The Jan/Feb issue of Drilling Contractor magazine includes an article interview by Editor & VP Linda Hsieh of 2023 IADC Chairman Andy Hendricks. The article, titled “2023 IADC Chairman: Moderated growth may create healthier business environment for drillers in coming years,” opens with discussion about a possible multi-year upcycle for the industry.
In regard to the recent short-lived cycles, Hendricks states,
“A multi-year cycle will be very healthy for both drilling contractors and other service companies, whether in the North American onshore, international or offshore regions.”
Hendricks is looking forward to a longer-term upcycle due to the fundamental changes in how public E&P operators manage their business. He explains,
“Several times over the past decade, US producers have ramped up production and chased growth because that’s what their shareholders incentivized them to do. In doing so, it really led to overproduction, which then led to challenges in the global oil markets. But now, US producers are focusing much more on returning cash to shareholders. This is actually a huge positive for our industry, as they have been growing but with moderation.”
During this cycle, drilling contractors will be much more focused on upgrading and reactivating existing rigs than on adding new rigs.
The article then explores the challenges drilling contractors are facing concerning staffing entry-level rig crews and emissions reduction. Drilling contractors will continue investing in emission-reducing efforts and technologies, but Hendricks asks an important question: Who owns the emissions from the prime movers, like the generators, on a drilling rig? He explains,
“As a drilling contractor, we don’t determine the specification of the operation. We don’t determine how many generators are required. We don’t determine if a generator gets replaced by a lithium battery solution. We don’t determine the fuel source. Those are all specified by the E&P company.”
This looming challenge will remain important as investors, regulators and the public continue to scrutinize emissions levels.
Hendricks then discusses his goals as IADC Chairman, stating that he is excited about leading a healthy and thriving industry as the Association’s Members work to advance safe working conditions for everyone on location, improve the onboarding of new employees and continue to push the limits of new drilling technologies. He applauds IADC in its efforts with the Student Chapter program and getting the message out to new talent about the importance of what we do as an industry.
In closing, he expresses how integral our industry is and how much the world needs oil and gas. He says,
“The discussion should not be pitting one energy source against another. As the world’s population grows, we’re going to need all energy sources. Our industry may not be loved, but we’re needed. And we’re going to do our best to help meet the world’s energy needs in a safe and sustainable way. I am proud of our industry’s ability to produce affordable energy that makes peoples’ lives better.”
