Peebler – the 'boomlet' that was (September 1998)

Bob Peebler, CEO of Landmark Graphics Corp,gave Landmark’s vision of what is important in E&P IT at a press luncheon duringthe New Orleans SEG. Peebler is trying to persuade the E&P industry at large thatspending just 0.02% of its budget on it is not good enough.

Bob Peebler has been trying to convince the E&P sector to get serious about the race for survival. In the light of recent developments (BP/Amoco and Shell) Peebler, without exactly saying ‘I told you so’, is at least comforted that his remarks have been particularly a propos. Describing the events of the last couple of years as a ‘boomlet’, Peebler painted a bleak picture for those who imagine that salvation will be at hand in the form of an oil-price rise. In the context of a continuing search for increased productivity and better tools for decision support, Peebler noted that only 0.02% of the overall E&P budget is spent on ‘front office IT’ i.e. E&P applications. This contrasts with the larger amounts spent on the ‘back office’, i.e. the accounts department where a fairly healthy estimated 1$ billion has been spent on SAP software alone. Stock market pressure for a better return on investment than that currently offered by the E&P sector, is forcing companies to re-invent themselves and their IT. Peebler offered several areas where Landmark sees significant room for improvement. Data management is one, where the driver of technologies imported from horizontal markets will allow for the deployment of distributed, scalable, operationally-focussed solutions.

In particular, increased bandwidth will allow companies to manage data in-situ (see the article on Open Explorer in this issue). Another way forward relates to the relative lack of importance that the industry has given to depth in the seismic method. Peebler speculates that 80% of future reserves are hidden by depth conversion problems such as those posed by subsurface salt in the Gulf of Mexico. Peebler described the depthing issue as necessitating a major paradigm shift ‘the whole factory needs to be re-tooled’. Integration was also a focus, particularly that of well planning and drilling. Portfolio management and resource allocation was seen as a field where the industry was moving from a ‘gut feel’ approach to integrated decision support based on a collaborative model. Emphasizing the ‘Graphics’ in the company name, Peebler described some of the ground breaking work being done in virtual reality as a decision support tool. Texaco have installed a $400,000 Visionarium for decision support and Peebler forecasts that soon, every company will have one. By 2005 we will be working as a team, distributed across the world and all looking at the same virtual data wearing the funny glasses. Incidentally, we here at PDM would also like to point out that a global spend of an estimated 0.00000002% of the worldwide E&P budget on subscriptions to PDM is also an area where attention is urgently required!