The 47th Offshore Technology Conference kicks off Monday at NRG Park.
OTC gets underway amid gloom in the industry
Tens of thousands of energy professionals from around the world head to NRG Park on Monday to kick off the 47th Offshore Technology Conference against the backdrop of the worst industry downturn in 30 years.
The annual celebration of offshore drilling, 1,000-pound blowout preventers and high-tech robots is expected to be tempered by a focus on cost-cutting and the demands of keeping businesses afloat as many firms face a second year of substantial losses. Cheap oil and a glut of drilling rigs on the market have combined to push offshore industry into one of the most crippling downturns since the 1980s.
Several of the most ambitious Arctic drilling ventures have been called off, and major oil companies such as ConocoPhillips have canceled or delayed offshore projects. Baker Hughes, the energy services contractor, estimates that drillers are now operating fewer than 25 rigs in the Gulf of Mexico, the center of U.S. offshore activity, compared with more than 50 in 2014, when prices began their slide.
Conference organizers say the gathering this year is perhaps more vital than ever as drillers seek new technologies and practices to increase efficiency, lower costs and become more competitive with land-based drillers tapping shale deposits.
“Since 1969, the world has come to OTC to make critical decisions, share ideas and develop business partnerships to meet global energy demands,” conference chairman Joe Fowler said in a statement.
The Offshore Technology Conference occupies a unique position in the industry, reflecting its health and market conditions.
Attendance peaked in 2014 with 108,161 showing up at NRG Park. The crowds thinned last year to 94,880 as oil grew cheaper and is expected to slide further this year. Exhibit sales have already fallen off slightly, offi-
cials said.
Attendees can expect to see somewhat scaled-back displays and less swag as companies face more costcutting and layoffs.
Panels this year include instructional courses in subsea drilling, technical discussions about well completion technologies and showcases of the systems that hold rigs in place at sea while drilling. Exhibitors include a long list of the largest U.S. offshore drilling companies and the manufacturers that supply them, as well as delegations from abroad.
Even with prices rebounding and possible recovery in sight, the future of offshore drilling remains uncertain. Industry executives and most analysts agree that underwater reserves will need to be tapped over the next decade, but few predict that offshore drillers will have the license to drill as they did when oil topped $100 per barrel. In the future, analyst said, each well drilled into the seafloor will have to prove itself a better investment than the shale of Texas and North Dakota.
But as bad as conditions are, the OTC has seen worse than $45-per-barrel oil. In 1984, industry conditions were so depressed that the conference wasn’t held.