OTC to look ‘surprisingly good’
In the 12 months since the oil industry made its last pilgrimage to NRG Park for the Offshore Technology Conference, crude prices have gone from bad to worse.
Oil plunged below $30 per barrel for the first time in 12 years in January and recently climbed above $44, hitting deep-sea producers and their contractors hard. Few companies are putting up the tens of millions needed to drill new wells as they slash budgets and payrolls. New offshore activity has slowed to a crawl.
But if the present is bleak, executives and analysts see a brighter future, with prices rebounding and rigs returning to work.
The Chronicle spoke with OTC Chairman Joe Fowler about the effect of the slump on the conference and the role OTC will play in a changing industry.
Edited excerpts of the conversation follow.
Q: What does the Offshore Technology Conference look like at $40 oil?
A: It’s going to look surprisingly good. Our exhibit sales are not down very much, about 6 percent. The conference has had a waiting list for exhibitors for some time. We have some 291 new exhibitors this year. We have 333 technical papers. We have 24 industry lunches and breakfasts where top-notch speakers come to speak. In total, we’ll have over 2,600 companies exhibiting this year.
Q: Have low prices deterred domestic companies from exhibiting? International ones?
A: The major equipment suppliers, which make up the bulk of our exhibitors, are for the most part coming back. The domestic drillers, they’re almost all going to be there. On the international side, for the first time this year, Japan will have an exhibition. The foreign companies, in particular, recognize the value of the OTC and are here.
Q: Have low prices affected the exhibits themselves?
A: Many companies have more digital displays and less big iron, which is what we call the big displays. People believe they can get their message across and spend less with digital booths and presentations. But there’s still something about big iron that will keep it at the show. You can see a picture of a big piece of equipment, but actually seeing one and putting your hands on it is a different experience.
Q: What are some other trends you’ve seen in the exhibits in recent years?
A: What has been really fascinating is the change in how the big exhibitors do their work once they’re set up. It used to be they would have samples of equipment there and people to talk about the equipment. All of them still do that, but also they now have training sessions that go on in the middle of the exhibit floor. Someone has a new completion system, and so they’ll have really professional lectures and demonstrations about how to use it. This is where the digital technology becomes really powerful.
Q: What is the future of the Offshore Technology Conference?
A: Most people in the industry don’t think that prices will stay this low for that long. We get 20 percent of our crude oil in the U.S. from offshore. There’s a big need for our offshore energy here in the U.S. In addition, offshore drilling really is a worldwide industry that works in oceans across the globe. This conference is the center of it. If you put all that together, the future of the OTC is still bright.
Q: What role can the conference play in helping advance the industry?
A: One of the problems that we’ve had in the offshore is that many of the projects were too expensive, and their costs only grew over time. We are focusing our technical programs to talk about that issue. There will be some cost-focused programming at this year’s conference, but even more will happen in 2017. There are a lot of elements of technology that are included in lowering costs. The OTC intends to be a thought leader in that. If you want to see the future of the industry, this is a good place to come.