Q&A with Mario Ruscev, Chief Technology Officer, Baker Hughes
Authors: Henni Abdelghani , Ruscev Mario 
Published: September 2016

Q&A
Do you think low oil prices will affect the ongoing technology developments that are aimed at tackling the challenges the industry faces, particularly those related to unconventional, deep, and ultradeep offshore exploration?
I think, on the contrary. I do not view what is happening now as a downturn; I see snow coming after a nice bubble. In the last 10 years, we enjoyed very high prices, which made us a bit lazy intellectually, as everybody was doing well.
The industry as a whole has a cost issue, and it needs to be solved, but this cannot be accomplished just by cutting costs through laying off people, etc. For example, in unconventional plays, we need to go back to the basics to understand the science of it, because despite the fact that we drill fast, much of what we do is still not very efficient. Nothing is as inefficient as drilling, fracking, and completing a well, and then not producing it, or having half of your zone not producing.
This is not about technology, but it is about going back to basic science to understand why, when you drill a well and completely frack it, it does not flow. We have always called it reservoirs. I think that is a misnomer, because reservoir is about permeability. We measure conventional reservoirs in darcies. Unconventional formations are so low in permeability that the standard darcy measurement cannot explain the ability of fluids to flow through them. The only way to get these rocks to flow is through hydraulic fracturing. Yet, each time we frack, we create a little artificial reservoir that is unstable.
We do not know which part of that artificial reservoir is flowing naturally, or how much the slipping fracture is contributing to the flow. We do not know how the artificial reservoir we have created functions. If we do not understand that, it will be extremely difficult to become very efficient.
Getting back to the basics should be followed by developing the right technology to solve the issue. We can apply this to deep water. In drilling, for example, if we want to be more efficient, we must move to automation. The largest share of drilling cost is rig time. Every time we perform an intervention, it costs a fortune. We need to view completions and subsea systems holistically. Just making them bigger and heavier is not the solution. We need to develop systems that can survive for the long term. We need systems that do not need frequent intervention; we need to completely review everything.
Our new Hammerhead system, which we introduced during OTC (Offshore Technology Conference), is considered the industry’s first ultradeepwater wellhead- to-reservoir completion and production solution. This is just the start of the future of smart ultradeepwater solutions. If you look at this new system, it has a completion that can survive up to 20 years, and it is intelligent. “Intelligent” does not just mean going from hydraulic to electrical; it means that you have the right sensors. You can adapt, because, over 20 years, all reservoirs will change, and the intelligent completion will adapt itself. This is the start of a long journey.