The keynote address below was given by Bob Peebler, ION Geophysical CEO at the annual World Oil Awards on October 13, 2011. The theme of the event was:
“A Decade of Achievement: Recognizing innovations in the oil & gas industry”.
Bob Peebler, ION Geophysical CEO
It seems like only yesterday I received my award from World Oil over 10 years ago. I suspect that most, if not all, of you in the audience go through the annual planning process where we look ahead, make assumptions about the future, and then build our strategic plans that look out 5 to 10 years or more, and also tease out our annual plans from that broader context. I find it interesting to occasionally look back to see how accurate we were in our forward-looking projections and, most importantly, to see what we missed.
Ten years ago, how many of you forecasted that China would have made the economic progress they have made, would be challenging the world for economic dominance, and would be the primary driver for energy demand in the world? Did you anticipate that the one of the biggest industry challenges and opportunities would be the shale play, starting in the US and spreading around the world? Or how about the collapse of the financial system, caused by a housing Ponzi scheme? And I’m sure you included in your planning the BP blowout that would essentially shut down the deep water Gulf of Mexico for more than a year. Or how about oil prices? In 2002, oil prices were hovering around $24 dollars. Did your plans anticipate oil peaking at $150 in the summer of 2008?
And it’s amazing to look at how technology has impacted our personal lives. Back in 2002…
- Google had not yet become a verb.
- Cell phones were used for telephone calls; smart phones didn’t exist.
- Tweeting was left for birds in the park.
- Floppy disks were state-of-art for data storage; USB flash drives weren’t around yet.
- The government had just recently agreed to allow commercial applications for GPS.
- Sony Walkman with cassettes or small CD’s would be soon replaced by the first iPod.
- IEEE 802.11 or Wi-Fi was just starting to be commercial with only a few “hotspot zones” available.
- And we all spent hours in our hotels and homes with computer dial-up to connect to our email, etc. Remember trying to get a ‘handshake’ in a hotel overseas that had poor telephone connections?
- TiVO didn’t exist, so we were in the hands of the television networks before viewers took control.
- Who would have thought that in 10 years the majority of pictures taken would be with our phones, and the pictures would be transmitted via wireless networks around the world? I bet the camera companies didn’t predict that one.
- And did any of you imagine that the political landscape of the Middle East would be changed by social networking? Back then, social networking was what we were doing in bars.
Even though many of us failed to predict most, if not all, of these dramatic changes driven by technology, there are some trends that have been remarkably predictable, yet from my point of view, remarkably slow, in adoption. For example, in our industry, we have been talking about the “Digital Oil Field” for over 20 years. In my Landmark days over 15 years ago, we were helping pioneer the integration of disciplines through which data and information could be shared seamlessly, and operations would become more real-time or near-time. This vision has begun to become a reality with remote monitoring and visualization centers, and oil fields are truly becoming wired, but I think we’re still closer to the beginning of this ‘informationalization’ and integration of our industry, since the amount of data and information we are handling is increasing faster than infrastructure can be built to manage it, and even more importantly, to make sense of it.
So what does this mean from a planning perspective? Should we just live year to year? It depends on your strategy. For example, even though consumer electronics seem to move at breakneck speed, Apple chartered a course several years ago that was based on the idea of not being in the electronics device business. Instead, their strategy was to build eco-systems in which their device was not only state-of-art electronics, but it delivered a complete experience, such as downloading music for 99 cents a song. They combined an innovative business model, great design to make their products “cool”, and an integrated system that provided a convergence of sound, sight (camera), communications (telephone, texting), cool applications with an open architecture to induce software entrepreneurs, and a connection to the World Wide Web. This integrated approach has created such entry barriers for their competitors Apple has the stability to build long-range plans and a product roadmap that has stretched out over years. While I’m sure they have had to be fast on their feet, in taking advantage of almost unimaginable compute power, etc. that they likely didn’t fully comprehend, by being flexible while still sticking to their business strategy, they have built the most admired company in the world. Conversely, companies that have stayed the course of being in the component or simple device business likely have a hard time planning for more than a year and end up subject to commodity pricing, if they survive at all.
Looking ahead, I have no idea what world events might come along to disrupt our business plans, or technology breakthroughs that we can all take advantage of in building new technology. But it’s clear to me that we will be in a predominantly hydrocarbon energy world for the foreseeable future. I’m not suggesting those renewable energies, such as solar, wind, and other sources of power will not become important in our energy mix, but we are still in the very early stages of these emerging energy sources. I would suggest we are in the early technology or best case early adopter stages and are years from having the cost and utility needed to enter the mainstream. Our industry is facing the challenge of keeping up with energy demand that is clearly being driven by the shifts in population towards middle class in the developing countries. This future demand is challenging our industry to go to even more difficult areas, such as the Arctic, deep waters around the world, and unconventional reservoirs, which are becoming conventional. Clearly, the shale plays have created a discontinuity in the market that has once again challenged E&P companies to innovate to not only find and produce, but to do it economically.
So what can we look forward to when we look ahead from a technology perspective? Since tonight is about technology across many disciplines, I will focus on computing technology, which underpins directly or indirectly most all of our technologies, independent of what our companies do. I suggest that 10 years from now, around 2022, we can’t imagine how different the computing world will look like compared to now, when we are already wowed by our iPads, iPhones, and the computing power at our finger tips. About the time that the computing industry is predicting the demise of Moore’s law, another technology comes along that allows the trend to continue. And this time around, Moore’s law is going to have to be rewritten. Rather than computing power doubling every two years, we can expect at a minimum a 10- to 20-fold increase every five years. We can expect a 20X increase in home and office network speeds, with a petabyte (1 million gigabytes) of storage costing around $100.00. We can also expect to see the internet evolving to instantaneous communications regardless of distance. All of this will converge to bring cloud computing fully into the mainstream, with PC’s as we know them today disappearing from the scene altogether. We can only imagine the impact of this constant drumbeat of increasing computing power. The trend towards real-time information systems that integrate the field and the office will finally become a reality, and virtual companies where employees can participate virtually as if they were physically present will become more dominant.
Even though it’s hard to predict the exact technologies that will be borne out of these impressive trends, one thing of which I am certain is that when we combine this ever-growing compute power with the best and brightest in our industry, we can look forward to our industry continuing to play a mission-critical role in fueling the economies of the world.
