologies
– The “big” crew change and development of
manufacturing talent and expertise
– Government policy
Education & Hiring Challenges
• Motivation - Career expectations and
opportunities
– Manufacturing Careers
– Technical Careers
• Change Management
– Fast pace of technology change - Strain
on internal expertise in the company
– Availability of expertise – Fresh Out vs.
Experienced Professional Hire
– Hiring a specialist vs. a generalist
• Knowledge Management
– Knowledge capture
– Aggregation and organization of
knowledge
– Dissemination of knowledge across the
organization
• Developing talent
– Recognition at the university level of
manufacturing as a discipline
– A mixture of skills and degree levels is
needed
• Theoretical and applied skills
• BS, MS and PhD
– Graduate level education is vital due to
the level of advanced technology
– Internal training and development
programs demonstrate commitment to
people development
– External continuing education is vital
due to the pace of technology change
• Academia
• Professional Societies
Manufacturing Careers
•
•
•
•
Clearly defined job descriptions and requirements
Career paths in multiple domains
Ability to select top job preferences for career planning
Competency management + Training & Development
Schlumberger Eureka Technical Careers (SETC)
SETC Goals
SETC Pillars
• Recognition
• Motivation
• Retention
• Parallel technical and management ladders
• Decoupling of SETC status from job/position
• Objective technical evaluation open to all
Eureka
members
Leading at
project level:
Contributing
independently
Senior
Leading
locally:
Geomarket/
REMS center
Principal
Leading in
SLB/Industry
Leading widely:
Area/
Service
Segment/
REMS
Advisor
Schlumberger
Fellow
Policy
• Encourage global partnerships at the governmental, industrial and
academic levels.
• Foster meaningful government /industry partnerships (a Singapore
example)
– RISC – Research Incentive Scheme for Companies (targeted at Research and
Technology activities)
– IDS – Innovation Development Scheme (targeted at Development activities)
– DEI – Development and Expansion Incentive (targeted at Mfg activities)
– SDI – Supplier Development Incentive (targeted at Supply Chain activities)
• Keep the regulatory environment as simple as possible
– Partnership and dialogue for sensible regulations
– Need for stability as a means of fostering investment
– Partnership in supporting and promoting “green” manufacturing
Conclusions
• The US is the leader in developing Oilfield Services technologies … but it is a
global business
• The US is the leader in innovation … but other countries are aggressive and
catching up
• Industrialization is very important … making the leap from the research to the
shop floor. The US must maintain skill and leadership in this area.
• Manufacturing will locate where the best combination of people, technology,
supply base, logistics and cost converge
• Leveraging technology overlap between industries can give the US a
significant advantage due to size and diversity of its manufacturing base
• The development of manufacturing talent is imperative to the growth and
stability of US manufacturing
• Government policies are important and influential in business decisions on
where to locate R&D and manufacturing operations