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Business models for future E&P technology generation

	Part 1: Panel discussion

 
"We are walking into a future that will belong to the superbly effective companies. Technolo-gies, I believe, will make a very big difference in becoming effective for many years to come. However, we may have to generate technologies differently." Yoram Shoham, vice president of External Relations for Shell International Explor-ation and Production, used these provocative words to open a high-level panel discussion organized by the SEG Research Committee, chaired by Shoham, and titled: "E&P Technology Development in Times of Uncertain and Weak Economy." The discussion was held at SEG's 1999 Annual Meeting. The principal theme was future business models for E&P technology generation. Representatives from major oil companies, major service companies, and academia constituted the panel; each shared his opinion in prepared comments and in response to questions from the audience.

Shoham

Matthias Bichsel, director of Shell Deepwater Services and the first to present prepared remarks, began by emphasizing that geophysicists live in a commodity marketplace. The long-term price trend for commodities is inexorably downward. Moreover, commodity prices, particularly oil prices, have become increasingly volatile. To mitigate the effects of price decreases and volatility, technology development must focus on cost reduction. Bichsel stated that: "At Shell, we use the phrase strategic cost leader. In the technology field, this describes those who are best at deploying research dollars in a smart way where they count for most and give the fastest return. We have to demonstrate to our shareholders that technology is a competitive advantage. Technology isn't R&D itself—R&D doesn't earn any money—it is the successful application of technology that counts."

Bichsel

Bichsel presented three "time slices" for technology development: yesterday, today, and tomorrow. Yesterday, most major oil companies and large service companies had their own R&D labs. In the boom times of the 1980s, this worked. Gradually, . . . [Full Text of this Article]