The OGInterview: A Whole New World [WATCH]
Velda Addison, energy transition senior editor, Hart Energy: Oil States International (OSI) has been around for more than 80 years, offering offshore and manufactured products and providing downhill technologies and well site services. But as the energy business moves deeper into the lower carbon space, OSI has been transferring its skillset into renewables like floating wind and minerals. This is the OGInterview with Cindy Taylor, CEO of Oil States International.
Cindy Taylor, CEO, Oil States International: Your lead-in suggested—and you're right—we've had a long history of providing innovation to the oil and gas industry, and we recognize there's a significant move to both expand energy and decarbonize. And so we have decades of experience around a lot of our products and services that have huge technological advancements over the years—engineering advancements, manufacturing. And so what we're trying to do is take that history, that technology, and adapt it into new applications around alternative energy development. And we have good avenues for that. Probably the most immediate are minerals recovery off the seabed to facilitate battery storage, grid infrastructure, investments and the like—generally electrification if you will. Also, we're going to migrate fixed wind platforms offshore into deeper waters, and we've invested in some technology around fixed tension LED platforms to help provide a solution to the markets for that. There are opportunities for CCUS and geothermal as well that I think fit pretty well within our product offering.
VA: Tell me a little bit more about your core business in oil and gas. Where do you see opportunities for growth there?
CT: Great question. So we are global in scope and scale. We have a lot of high technology manufactured products that go into deep water applications. We do work on U.S. land as well. And so depending on the cycle, you may see greater investments on U.S. land similar to last year or 2022, but now that we're seeing greater stability, if you will, in crude oil prices, particularly as well as longevity around our industry. We're seeing more and more investments in Brazil, Guiana, Southeast Asia, Middle East, as well as the U.K. North Sea and West Africa. So our business tends to go in cycles between shorter cycle U.S. investments and longer term, longer cycle investments globally, particularly in deep water, we are now on that continuum where we're seeing greater investments in growth in deep water areas around the world.
VA: So is the story the same?
CT: Onshore really had a good acceleration last year. If we're talking about U.S. versus global basins, it moderated a bit because if you'll recall, crude prices were a bit weaker earlier this year than they are today. And these shorter cycle meaning shorter duration to drill and complete wells go up and down more quickly than longer term investments in deep water fields. These deep water fields are intended to produce for 30 years, whereas an individual land, well may produce for the long term, but about 40% of their productive life is produced in year one. So it's a different capital allocation strategy really between land and offshore.
VA: How do you see demand for OSI minerals offerings changing?
CT: We've offered high intensity, deep water, high pressure riser systems to the oil and gas industry for years. We've adapted that technology to retrieve metals and minerals off the seabed, and I say it's real. It is moved from more research and development to actual true applications. You may have the right technology adapted for the application, but we need the right to retrieve those polymetallic nodules before it really accelerates into revenue production for us.
VA: So a common theme that have emerged for both onshore and offshore, as well as renewables, is reducing emissions. How is OSI using its core expertise to pave a path toward a global energy mix that is both low carbon and multisource?
CT: The first thing is control—what you control directly, which are our own emissions through our own operations. And the example I gave you earlier, we have lots of trucks on the road because oil and gas operations are oftentimes in remote areas, so you have to travel back and forth. You're in harsh environments, either the extreme cold weather conditions in the Bakken in the winter, or the extreme heat in the Permian in the summer. Our people have to be protected. And so idling in vehicles, you may need AC if it's 110 [F] outside and you may need heat if it's freezing temperatures at times. But there are things we can do to manage our own emissions with our own fleet and our own use. The other one is manage your own input source and try to get low carbon power into your own manufacturing facilities. And we just implemented solar panels as an example in our U.K. operations. It's a big manufacturing operation, so we are trying to reduce, first and foremost our own emissions. I always say the best thing we can do is make conventional oil and gas cleaner and more competitive for the long term while investing in areas where we can facilitate new technology around energy transition.
VA: Cindy, thank you for your insight. We look forward to hearing more about Oil States International.
CT: Well, thank you so much for your time and giving us the opportunity not only to tell our story about the company, but tell our story about the industry as a whole.
