OPINION: The annual Offshore Technology Conference (OTC) was to have opened on 4 May, with some 60,000 delegates and exhibitors expected to descend on Houston’s Reliant Park to meet colleagues, schmooze customers and mingle among the hundreds of booths clamouring for attention.
Above all, they would be getting an exhaustive view of the current state of offshore oil and gas technology and the research and development trends under way, including the low-carbon and renewable energy technologies that have taken up an increasing share of OTC’s floor space and conference agenda in recent years.
But this year's event is off and, instead of Houston, many would-be attendees will spend next week in makeshift home offices, trying to find some semblance of work-life balance when Covid-19 lockdowns have all but obliterated the line between the two.
Those fortunate to have work, that is. The industry job losses have come fast and heavy as oil demand and prices have plummeted, and many more are almost certainly on the way.
Oil companies — big and small — and service providers have announced severe budget cuts for 2020, while many have started letting employees go.
Industry body Oil & Gas UK warned this week that this downturn could be worse that the price crash of 2014 and that up to 30,000 jobs directly or indirectly supported by the industry could be lost in the UK alone over the next 12 to 18 months.
What this crisis means for technology development is, like so many things right now, unclear but R&D budgets are bound to suffer.
Lorenzo Simonelli, chief executive of Baker Hughes, said in the company’s first-quarter earnings conference call: “We won’t stop our technology investment, but we will adjust our spending plans to the current reality of the market, just like we’re doing across the business. Now more than ever, all investments must deliver strong returns.”
A spokesperson for Italy’s Saipem noted that the company increased its technology R&D spending during the 2015 downturn.
“Starting from this considerable position, and considering the nature of the current downturn, the reaction cannot be the same as before,” the spokesperson said, while assuring that Saipem's technology spending will be only "slightly rephased”.
The R&D focus of the past several years on digital technologies that reduce costs and tools to cut carbon emissions — and there is often a lot of overlap here — are likely to be the winners as budgets get pared. If the majors remain committed to the energy transition they will need technologies to get there.
Meanwhile, it has been heartening to see examples of the industry bringing its technical expertise and computer power to the fight against the pandemic.
More help from all quarters will be needed to develop better methods to counter the spread of the coronavirus and, ultimately, produce a vaccine.
Both might have to happen before people feel comfortable gathering in numbers like they have at past OTCs.
The conference, like the industry it covers, has seen some ups and downs over its 50-year history.
What either looks like this time next year is anybody’s guess, but 2020 is likely to go down as a watershed for both.
(This is an Upstream opinion article.)