Oil IT Journal interview, Mark Bashforth, Ikon Science

Ikon Science CEO Mark Bashforth and CTO Denis Saussus discuss working smarter at $50 oil, collapsing engineering and geoscience silos and the return of geophysics to shale drilling.

What’s it like being an upstream software boutique in the downturn?

MB Everyone did fine $120 oil! Times are hard for many but in my experience, mid-sized specialists like Ikon suffer less in the downturns than others. I joined Ikon in February when founder Martyn Millwood Hargrave was looking for a commercially minded person to drive future growth. Martyn is still chairman. We are now coming strong out of the downturn and are lean and in better shape than our main competitor*! We are nimble and can react quickly to our clients in IOCs, NOCs and large independents who come to us for rock physics, quantitative interpretation (QI) and our JiFi joint inversion.

Where do you see growth coming from?

MB The rebound in North America is strong. Companies are seeing the green shoots of returning OPEX and a resurgence of research money. The EU is OK, Asia Pacific so-so. Overall the demand is for software which is always a more robust business. Services are not so strong.

What is driving the renewed interest from operators?

MB Although oil price is important, what really matters is long term price stability. Clients won’t invest if the oil price yo-yos up and down. A realistic range is around $50 for the next 12-18 months. Demand is picking up, especially for unconventionals. At $120 there was no time to think and analyze. At $50 operators have to work smarter on where to drill, how to drill and how to maximize recovery. This is where Ikon comes in. Working faster is not enough. Operators need to change from the cookie cutter approach, take a step back and analyze their workflows.

But this goes against the factory drilling paradigm. How do you convince the engineers?

MB We see the silos as collapsing. Asset team managers want more control. They increasingly look holistically across the business and are bringing the different disciplines together, including geophysics.

DS Geopressure and geomechanics on their own did not have much impact on unconventionals at $120. Some analysis was done ‘just in case’ but then the factory drilling approach came along. Geophysics was replaced by statistical drilling. But now, at $50, you can only can drill so many wells and companies are looking for that extra edge. The pendulum has swung back re geophysics, geomechanics and QI.
Now this stuff ‘may be worth a shot!’ There is no silver bullet here, but Ikon has slowly added value to the methodology. Our software is a differentiator. The larger upstream software vendors have built ‘elephant’ platforms that can do anything but do nothing very well! These folks are feeling the pain now as they see drop in maintenance revenue. Ikon created the rock physics market which is now in every company’s workflow. JiFi is a step change, bringing-in fracking and integrating geology and geophysics. Our real time pore pressure predictor gets closer to the driller with practical workflows and the application of high-end science.

How do you cohabit with the big guys?

DS We have a collaboration deal with Schlumberger to bring key functionality into Petrel. There is now a large group of Petrel users interested in RokDoc. It has been a win-win.

How do you approach geophysical number crunching?

DS Our platform is Java-based so we run on Windows and Linux. We also have support for MPI so our number crunching can run on clusters. We are in the process of a move to the cloud, extending our parallel processing capability. Industry is generally very slow to move to the cloud. But last year saw a change, especially with smaller operators. A couple of US operators have outsourced all of their IT. Landmark’s DecisionSpace has been on the cloud for a couple of years. Schlumberger is moving slowly that way and will bring us along. It is not really our role to initiate such a move for operators.

MB Oil and gas as a whole is a laggard in technology adoption. We need to stop these risk-averse ways of looking at technology. Yes, our industry is unique but not so unique that it can’t learn from others. Many oils actually make their own software. Would they be happy if Ikon drilled wells? It doesn’t make sense!

More from Ikon Science.

* After the interview, CGG (whose Jason unit is an Ikon competitor) filed for protection from bankruptcy in France and other jurisdictions.

Click here to comment on this article

Click here to view this article in context on a desktop

© Oil IT Journal - all rights reserved.