PESA Energy Connection Magazine, Issue 2

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CONNECTION Oilfield Services & Equipment Magazine

Clay Williams

Finding hope for the future

The ESG Issue Why ESG matters more than ever

Resilience & Upskilling What to do when the plan doesn’t apply anymore Q2 2020

Energy Connection/Q2 2020




CONTENTS/Issue No. 2 3




Oilfield Services & Equipment Magazine

A PESA Publication EDITOR Kristin Hincke






ESG RESOURCES Valerie Banner, Exterran Corporation Jock Pool, Oceaneering


SCRAP SOLUTIONS Trey Lipsitz, Market Street Recycling


GREEN CHEMISTRY Martin Shumway, PE, CPG, Locus Bio-Energy Solutions


HUMAN RIGHTS Rebecca Stephen, Seadrill




THE VALUE OF AUTOMATING THE RIG FLOOR Robert Thibodeaux, PE, Frank’s International Jeremy Angelle, Frank’s International




2500 Citywest Blvd., Suite 1110 Houston, TX 77042 p: 713-932-0168 f: 713-932-0497


ABOUT THE COVER Clay Williams, Chairman, President & CEO, NOV. (Photo by Raymond Sauceda) Energy Connection is published quarterly by Petroleum Services & Equipment Association as a complimentary publication. Interested subscribers should email to be placed on our mailing list. Postmaster: Send address changes to PESA, 2500 Citywest Blvd., Ste 1110, Houston, TX 77042. Copyright 2020 Petroleum Equipment & Services Association


PESA’s C om mi t m e n t By Leslie Beyer, President, PESA

Members, As the trade association representing the OFS sector, it is PESA’s commitment to do everything in our power to equip our members with the tools and resources needed to respond to the crisis and emerge stronger on the other side. We’ve been hit hard by recent events and we’re all looking forward to defeating the virus and beginning the recovery. Our commitment permeates everything our team has done since much of the world has implemented lockdowns and social distancing measures. We’ve maintained an active schedule of online meetings and events to deliver guidance, advice and best practices from within the sector and from outside experts. We’ve kept a close watch on legislative activities and guidance from government agencies to ensure our members have access to state and local orders, as well as federal programs designed to support businesses during the crisis. And, we’ve worked with policymakers, media and industry allies to make sure provisions that help the OFS sector are included in final policies. While keeping pace with the volume of information and the speed of change, PESA has also continued to look to the future. We launched our Environment, Social and Governance Center of Excellence to augment

PESA’s range of ESG knowledge-building and best practice sharing events for members. The new online hub provides a constantly expanding repository of ESG information and resources. In this difficult environment, ESG issues remain critical to the business and are at the forefront of many challenges we are currently facing. PESA will maintain its commitment to support our members with the resources needed to navigate today’s immense challenges on all fronts and emerge stronger when these unprecedented times have passed. The day will come when the world is ready to resume more normal activity. When it does, it’s critical the OFS sector is ready to unleash the innovative spirit that will produce the energy we’ll need to kickstart the economy and rebuild a prosperous future.

Leslie Beyer PESA President

Energy Connection/Q2 2020



As the industry looks for ways to reduce costs without sacrificing performance and production; Gardner Denver continues to build on a history of producing fluid ends that deliver lower cost of ownership and superior performance. That legacy of leadership has led directly to the all-new, next-generation, cost-efficient fluid end: the Gardner Denver VX Fluid End (VX) for hydraulic fracturing pumps. Designed for use with GD-2500Q hydraulic fracturing pumps and similar competitor power ends, the VX provides an economical alternative to the widely used SGWS fluid ends without losing crucial internals like Redline consumables and patented Falcon Technology. With compact sizing and simplified external geometry, the VX gets the job done while weighing 2,000 lbs. less than industry-standard fluid ends — maintaining the performance, longevity and simple installation Gardner Denver’s customers have come to expect.




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PESA President Leslie Beyer and Vice President Government Affairs Tim Tarpley appeared on a special episode of the OIlfield 360 podcast. Pictured with PESA Advisory Board Members Josh Lowrey, CEO, Galtway Enterprises, and David de Roode, Partner and Executive Vice President, Lockton Global Energy & Marine. Download the pocast at



Join the PESA Live! WhatsApp, for information about COVID-19, oil markets and government responses to both in real time from the PESA team:

PESA President Leslie Beyer and Vice President Strategy & Programs Molly Determan interview Clay Williams, Chairman, President & CEO, NOV.

Energy Connection/Q2 2020



Looking Ahead NOV’s Clay Williams Believes New Technology, Great People Give the Oil and Gas Industry a Bright Future By Kristin Hincke, PESA


(OECD) countries. The other half is consumed by the five out of six people that live in non-OECD countries.

He joined Shell in the 1980s when Saudi Arabia similarly flooded the market with crude to drive out higher-cost producers and gain market share. The experience and how the industry handled the situation made an indelible mark on him.

“Like us, the 1.3 billion people in OECD countries want to do what they can to protect our planet,” he said. “But the 6.4 billion people in non-OECD countries are fighting for a better standard of living that requires energy. UN human population growth forecasts call for non-OECD countries to grow by another 1.5 billion people over the next 20 years. If you just hold their per capita consumption of oil constant that adds about 600,000 barrels per day per year required just to maintain standards of living.”

lay Williams, Chairman, President, CEO, National Oilwell Varco, is no stranger to oilfield downturns.

“I spent the first several years of my career in a really tough downturn,” he said. “It dawned on me during this time, the folks that are still here really do care about this industry, and I think that is something pretty special. I’m proud of what this industry does, but it’s a tough industry.” While the industry is facing an unprecedented downturn, Williams believes it has significant growth potential in the future. “The world is going to continue to utilize more oil and gas to lift people out of poverty and improve their standards of living,” he said. “There’s never been an industry that’s had a greater, more positive impact on the standard of living of mankind.” As the cost of capital increases during the downturn, NOV is following the path set by management teams in previous downturns by reducing costs and increasing capital efficiency to drive better returns. Williams believes the rising cost of capital for the services sector is compounded by the narrative surrounding peak oil. He pointed out that nearly half of the world’s 93 million barrels of oil used each day is consumed by the one in six people that live in Organization for Economic Cooperation and Development

Williams acknowledges the servicing and manufacturing sector as being overbuilt, which creates business challenges. As American producers adjust their 2020 budgets and drilling plans, subsectors within oilfield services and equipment will need consolidation. “Generally, industries that have a more consolidated industry structure tend to generate better returns on capital as opposed to industries that are more fragmented,” Williams said, “so structures that are more consolidated tend to be healthier for the long term.” While leadership at NOV has made difficult decisions including workforce reductions to improve financial performance during this downturn, the company is focused on M&A as a strategy to help NOV not just navigate this time, but to be in a position to thrive when the upturn comes. “We’ve continued to do M&A, but we’ve actually gotten more focused on smaller companies where we find we tend to drive higher returns,” Williams explained. “We

Energy Connection/Q2 2020


did a very comprehensive look back at our M&A programs over the years and found that the smaller companies as a sort of portfolio of investments in the aggregate, drive better returns and lower risk and so it’s been a way for us to continue to improve our competitive positioning through the downturn while not exposing the broader company to the risk of an overleveraged balance sheet.” Much of that M&A has focused around acquiring new technologies, which has been the driving force behind the record production increase in unconventional shales over the last 10 years. As someone who has spent his entire career in the U.S., Williams is amazed that America produced the highest oil production growth numbers ever put up by any country in 150 years. He attributes this success to new technologies that led to the advancement in production capabilities. NOV has been a part of the industry’s technological revolution and has deployed several innovations. “We saw the opportunity in the downturn to invest in new technologies that help facilitate those sorts of advancements,” Williams said. One area NOV has pioneered through the downturn is wired drill pipe, which offers high speed bandwidth connection to the bottom of the hole. This pipe works in conjunction with devices near the bit that measure vibration and mechanical energy losses and with artificial intelligence on the rig. This helps optimize the way rigs can drill through different stratigraphic columns. “We’re getting good traction with it,” Williams said. “We launched our new operating system for NOV rigs that we call NOVOS, and we put that on


Energy Connection/Q2 2020

more than 100 rigs, and it’s continuing to drive better efficiencies and better safety in regard to operations.” According to Williams, NOV will introduce new automation and digital products later this year that will improve safety and performance on drilling rigs. He sees digital technologies as the leader in the energy transition evolution.

“Perseverance counts for a lot so stay in the fight, don’t give up, keep moving ahead. And when better days come, and they will, you will look back at this period and realize, you know, that’s really what made me who I am. ”

“It will play a big role in helping the industry get better,” he said. “We have a lot of customers very focused on the energy transition. I think it is an enormous business opportunity for all of us. If you think about energy broadly, it is about infrastructure. It takes enormous amounts of capital and typically decades, if not a century, to pivot from one energy source to another, so I do think mankind will pivot to new sources of energy in the 21st century. And the prize of the 21st century is figuring this out and participating in it.” Williams believes the oil and gas industry is well-suited to lead the pivot in energy sources because servicing

companies are great at deploying sophisticated technologies at scale and executing large complex projects globally. However, innovation is not restricted to just the service and manufacturing sectors. As producers develop their own technologies, companies such as NOV have the challenge of adapting to their customer’s needs. “NOVOS incorporates the ability for our customers to write and deploy apps,” Williams explained. “We have a software developer kit that allows anybody who wants to write an app to work within the NOVOS operating environment to do it. We understand that our customers want to deploy their ideas perhaps in a proprietary way so they can write an app that’s proprietary to them or if it’s a service company, that’s proprietary to their customers, so we’re trying to work within the constraints that our customers really want.” Purposeful innovation and service for all are touchstones at NOV. Investment in research and development, new products and technologies are a primary focus of the company. “Our innovation needs to help our customers continue to improve, but also we’re a service company, and our customers have critical operations or expensive operations, and so we need to be ‘Johnny on the Spot’ when they need us to be. NOV aspires to be a technical leader while maintaining a culture that’s really committed to taking not just good care, but great care of our customers.” Williams believes there are great untold stories about the oil and gas industry’s technological innovations, and he shares information about oil and gas extraction technologies whenever possible.

“This industry does so many great things the people outside the industry have no idea about,” he explained. “I love introducing those who aren’t from the industry to the technologies we employ, the amazing places we go and things that we do. I just can’t say enough, how proud I am of the oil and gas industry. It’s really an amazing thing, amazing people, and I’m just very proud to be a part of it.” Williams sees business as the “ultimate team sport” because it takes different skill sets, points of view and perspectives to be successful. He believes a team with members expressing identical thoughts will fail due to a lack of diverse opinions and perspectives. According to Williams, respect for each other is critical to a successful team because it gives team members the confidence to share opinions and personal views knowing the team respects the feedback, but at the end of the day, each member must

support whatever direction the team is headed. “Having a team that is mature enough to set aside a difference of opinion for the benefit of the team is really the magic ingredient,” he said. Building a successful team takes time, intentional thought and planning according to Williams. He suggests choosing individuals with divergent personalities to have a wide range of opinions. It’s important to recruit a diverse workforce reflecting the generational change underway in the industry while also representing the global nature of the business. “Let me be totally clear, I’m blessed beyond what I deserve. We have, I think, the world’s best management team, and I’m so proud of the people that I’m privileged to work with every day. They’re committed, and they do a fantastic job.”

As recent events in the world show, the oil and gas industry can be a volatile place to be. During hard times, Williams encourages experienced employees to reassure younger employees who may be questioning their career choice. “I tell people, you are going to look back at this downturn and realize this is really what is going to make you as a manager,” he said. “You’ve been pushed out of your comfort zone, you’re being asked to do really hard things, sometimes pretty painful things, but we’re driving towards a more efficient and more effective organization, and you’re a part of that. You’re learning more than you know right now. Perseverance counts for a lot so stay in the fight, don’t give up, keep moving ahead. And when better days come, and they will, you will look back at this period and realize, you know, that’s really what made me who I am.”

Energy Connection/Q2 2020



That Escalated Quickly THE RECENTLY (HEAVILY) REVISED 2020+ ENERGY OUTLOOK By George O’Leary, Managing Director, Oil Service Research Tudor, Pickering, Holt & Co.


t seems that there’s never a dull moment in the oil patch, and 2020 has certainly hammered that reality home. Just as upstream companies appeared to come to terms with the new paradigm that was created by a seemingly interminable ~$50-60/bbl WTI crude oil price world, COVID-19 fears and the OPEC+ train-wreck coalesced to form the perfect storm, thereby sending WTI crude oil price careening down <$30/bbl. At these price levels, full-cycle economics simply don’t work for most global reservoirs. So, what will or should oil companies do now? Our crystal ball is admittedly murky today, but that’s nothing new as our prognostications on the future of oilfield activity, pricing and earnings have felt a bit like the famous “Mr. Toad’s Wild Ride” for much of the last six years. However, we do believe sunnier days sit on the horizon as supply/demand dynamics eventually improve. However, before we peel back the onion with respect to how 2020 and 2021 may unfold, let’s a take a little trip down memory lane.

share of issues through time, but a lack of ingenuity and technological prowess isn’t one of them. Energy companies deployed early learnings from places like the Barnett and Haynesville in oil plays like the Bakken and the Eagle Ford. During most of the 2008-2014 timeframe, times were good in the oil patch as OPEC supported $80-100/bbl+ crude oil prices. As such, capital flooded into the space and companies were generally rewarded for growth above almost all else. But that wouldn’t last forever.

“ We firmly believe

In late 2014 and in a fashion somewhat similar to the recent turmoil, the world got flip-turned upside down as OPEC decided they’d ceded more than enough crude oil production market share and opened up the production taps. We entered a painful multi-year downturn, but most energy players and investors assumed that we’d eventually see a traditional, powerful oil and gas upcycle as global decline curves kicked in. Given these optimistic views, capital markets were accommodating, and investors generally supported the space, which limited the impact on upstream industry participants.

we’re positioned for notably better days in the energy patch over the long term.”

U.S. onshore shale emerged onto the scene as a true potential driver of hydrocarbon production growth in the mid2000s, as oil and gas companies proved that these tight reservoirs could be economically exploited by horizontal drilling coupled with hydraulic fracturing. Our beloved industry certainly has encountered its fair 10

Energy Connection/Q2 2020

We’ve been head-faked multiple times since late 2014, thinking that crude oil prices were set to recover and the energy industry might rebound over a multi-year period, only to have those hopes dashed as oil supply growth exceeding expectations tended to drive lackluster crude price and energy equity performance. By late 2018, investors truly and loudly began to bang the capital discipline,

free cash flow, and return on capital employed drums. And most energy companies seemed willing to dance to the beat with numerous public companies laying out budgets predicated on a $50-55/bbl WTI price. Investors were holding oil and gas companies’ feet to the fire and it seemed to be paying dividends. Energy companies seemed increasingly focused on protecting and improving balance sheets. Capital markets remained circumspect and certain lenders appeared to be playing hardball, so upstream companies increasingly complied with investors’ desires entering 2020. And then, COVID-19 blunted demand expectations and OPEC+ threw the market a nasty curve ball. Historically, when oil prices take a notable tumble, rig count decline takes months to fully respond. Look back to 2016 when WTI crude bottomed in February, U.S. land rig count didn’t trough until a few months later. To be fair, that’s changed a bit since 2017 as operators cut activity quickly multiple times with little, if any, warning afforded to their service providers. While we’ll have to wait and see what the near-term future holds, our discussions with industry participants indicate that the activity brakes have already been slammed and completions was first up on the chopping blocks. During Q2 2020, we expect sharp activity declines to more fully materialize. Among integrated players, large independents, and both small public and private operators, nearly all seem to be rapidly throttling back activity. In some instances, lenders are essentially forcing them to do so. Drilling rigs will also be let go despite the early termination payments that E&Ps will invariably owe the land rig companies. Production-oriented activities often hold up better than drilling and completions-oriented revenue streams in a down-cycle, but it appears that even workover-oriented services are in E&P companies’ crosshairs. So how low do we think U.S. onshore upstream spending will trend in 2020? Coming into the year, we forecasted E&P drilling and completions (D&C) spend would decline ~13% year over year in 2020. As COVID-19 fears mounted, we began to mull over what D&C spend might look like in a prolonged ~$45/bbl WTI crude oil price world vs. the $50-55/bbl price environment we’d previously contemplated. We believed that D&C spending would decline a startling ~20-30% year over year in 2020. With crude oil prices cratering, we’ve seen E&P operators announce more draconian spending plans than we previously anticipated. Some companies are now willing to let production decline in 2020 rather than trying to toe

the production growth line. This is not true of all E&Ps, as certain companies with the combo of fantastic rock and strong balance sheets can weather the storm better than others. However, deep spending cuts are the rule versus the exception and when coupled with our own macro modeling, they suggest that U.S. onshore D&C capex could decline ~40% year over year ... maybe more. As such, we now believe U.S. land rig count could fall to 400-450 by 2021 vs. current level of ~770, with active hydraulic fracturing spread count potentially hitting ~130-150 in 2021 vs. current level of ~280-285. This year will be quite painful for U.S. onshore OFS players. That all seems quite gloomy, so where’s the ray of sunshine promised earlier in this article? While we’re still working through the nuts and bolts of our updated energy macro outlook, it appears that we’re set up for the heretofore resilient U.S. crude oil production to decline on an exit-to-exit basis by Q4 2020, and we expect annual crude oil production declines year-over-year in 2021. Assuming global crude oil demand normalizes in 2021, we could finally see the much-awaited sustained crude oil price recovery materialize. We believe the fundamental death of oil demand growth has been prematurely and incorrectly called. Outside of OPEC-driven noise, U.S. unconventional production growth has been the primary oil price bugaboo since 2014, but we may finally have reached a point where E&Ps no longer chase growth and upstream players focus more acutely on generating real returns. It’s always darkest before the dawn and things feel pitch-black at the moment, but we firmly believe we’re positioned for notably better days in the energy patch over the long-term. .................................................................................................... George O’Leary currently serves as a Managing Director in Oil Service Research. During his 10+ year tenure at Tudor, Pickering, Holt & Co. (TPH), George has covered the midstream, coal, power, engineering and construction, and liquefied natural gas components of the energy space. Prior to joining TPH in 2009, George served as an Associate in the business and intangible asset valuation group with Deloitte Financial Advisory Services, where he primarily focused on valuing assets in the energy space. He holds a bachelor’s degree in business administration with a concentration in finance from the University of Richmond. Energy Connection/Q2 2020



Energy Connection/Q2 2020




ringing the OFS sector together and providing members with information, resources and training needed to grow and innovate is at the heart of PESA’s missions. When the pandemic made social distancing and remote work became the norm, PESA remained focused on the mission by hosting an array of webinars, online townhalls and virtual meetings. Through PESA Remote Events, members have heard from experts inside and outside the OFS sector and received timely information on federal, state and local government orders, how to access government programs intended to help stabilize businesses during the downturn, and how to navigate impacts of COVID-19. Key takeaways from PESA Remote Events conducted in recent weeks:

GLOBAL CRISIS BRIEFING By Axios Reporter Amy Harder President Trump views the oil industry through a consumer lens, which means he sees low gas prices at the pump as a plus in the economic recovery. When the Middle East feels effects of the price war and supply glut, the region could see increased unrest and more terrorist activity. •

Declining greenhouse gas emissions are akin to losing weight because of an illness. Harder predicted emissions •

will increase globally in the pandemic’s aftermath. Climate change will take a back seat to economic recovery in the coming years. •

MARKET OUTLOOK By the Baker Institute’s Mark Finley Finley advised executives to monitor official pricing and real-time estimates of production and inventory data. •

As long as existing wells can cover operating costs, they’ll remain in production. •

U.S. shale producers are under increased financial and productivity pressure due to cost of extraction and debt. •

IMPACTS OF SAUDI PRICE WAR AND THE CORONAVIRUS SHUTDOWN By King and Spalding A key indicator to watch for is refineries declining new crude oil deliveries. That will have a bigger impact on the supply chain than WTI price. •

The current economic downturn is caused by a demand shock (not a liquidity crisis as was the case in 2008) and calls for a different response from the federal government. The largest stimulus package in U.S. history was a good first step from lawmakers. •

Companies should immediately review force majeure clauses in their contracts. Because the financial crisis •

Energy Connection/Q2 2020


and falling oil prices may not meet the requirements for triggering force majeure clauses, companies should consider how performance could be altered to comply with COVID-19 orders and keep the contract in effect. Companies have many restructuring options ranging from delaying payments, to strategic mergers and acquisitions to filing for reorganization. The earlier companies begin the process, the more options they have.

HUMAN RESOURCES HR departments are facing unprecedented challenges due to the pandemic. PESA’s HR Committee addressed stay-at-home orders, leave, work exemptions and market challenges. •

Many companies have been forced to implement layoffs and furloughs. •

Connectivity is a difficulty companies are facing. Some have added licenses to strengthen services, but several are challenged by employees working from rural areas. The only option in those cases has been for employees in rural locations to call in for meetings. •

SUPPLY CHAIN The PESA Supply Chain Committee shared best practices for supply chain mapping and how to use that resource to communicate internally and externally to manage around regional effects of the pandemic. •

Attendees discussed how they’re implementing remote work options and managing worker health and safety when reporting to company facilities is required. Practices include multiple teams with no overlapping members, stringent adherence to distancing and protective guidelines, and use of remote communications tools. •

HEALTH & SAFETY PESA Health and Safety Committee members shared HSEQ programs, processes and procedures. Companies are setting up emergency response teams to handle contingency planning and responses to COVID-19 to allow frontline employees to focus on operations. •

Companies are using digital questionnaires and temperature checks to screen employees for the virus before each shift. •

Companies are keeping in place remote work and rotation scheduling strategies. For essential staff that cannot work from home, companies are meeting and surpassing CDC guidelines for cleaning and sanitation. In addition, facilities are performing temperature checks, maintaining enhanced social distancing and establishing staggered work shifts to reduce employee interactions. •

Most companies are prohibiting external visitors at facilities and requiring face masks for those entering. Many HSE departments are determining procurement needs to supply the PPE and are re-tasking 3-D printers to make the necessary equipment. •

Companies are covering 100% of the cost for virus testing. •

LEADERSHIP The Envision Group led a discussion on best practices for leading through adversity. •

Keys include: communication with employees – including video calls, follow-through on commitments, and maintaining physical and emotional health. •

Companies have taken an array of steps to protect workers, including restricting international travel, limiting domestic travel to one person per vehicle, rotational schedules and complying with CDC facemask recommendations. •

Open communication with employees is critical. Companies are using video podcasts, email and newsletters to keep employees up to date and to reassure them their health and safety are a top priority. •


Energy Connection/Q2 2020

Leaders should identify team members who handle stressful situations well and put them in positions to help fellow employees and have input to help make good decisions. •

Verify data when making a decision to avoid mistakes.

Tailor messaging to different stakeholders.

LEGAL Companies need to implement an array of best practices to avoid potential legal issues related to COVID-19. •

Among these: have employees work from home when possible. Conduct health screenings before essential employees enter company facilities. Increase cleaning requirements and make proper PPE available to workers. •

follow if a co-worker tests positive. Consider what steps the company will take if the pandemic (or another crisis) lasts for months or years. Pandemic language must be included in force majeure clauses going forward. Force majeure clauses should be specific about what events may trigger the clause. •

Project managers and key employees should receive crisis management training. •

Exemption letters for essential workers should be from the employee’s supervisor, should include that person’s contact information and should include the employee ID number that matches their physical ID. •

Establish and maintain a crisis management team.

Establish policies and procedures for employees to

These are some of the key takeaways from PESA Remote Events since the pandemic disrupted how we work and live. To stay up to date on resources to navigate the COVID-19 pandemic or to join future PESA Remote Events, visit

6795 Corporation Parkway, Suite 200, Fort Worth, TX 76126

Permian– 432.687.1222

Eagleford – 210.529.0816

North East – 724.993.7469


PESA Recommendations for OFS & COVID-19

PESA’s HSEQ Task Force has identified these best practices during the pandemic. SOCIAL DISTANCING PROTOCOLS


• Implement a controls questionnaire to assess personal health and travel history

• Implement wellness check questionnaires and temperature checks

• Implement rig site checklists into company standards/requirements and have open dialogue with customers

• Maintain data privacy controls, adhere to corporate compliance

• Stagger shifts to reduce traffic coming in and out at one time • Provide field crew workers with screening questions for customers regarding controls in place to manage social distancing, safety meetings, hygiene precautions, quarantine areas, etc. • Utilize infrared thermometers to take temperatures • Follow CDC guidelines regarding masks. When availability is short, employees should secure or make their own following instructions from the CDC • Install partitions and/or sneeze guards in manufacturing facilities • Ensure social distancing can be observed in cafeterias – purchase tables for outside dining or additional seating areas

• Refer employees reporting COVID-19 symptoms to personal physician • Return to work: When employees return to work after having been symptomatic, they should meet 3 criteria based on CDC recommendations: o 72-hour fever free without medication o Improvement in respiratory symptoms (e.g., cough, shortness of breath) o At least 7 days have passed since symptoms first appeared

REMOTE WORKER TRAVEL • Discontinue international travel • Limit one employee per vehicle for domestic travel

DECONTAMINATION • Increase cleaning protocols • Decontaminate service vehicles between shifts • Wash laundry at warmest settings following CDC guidelines • Do not share PPE, regularly clean face shields/hard hats • Add list of vendors/waste disposal companies who can provide cleaning services to emergency response plan 16

Energy Connection/Q2 2020

• Travel between states: Carry essential worker documentation • Be aware of longer rotations and the health, safety and psychological effects • Hot shot drivers: should remain in their vehicles and not enter facilities • Hotel Stays o Employees having to stay at hotels employees should be prepared to sanitize rooms and request clean linens from the front desk o Employees are encouraged to wash their hands immediately after riding elevators.


COMMUNICATIONS • Create internal COVID-19 websites • Internal with company leadership to share what the organization is doing to keep employees safe and maintain business continuity • Provide FAQs for all employees, specific FAQs for managers, as well as customer-facing service groups • Daily newsletters providing information COVID-19, as well as how to cope with “new normal” stress, working remotely, home schooling, managing time, not being able to socialize • Communicate often with customers

• Utilize medical management solutions to: o Assist in company plans o Provide recommendations around quarantine o Locate doctors in the immediate area o Get tests done with results back quickly

RESPONSE PLANNING • Streamline through Human Resources to ensure confidentiality • Bring completed preparedness plan to job sites reflecting local/regional HR and HSE contact information • Global status updates funneled through HR

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ESG Resources ESG COMMITTEE CREATES TOOLKIT FOR MEMBERS By Valerie Banner, Senior Vice President, General Counsel and Corporate Secretary, Exterran Corporation Jock Pool, Chief Compliance Officer, Oceaneering


inancial performance of any business is foremost in the mind of its leaders. Increasingly, data is reflecting that environmental, social and governance (ESG) actions taken by a company affect long-term financial performance and must be included in a strategy for long-term value creation. ESG factors measure the impact of a company’s sustainability and ethical practices. They include carbon emissions and climate change, water use or conservation efforts, anti-corruption, talent and human rights policies and processes, board diversity and skills, and others. Socially conscious investors use ESG criteria to screen potential investments, and more recently, regulators are considering requiring maintenance and disclosure of ESG-related data. The majority of large-cap publicly traded companies now publish sustainability reports, which include information about their ESG initiatives and metrics. With increasing pressure from Wall Street and private equity, many companies are looking for guidance in creating an effective ESG program. The PESA ESG Committee, recognizing the need to assist Member Companies in establishing such programs, has developed an ESG toolkit. This resource includes information about ESG, why a program is needed, how a company can address these issues, and the best method for collecting and disseminating a company’s ESG initiatives and metrics. Obtaining support from upper management and functional department heads is critical to establishing an ESG program, as ESG information and initiatives reside across several functions. Understanding the impact of a company’s sustainability, social and ethical practices on its business and operations, and financial performance, is important so this information can be spread through the company and incorporated into its strategy, programs and processes. A company should also consider developing a corporate


Energy Connection/Q2 2020

ESG-related mission statement. Reviewing investor position statements and voting guidelines, as well as proxy statements and sustainability reports of companies in the same sector, will provide a wealth of information to assist in determining ESG priorities. Gathering information from departments such as HSSE, HR, IR and Corporate Secretary on existing ESG-related activities and metrics is another necessary early step. Keep in mind, most ESG rating agencies will give credit only for what is publicly available, so preparing and posting an ESG webpage or short sustainability report (or if a public company, including information in the proxy) enables a company to take immediate credit for what it is already doing well. There are many good industry sector ESG webpages and sustainability reports to use as examples. Once current internal ESG-related practices, information and metrics are gathered and before disclosing publicly, ESG information contained in the webpage, sustainability report, proxy, IR deck and engagement deck should be checked for accuracy and consistency. Keep most disclosures aspirational and general, unless you can confirm (and possibly audit) specific data. Once disclosed, review and update ESG disclosures at least annually. After a company determines what information already exists, it will be easier to determine what additional data and information is needed, and what processes should be implemented to obtain it. Company activities considered by rating agencies will help companies identify the information and data that should be tracked and maintained. This is typically a long process, and investors do not expect a company to meet all reporting standards. Rather, evaluate what information and data makes sense and can be obtained cost-efficiently. For example, consider adopting an ESG-compliant supplier code of conduct, and make sure supplier contracts require compliance. Begin collecting easily obtained data, such as electric, gas and water invoices for each facility, so that usage can be tracked.

It’s important to regularly review the company’s ESG program and activities with senior management and board. Also, ratings firms often make mistakes in gathering and reporting data, so reports issued by these firms should be regularly reviewed and corrected as needed. A short sustainability report or more robust webpage should be a goal, but only after a program is in place, the suggested steps have been taken and additional information and data is obtained. Reviewing sustainability reports of others in the sector prior to preparing a short report is essential and, per recommendations from large institutional investor publications, applicable SASB standards should be reviewed and used in preparing the report. In addition to ESG reporting, implementing a limited stakeholder engagement program should also be considered. This includes reaching out to the company’s largest shareholders, pertinent ESG rating entities and other key stakeholders, outside of proxy season for a possible

engagement call. Keep in mind financial firms such as JP Morgan Chase, Wells Fargo, and Goldman Sachs publish annual reports that review their ESG approaches. Taking a lead from these reports can help ensure your report is robust and pertinent. ...................................................................................................... Valerie Banner serves as Senior Vice President, General Counsel and Corporate Secretary of Exterran Corporation, a global energy process and systems company. Ms. Banner has more than 35 years of global experience, including numerous years in executive management positions driving strategy, growth, risk management, governance, compliance and legal matters. She is the co-chair of the PESA ESG Committee. Jock Pool is the Chief Compliance Officer at Oceaneering, where he is responsible for the global ethics and compliance program. His career has included positions in governance, risk, audit and process improvement. Previously he worked for the UK’s BG-Group, where he had overall governance and risk responsibilities. He also was a risk management consultant for Deloitte, LLP. He is a military veteran and currently serves as co-chair of the PESA ESG Committee. Energy Connection/Q2 2020



Scrap Solutions A METAL RECYCLER’S PERSPECTIVE ON UNLOCKING VALUE By Trey Lipsitz, Manager, Market Street Recycling


crap metal recycling within the oil and gas industry has never been a popular subject.

Companies have their horror stories and managers often cringe at the mere mention of scrap. As a metal recycler, I get it: scrap metal is not your main business; it’s a by-product and a headache to manage. Regardless, scrap metal is a valuable line item and, in challenging markets – like the present one – becomes even more so. From my experience, many businesses find themselves a bit in the dark on scrap values and lack the time to invest in overseeing the recycling process to its full potential. While often overlooked, a well-run scrap program can serve as a beneficial and profitable complement to your oil and gas business. It’s 20

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important to be in-the-know regarding the scrap market today, both globally and domestically. As with any other commodities, understanding past trends, current market impacts, and future predictions helps manage expectations and set the stage for proper planning and decision making. In 2019, the metal commodity market suffered the perfect storm of events. Trade war issues and China’s Green Fence Plan were largely responsible for the downturn at the outset of the year, there was hope for a potential rebound in 2020. With the passage of the United States-Mexico-Canada Agreement (USMCA) and China’s reclassification of scrap grades, it appeared – at least initially – that the metal market would get the shot in the arm it so desperately

needed. Investor sentiment was high in the early months based on what appeared to be gains on the Dow Jones, record low unemployment, and multiple rate reductions from the Federal Reserve.

improved and can support the higher side of pricing seen in 2019.” The International Nickel Study Group (Lisbon) also forecasted another global supply deficit, which could elevate pricing.

Still, expectations were tempered as economists feared more trade wars, softer manufacturing readings, and rising geopolitical factors Scrap dealer surveys revealed slower export orders, expanding inventories, and rising input costs, all of which were indicative of a more ominous outlook. The picture for 2020 was further complicated by the surplus of scrap metal left over from 2019 and trade barriers. However, no one could possibly have predicted the events that have since come to pass. With the outbreak of COVID-19 and the collapse of oil, the picture has become immensely more complicated.

Keeping the basic overview of the market in mind, we can now turn to developing a scrap program customized to your particular oil and gas business:

With respect to specific metal classes impacting the oil and gas industry, the 2020 outlook was originally predicted as follows. Admittedly, current events have impacted the reliability of these predictions, but they are nevertheless helpful to provide a big-picture perspective and highlight problem areas: IRON AND STEEL: Pre-COVID-19, the World Steel Association (Brussels) estimated that the Chinese demand for iron and steel would increase by 1% and worldwide by 2.5%. The resulting global demand in 2020 was predicted to be 1.7%, which was down from 3.9% in 2019. But, with the finalization of the USMCA and improvement in U.S.-China relations, additional growth was previously expected. Also, with better ferrous scrap trade flow, and the domestic capacity expansion plans announced by Nucor and U.S. Steel, there was the potential for growth similar to that experienced in 2019. ALUMINUM: As in 2019, aluminum prices were already struggling to maintain value with the primary metals even before the pandemic. Other complicating market factors included the low valuation of automobile scrap, competition from imported aluminum, weaker aluminum demand, and the potential of primary aluminum flooding the market. Without a sharp rebound in demand, forecasters were concerned that the expansion of aluminum capacity would be limited. Those concerns are likely greater now. NICKEL AND STAINLESS STEEL: The prices for nickel and stainless steel were extremely volatile in 2019 with a low of $10,530 per ton to a high of $18,850 per ton. Despite this volatility, nickel outperformed the other base metals by 32%. Given the roller coaster of in 2019, there was and continues to be lingering uncertainty for 2020. However, Fastmarkets Metal Bulletin reported early on in 2020 that “London Metal Exchange nickel’s fundamentals have

KNOW YOUR SCRAP: Conduct a walk-thru with your employees and your scrap metal recycler to document all grades of scrap produced, volumes and the equipment needed to handle your scrap. MAXIMIZE VALUE: Work with your metal recycler and ask questions. Knowing the grades of your scrap is important, but understanding the sorting and labor cost associated with your scrap is key. Decide if it makes sense for you to sort on the front end or let your recycler handle it. The less a recycler has to handle your scrap, the more they should be able to pay you in return. ACCOUNTING AND INVENTORY: Knowing your scrap history and trends allows you to monitor your scrap for inconsistencies. Also, require accurate accounting from your recycler on all grades, weights, and pricing. Discuss payment terms best suited for your company, so that paperwork is seamless with your accounting department. PRICING: Do your homework. There are many published resources available that keep track of scrap metal pricing. Your recycler can suggest the correct reference for your scrap metal class. COMPREHENSIVE SERVICE PLAN: Pricing is important, but customer service will make your life easier. Have your recycler create a formal plan in writing that incorporates all business needs including your equipment needs, logistics, turnaround time and payment terms. There are always opportunities to lower overhead and reduce redundancy. Implementing these steps will help your business achieve a successful scrap metal recycling program and ultimately add to your bottom line. ...................................................................................................... Trey Lipsitz is 4th generation in his family’s Texas-based business, M. Lipsitz & Co. which was established in 1895. He currently works at their Market Street Recycling location in Houston, TX.

Energy Connection/Q2 2020


THE ESG ISSUE/Sustainability

Green Chemistry HOW TO IMPROVE OILFIELD OPERATIONS WITHOUT SACRIFICING SUSTAINABILITY By Martin Shumway, PE, CPG, Technical Director, Locus Bio-Energy Solutions


inston Churchill once said the allies floated to victory on a sea of oil during the first world war. But now the oil industry is fighting its own war against a multitude of challenges. Employment is declining. Operators are doing what they can to survive while pressure builds from investors and shareholders to operate within cashflow and achieve returns on investment. There is also pressure to increase sustainability and implement ESG criteria across operations. It can feel like an impossible feat in such a volatile market. So, what can be done to remain competitive in the oilfield? The answer may surprise you. CUTTING COSTS WITH BIOSURFACTANTS Operators across top U.S. basins are finding success using new oilfield technology that incorporates green biosurfactants – both in financial and environmental benefits. Biosurfactants are a special class of surfactants that offer lower toxicity and higher biodegradability. The solutions are replacing standard synthetic petrochemical-based surfactants in oilfield applications at a fraction of the cost by reducing dosage rate, improving oil production, reducing expenses and minimizing the need for new drilling – acting as a minimal capex method to improving top and bottom lines. Biosurfactants offer a green solution that beats traditional chemical surfactants in performance, cost and sustainability – allowing operators to increase production revenue while also excelling in ESG compliance. In addition to their green profile, biosurfactants are highly effective as excellent wetting agents and have low critical micelle concentrations (minimum effective dosage rates), which reduce surface and interfacial tensions to extremely low levels. They have been shown to reduce surface tension of water to below 35 mN/m, at doses 1/50th of chemical surfactants, are fast-acting, and offer sustained performance. The advantages of biosurfactants come from their multiple


Energy Connection/Q2 2020

action mechanisms, including reducing crude oil viscosity, dispersing blockages and changing interfacial tensions and oil/water contact angles. These mechanisms increase effective permeability and mobilize oil that would not be produced in the primary production phase, ultimately increasing production. Biosurfactant-based products have been shown to be effective in paraffin dispersion, completions chemistries and for enhanced oil recovery applications. Biosurfactants are one of the most promising opportunities in green oilfield chemistry, but historically commercial use has been limited to personal care and other high-margin markets. ADVANCEMENTS IN TECHNOLOGY So how do these new technology advancements enable the large-scale production of biosurfactants? Unlike previous techniques, the new manufacturing technology enables creation of complex organic molecules that cannot be synthesized by traditional synthetic chemical methods. This method eliminates traditional biosurfactant recovery and purification stages, replacing them with bioinformatics and biotechnological fermentation processes that rapidly create pure and homogenous biosurfactants. The process starts by identifying non-bacterial microorganisms with the appropriate gene clusters that can produce high yields of the most effective biosurfactants. Then, proprietary modular fermentation systems are used to customize small, highly concentrated batches of the biosurfactants at up to 100x the density of other products and at as little as 10% of standard production costs, lowering usage rates and treatment pricing. The technology also allows treatments to be customized for different reservoirs and blended at regional locations, ensuring consistent results. RESULTS FROM THE OILFIELD This new generation of biosurfactants offers alternatives

to miscible gas injection with higher unconventional EOR efficiency, better flow assurance and low capex. The biosurfactant solutions are injected at low dosage rates into the reservoir in a controlled cyclic imbibition, where the biosurfactant solution is pumped into the well, allowed to soak for 4-24 hours and then allowed to flow back. The action of the biosurfactant mobilizes otherwise immobile oil. Conventional tight sand reservoirs and unconventional shale wells treated in the Permian and Appalachian basins have shown sustained oil production increases of more than 45% in 90% of the treated wells, together with the elimination of flow assurance problems such as paraffin deposition.

solutions that balance performance, environmental risks and requirements for cost reduction. With the introduction of biosurfactant solutions, the industry no longer has to choose between environmentally-friendly and effectiveness. Sustainability can now be the norm rather than the alternative. The future of the oil industry is reliant on innovative technologies that can meet the growing demands of oil production and recovery. In a time when every dollar counts, using biosurfactant treatments can offer a sustainable solution to maintaining financial stability without sacrificing ESG advantages. ....................................................................................................

Biosurfactant-based paraffin dispersal formulations for flow assurance have eliminated or minimized the use of BTEX solvents and other synthetic chemicals for several operators, while offering production increases attributed to near wellbore wettability changes and increases in effective permeability from cyclic applications. DOING MORE WITH LESS In today’s lower-price environment, the industry’s focus has turned to the total cost of operations and the need to function within operational cashflows. Flow assurance and production enhancement formulations aim to provide

Martin is a licensed Professional Engineer (PE.72266), Certified Petroleum Geologist (CPG #6025) through AAPG and an industry speaker with more than 20+ years of experience in the mining and petroleum industries. He currently oversees all Northeastern operations for the award-winning biosurfactant company, Locus Bio-Energy Solutions. He earned both his Bachelor’s and Master’s degrees in Engineering from The Ohio State University.


Grade T-607 nitrile formulated by Victaulic to meet strict oil industry standards API-607


THE ESG ISSUE/Trafficking

Human Rights OIL & GAS EMPOWERS FREEDOM By Rebecca Stephen, Western Hemisphere Communications Specialist, Seadrill

uman trafficking is a global issue estimated to impact 25-40 million people annually. It’s a human rights issue hidden in plain sight. It occurs across all 50 states in the U.S., with Texas being a hub.


are undocumented citizens, when in reality most victims are American citizens. The second is people often don’t understand that prostitution in most cases is actually sex trafficking, and victims do not choose that life. There is a huge use of force, coercion and fraud regarding prostitution.”

Two energy professionals are taking a stand. In 2017, Alexandria Alvarez Gerbasi, OVS Group, and Jennifer Hohman, Seadrill, started the Oil and Gas Trafficking Awareness Group (OGTAG) to raise awareness about trafficking and inform energy companies on how to take action.

Human trafficking is organized crime and traffickers often target children online, isolating them from their families and luring them into trafficking.

OGTAG began with just two companies and now represents 20 oil and gas operators and more than 25 oilfield service companies. OGTAG has partnered with 40 different non-profits, as well as law enforcement and government agencies, to educate industry and communities of the realities of labor and sex trafficking. OGTAG seeks to use the power of the oil and gas sector to shine a light on this dark issue and make the communities where we live and work safer. By educating our employees and suppliers about this epidemic, we are also helping make progress towards ending a major social problem facing the world today. In January, National Human Trafficking Awareness Month, OGTAG completed Energy Empowers Freedom Tour, a weeklong event hosted by 19 different oil companies around Houston. The event included educational sessions with local non-profits fighting on the frontlines, as well as tours of the Freedom Driver’s Project, a mobile museum that educates the public about the realities of trafficking. More than 1,500 energy employees attended this inaugural event. Energy professionals are now volunteering with these non-profits and making a difference locally\. “There are several misconceptions regarding sex trafficking,” Gerbasi said. “The first is that many of the victims 24

Energy Connection/Q2 2020

“The most important thing you can do to protect your family is have a conversation about it,” Hohman said. “Awareness and education are the greatest tools for prevention.” OGTAG suggests parents vist, which gives six signs to look for if parents are afraid their child is being groomed by a trafficker. OGTAG’s goal for 2020 is to continue increasing awareness and action in the industry around this issue. OGTAG plans to attend the World Petroleum Congress to continue educating oil and gas professionals about this human rights issue and increase awareness about trafficking locally and globally. OGTAG Denver will launch later this year and Energy Empowers Freedom – Permian Basin is planned for October 2020. With the progress OGTAG has made over the last three years, our industry is stepping up to fight for human rights. To get involved, visit

.................................................................................................... Rebecca Stephen is a Western Hemisphere Communications Specialist for Seadrill, an offshore drilling contractor. She has been in the oil and gas field for four years and has been dedicated to OGTAG’s mission since 2019.

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Resilience & Upskilling By Kevin Broom, PESA


very business has a plan. It’s constructed with care, calculation and deep thought. And then a pandemic breaks out during a price war between oil production giants, and companies are suddenly forced to ask, what will we do when the plan doesn’t apply? The current crisis has created a situation that emphasizes the need for businesses to focus on reinforcing a resilient company culture and investing in helping employees upskill to be prepared for the aftermath. At its core, resilience is about the ability to create new plans and continue working even when business goes in directions we didn’t expect or anticipate. Companies that succeed through a major upheaval such as what’s happening now are ones that have people who can think on their feet, adapt to changing circumstances and quickly acquire the news skills required for the new environment. Fortunately, research shows that resilience is a skill, not a personality trait. Like any skill, individuals can develop it with time and intentional thought and practice. What makes a person resilient, according to “Psychology Today,” are optimism, the ability to regulate emotions and the ability to see failure as a form of feedback. Think Thomas Edison’s famous quote, “I have not failed. I’ve just found ten thousand ways that won’t work.” Psychologists believe that resilience is an ordinary skill – one that anyone can learn and develop with time, training and effort. While many companies have invested in helping employees upskill to transition to digital technologies, helping valued workers build resilience is critical for navigating a crisis. There are four core components where companies can help their teams become more resilient. CONNECTION

Experts recommend prioritizing relationships and fostering an empathetic and understanding work environment. Team members should feel they’re not alone in the struggle to adapt or in their emotional responses to stress. 26

Energy Connection/Q2 2020

Managers can help create a positive environment by being trustworthy and compassionate. WELLNESS Encourage team members to take care of their minds and bodies. Ideally, healthy living is the norm, but it’s more important than ever during a crisis. Eat well, engage in mindfulness activities such as journaling, yoga or meditation, recall things for which you’re grateful, and avoid negative behaviors such as drugs and alcohol. HEALTHY THINKING Especially during a crisis, it’s important for leaders and team members to be conscious of how they’re thinking. Specifically, psychologists recommend identifying irrational thought patterns and cognitive biases such as a tendency to catastrophize. A diverse team could have advantages in this area because of different ways of approaching issues and challenges. Other keys include accepting circumstances that are beyond the team’s control to enable greater focus on things that can be altered, maintaining a hopeful attitude, and learning from the past. Change is a normal part of life – even extraordinary events – and reminding each other of past difficulties can help the team find the strength to expect good things to happen. MEANING AND PURPOSE Among the bigger hazards during a crisis are the loss of hope and feelings of helplessness. A key to maintaining motivation through difficulties is infusing the day-to-day tasks with an overarching resolve giving the work purpose. Meaningful work inspires passion, which fuels the team to be proactive about setting goals and taking steps toward achieving them. A good question for a leader to put to herself and her team is, “What’s one thing we can accomplish today that helps us move in the direction we need to go?” For an OFS company, the purpose could be something like, “Our mission is to provide the world with the energy it needs to overcome the pandemic and fuel the economic recovery.” This mission contextualizes the day-to-day

struggles within a broader quest to help people and can sustain team members through difficult days and weeks. If resilience isn’t something you’ve thought much about, it’s not too late. COVID-19 and the oil price wars are significant threats that also present opportunities for companies to upskill their teams. An overnight rise in remote working and a drastic curtailing of in-person contact has required an on-the-fly revamp of how we work. This is where reskilling and upskilling become foundational for individuals and businesses. Reskilling is to learn new things that are outside our usual area of expertise. Upskilling is to refresh our current knowledge and skills to strengthen them and perhaps use them in new and different ways. At a time when companies are urgently engaged in an existential struggle, it may seem like there isn’t time for developing and upgrading worker skills. It might be critical to surviving the crisis and launching into a more prosperous future, however.

First, social distancing is causing a revolution in work processes. So many people are working from home that companies are getting creative in implementing mobile applications to keep teams connected and productive. Helping employees acquire new skills and adapt to change is a wise investment of time and money. Second, reskilling and upskilling helps us maintain productivity. Being unable to see colleagues and supervisors could lead to struggles with communication and motivation. Challenging employees to develop skills, maintain contact and support each other can help overcome distractions and the tendency to procrastinate. Third, an investment in reskilling and upskilling is not a short-term thing. Knowledge and new expertise acquired during a crisis will remain part of the team in the future and could help push the company to new heights once the crisis has passed. The key for leading your company in becoming more resilient and focused on reskilling and upskilling is to get started.

The Value of Automating the Rig Floor By Robert Thibodeaux, P.E., Director, Casing Products & Services and Jeremy Angelle, Vice President, Products & Services, Frank’s International


he introduction of new technology is informative and exciting, and it must prove value. While value can be measured in many ways, ultimately it is measured in currency. With recent pressures on commodity pricing and the strong desire to ensure worker health and safety, the oil and gas industry is increasingly receptive to new digital and robotic technologies that can reduce personnel on the rig floor and automate repetitive processes. Historically, oil and gas has lagged other industries in


Energy Connection/Q2 2020

adopting new technologies. While other industries have advanced their capabilities to automate repetitive tasks, and increased efficiency, safety and reliability, certain aspects of the oil and gas industry such as tubular handling have been reluctant to follow suit. New technologies in the oil and gas industry have been adopted based on absolute need or regulatory requirement, instead of being part of an optimization or improvement strategy. Often, the reluctance to adopt new technologies has to do with not understanding the value that the technology delivers to the end customer. Operators are typically focused on the job at hand and have little time to learn the benefits

of a new technology. This puts the burden of proof on the service company to demonstrate its economic benefits.

and produces consistent, highly repeatable results, adds additional value.

The primary task in automating the drill floor is to improve pipe handling by optimizing safety, efficiency, reliability and well integrity. Technology currently exists in industries outside of oil and gas that can be modified and applied to mechanize and automate the drill floor, accomplishing the same tasks that humans perform.

Process improvement for pipe handling operations across the drilling sector of the oil and gas industry is a key element to drive down the cost of wells, ensuring sustainability within the industry. The adoption of intelligent equipment such as Frank’s one button push, automated iTONG, combined with the iCAM system, a recently introduced advanced automated tubular connection analysis technology, can aid with these process improvements.

While safety is an expectation, will automating a repetitive task, given the investment required, result in an increase in efficiency, reliability, and well integrity that shows positive financial gains? The short answer is yes. In order to prove this, a model must be developed that properly quantifies value added for any given technology. This model should include these four primary tenets: SAFETY: No harm to people. As an industry, significant improvements have been made to keep people safe, and technologies that further reduce harm to people naturally add value. Proof of value lies in the reduction of TRIR and LTRIR, both of which have direct and indirect costs. Reducing incident rates shows the underlying value of a technology responsible for that reduction. Also, removal of personnel from certain operations on the rig floor reduces exposure to hazards, further contributing to a reduced incident rate, while also reducing the direct cost of those operations. WELL INTEGRITY: Application of technology to prevent the unplanned release of hydrocarbons throughout the life of the well. The evaluation of handling and installation processes and the reduction in human error through decision-making improves confidence in well integrity and brings value into the well construction process. Introducing technologies that increase well integrity and connection integrity contributes to the reduction in costs associated with remediation efforts enacted when a well has been compromised. EFFICIENCY: Arguably the most recognized tenet of automation is the ability to safely speed up the handling and installation process. However, this benefit has often been difficult to quantify as the industry has typically focused performing a task, or solving a specific problem, rather than improving or optimizing a process. A renewed focus on efficiency has emerged with lower commodity pricing and the goal to remain profitable in the existing cost environment. RELIABILITY: The ability to produce consistent results adds value. A process that is optimized and automated,

iTONG and iCAM speak directly to each of the core tenets of value creation. Automating the connection process using iTong removes personnel from the rig, decreasing risk exposure thus increasing safety. Additionally, automated processes can improve efficiencies by allowing simultaneous operations that are not possible with equipment controlled by humans, with a potential 50% time reduction (depending on current levels of automation). Automating the graph evaluation process with the iCAM technology transfers the decision-making requirement from the technician to the computer. This can not only speed up the process of installation but decrease or eliminate mistakes in the evaluation process, improving efficiency and well integrity. Finally, the variation in cycle time typically seen with human-controlled equipment is eliminated through the implementation of these automated sequences, vastly improving repeatability of the process. The iTONG and iCAM technologies are just two examples of the value that automated solutions can provide to the tubular handling process. The accelerated adoption of these technologies and other intelligent systems can contribute significantly to lowering costs to maintain profitability at lower commodity prices. .................................................................................................... Jeremy Angelle currently serves as Vice President, Products and Services for Frank’s International. For over 19 years, Mr. Angelle has held various positions of increasing responsibility with Frank’s International. Mr. Angelle received his Bachelor of Science degree in Mechanical Engineering, Master of Science degree in Mechanical Engineering, and a Master’s in Business Administration degree, all from the University of Louisiana at Lafayette, and is a registered professional engineer with the state of Louisiana. Robert Thibodeaux earned a bachelor’s degree in Mechanical Engineering and a master’s degree in Business Administration from the University of Louisiana at Lafayette. Mr. Thibodeaux joined Frank’s International in 2000 and has held positions of increasing responsibility in engineering design, operations support and most recently as Vice President of Technology Development. Energy Connection/Q2 2020



2020-21 Board of Directors The Petroleum Equipment & Services Association (PESA) elected new officers and new industry leaders during an online meeting on April 14, 2020. Roderick Larson Chair President & CEO Oceaneering International Michael Reeves Vice Chair President & CEO Rubicon Oilfield International Matt Armstrong Policy Chair Head, Global Government Affairs Baker Hughes Chuck Chauviere Finance President, Drilling Systems Baker Hughes

Pearl Chu Director-at-Large Director, Technical Domain and Knowledge Management Schlumberger Galen Cobb Energy Educators Chair Vice President – Industry Relations Halliburton Karen David-Green Director-at-Large Senior Vice President Stakeholder Engagement & Chief Marketing Officer Weatherford

Robert Drummond Director-at-Large President & CEO NexTier Michael Kearney Director-at-Large Chairman, President & CEO Frank’s International Craig Lange Membership Chair Global Strategy, Energy & Transportation Caterpillar, Inc.

Kirk Shelton Director-at-Large President NOV Completion & Production Solutions Andrew Way Compensation Committee President & CEO Exterran Warren Zemlak Director-at-Large President & CEO BJ Services

Douglas Polk International Trade Chair Vice President – Industry Affairs Vallourec

2020-21 Advisory Board Edward Bayhi Vice President – Petroleum & Industrial Pumps Gardner Denver Jeff Boettiger VP of Sales & Commercial – Dallas/Fort Worth Schlumberger Marco Caccavale Vice President Americas Turbomachinery & Process Solutions Baker Hughes Dave Christmas CEO Fluid Delivery Solutions Melissa Cougle Chief Financial Officer Frank’s International Kevin Crowley CEO Forged Products David de Roode Partner and Executive Vice President Lockton Global Energy & Marine


Todd Ennenga Director of Government Affairs Halliburton

Quay McKnight Chairman & President M&M International

Bruce Ross Managing Partner OFS Energy Fund

Barry Glickman President TechnipFMC

Kyle O’Neill Chief Financial Officer U.S. Well Services

Bonnie Houston Chief Administrative Officer NOV

David A. Paradis CEO Trillium Flow Technologies

Etienne Roux President – Global Business Development Weatherford

Michelle Lewis Board of Directors Energy Tubulars

Dan Pratt Vice President of Northwest Operations DistributionNOW

Scott Livingston President, Intervention & Stimulation Equipment NOV Completion & Product Solutions

Stefan Radwanski President – Surface Systems Cameron, a Schlumberger company

Josh Lowrey CEO Galtway Enterprises

Kyle Ramachandran President & CFO Solaris Oilfield Infrastructure, Inc.

Jill Massonne Director, Global Off-Highway Sales Allison Transmission

J. Wayne Richards President & CEO GR Energy Services

Energy Connection/Q2 2020

Gabriel Rio President & CEO Milestone Environmental Services

Sanjiv Shah Managing Director, Investment Banking Simmons Energy, a Division of Piper Sandler Tom Shepherd President, Gulf Region Cummins S. (Soma) Somasundaram President & CEO Apergy Jim Wicklund Managing Director – Energy Group Stephens Inc. D. Lyle Williams, Jr. Senior Vice President, Operations Forum Energy Technologies

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