ACCELERATING TECHNOLOGY ACCEPTANCE
Crossing the Technology Chasm:
Seismic While Drilling
Steve Jacobs, Principal, Decision Strategies, and John Donnelly, JPT Editor
Editor’s note: This is the second install-
ment of a multipart series examining
key upstream technology challenges
facing the oil and gas industry and
the reasons for the lack of accelerated
acceptance of technologies needed to
exploit increasingly challenging drill-
ing and production environments.
Like managed pressure drilling (MPD)
covered in the first installment in this
series (see February JPT), seismic while
drilling (SWD) is an emerging drill-
ing evaluation technology that many
believe provide considerable value to
the industry. While not on the market
as long as MPD, SWD services are cur-
rently offered by several technology
providers. As part of this joint analy-
sis of new technology acceptance by
Decision Strategies and JPT, an e-mail
survey was conducted among approxi-
mately 250 SPE members located
around the world. The vast majority of
these respondents were operators and
technology providers, with a good rep-
resentation of drilling contractors, con-
sultants, and academics also included.
SWD Value
Proposition Analysis
Similar to the MPD market analysis,
the survey started with the following
question: “What are the main value
propositions you see for seismic while
drilling services?” As shown in Fig. 1,
three value propositions were named
with equal frequency:
• SWD utilizes geosteering capabili-
ties to optimally place the wellbore
• The service allows the operator to
correlate SWD data with other seismic
• The technology provides real-time
look-ahead of the bit imaging.
There were no significant differences
found between technology providers
30
and operators as to the importance
of the three value propositions. As
stated by one respondent: “(SWD) will
hugely increase the probability of cap
rock as we can check the profile peri-
odically and make changes with the
help of directional drilling and other
relative measures.” These value propo-
sitions were further addressed in an
interview with Nils Edwards, prod-
uct manager for Baker Hughes Seismic
While Drilling Services. “Over 95% of
all wells drilled are based on surface
seismic, which has quite large uncer-
tainties, especially in the high-risk sub-
salt markets,” he said. “By providing
check shot and reflective information
in real time, the operator can update
their surface seismic even while drill-
ing to lessen these uncertainties as the
well is approaching the targeted zone.
Adjustments can be made to hit the
target in the optimal position.”
Other service companies interviewed
also explained the significant potential
value of SWD. “The emergence of deep-
water drilling is adding more complex-
ity in unknown fields,” said Jean-Marie
Degrange, acoustic product champion of
Schlumberger Drilling & Measurements.
“Indeed, deepwater wells are also much
more expensive while facing increas-
ingly complex challenges. Our seismic
while drilling technology provides bore-
hole seismic data while the well is being
drilled, which enables accurate time-
to-depth conversion of surface seismic
data without uncertainty on formation
velocity down to the drill bit location.
Measurements acquired using this tech-
nology offer a unique look-ahead capa-
bility without disrupting operations,
which provides indications of the struc-
tures of reflecting horizons ahead of the
bit to support drilling and well construc-
tion decisions.”
About this Series
The petroleum industry has a proud history of
developing technology capable of exploiting
reserves in increasingly harsh surface and down-
hole environments. Despite these considerable
accomplishments, it has been documented that
the speed of technology acceptance is slower in the
petroleum sector than in a number of other indus-
tries. As exploration continues to focus on even
more challenging environments (e.g., high pres-
sures, high temperatures, deep water, and extend-
ed reach applications), the need for advanced
technology to successfully exploit hydrocarbons will
only escalate. JPT and Decision Strategies, an oil
and gas management consulting firm, have teamed
up to examine these key upstream challenges, the
potential technology solutions, and the reasons
for a relatively low acceptance rate of some new
technologies in the industry.
To start this market analysis, a worldwide survey
of SPE members was conducted to identify spe-
cific technologies that represent real benefit to end
users. The initial survey asked one question: “What
do you believe are the most important upstream
technologies that will be needed in the coming
years?” Respondents supplied more than 1,000
suggestions, with no single technology mentioned
with dominant frequency. However, several prod-
ucts and services were identified by both users and
service providers as being important technologies
for the future. Some of the technologies identified
as having significant potential were managed pres-
sure drilling, seismic while drilling, and permanent
downhole monitoring.
A second, more detailed survey among SPE
members was conducted to identify the value
propositions for these technologies, determine why
they are not more widely used, and to analyze its
potential if these obstacles to technology acceptance
are addressed. Results were then shared with rep-
resentatives of technology providers and users to
further explore the issues surrounding the benefits
possible with the uptake of this technology. This
second installment examines seismic while drill-
ing. Similar surveys are being conducted for other
technologies identified in the initial survey with the
results to be explored in future issues of JPT.
Comments about this series can be sent to jdon-
nelly@spe.org or sjacobs@decisionstrategies.com.
JPT • MARCH 2011
ACCELERATING TECHNOLOGY ACCEPTANCE

Percentage of Total Can correlate SWD data

participating in the current survey, the
uptake of SWD has been slow for the
with other seismic
following reason: “The implementa-
21% 22% Optimized wellbore tion of this in an offshore environ-
placement through ment would be quite costly in terms
geosteering of resource coordination, and possibly
17% cost. Offshore may be where the easier
22% Results in safer drilling cost justification is, which is ironic.”
18% Operators understandably have consid-
Optimized casing points erable difficulty justifying the cost of
a new technology if they are unaware
Real-time look-ahead of or unconvinced of its benefits. This
imaging is the challenge in the early stages of a
new technology introduction.
Fig. 1—SWD value propositions. Cost-justification is an issue that ser-
vice providers frequently deal with.
“That’s the question that we are strug-
Operators believe SWD is gling with too,” said Chris Bilby, glob-
hard to cost-justify al product launch manager, LWD for
Reasons For Slow Uptake
Halliburton. “Surface seismic target
Technology providers depth uncertainty results in many wells
3% have not adequately not achieving optimal position with the
communicated its value targeted reservoir, and in some cases
28% 37% miss the target altogether resulting in
Fewer applications for expensive drilling sidetracks or well
SWD than some think redrills. SWD can certainly help to
14%
18% reduce this uncertainty, but operators
Operators risk-averse to have been slow to adopt this technol-
new technology ogy into the industry mainstream.”
The risk-averse nature of operators
Technical issues with with regard to trying and accepting
SWD new technology was also raised by
Fig. 2—Why SWD has not been accepted more quickly by operators.
about one-quarter of the survey sam-
ple. This finding was as equally preva-
lent among oil company personnel as
it was technology providers. According
Better communication of to one respondent: “The industry is in
benefits a cost cycle and not a value cycle. Asset
9% 16% teams want the bare minimum expense
7% More case studies, and without expert advisers an asset
including cost/benefit is not likely to embrace any emerg-
15% analyses ing technology.” A slightly different
view was held by another respondent
Reduce cost of SWD who succinctly described the challenge
53%
in selling new technology: “Old dog,
Free trial runs/incentive- new trick.”
based payments A different view was provided by
Degrange of Schlumberger. “Initially the
Better/proven reliability seismic-while-drilling service appeared
to be complex due to the logistics
Fig. 3—Steps to accelerated SWD acceptance. and coordination issues surrounding
the seismic source, rig crane, and/or
boat deployment,” he said. “Each well
Reasons for Suboptimal operators believe SWD is hard to jus- has unique challenges that must be
Speed of SWD Acceptance tify in terms of its cost (37% attributed addressed individually to configure the
Respondents to the survey were next SWD’s slow uptake to this issue). Cost- appropriate acquisition program and
asked: “Why has seismic while drill- justification was also the most signifi- associated logistics. As the technology
ing not been accepted more quickly cant reason given by respondents for has evolved over the past few years,
by operators?” As shown in Fig. 2, the slow acceptance rate in the MPD and with the experience gained over
the most frequent response was that survey. According to one respondent numerous wells, these challenges have

32 JPT • MARCH 2011

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ACCELERATING TECHNOLOGY ACCEPTANCE

been overcome. The adoption of the
technology by our clients has been
increasing since the introduction of our
technology in 2003.”
Only a few in the survey voiced
concerns about SWD system reliability,
although it is still early in the evalua-
tion phase of the new technology for
several oil companies. However, in a
number of market assessments con-
ducted over the years, operators fre-
quently mentioned concerns about the
reliability of new technology—it is a
part of the landscape to be concerned
with how well the new technology
is going to perform downhole in the
early stages of the product/service roll-
out (which in some cases can last
years). Operators often suffer “pain and
anguish” in the testing and adoption
process for a new technology that can
dampen their enthusiasm to evaluate
the next promising new technology.
Steps to Accelerated
Technology Acceptance
The respondents were next asked:
“What steps can be taken by operators
and technology providers to accelerate
the rate of acceptance of seismic while
drilling?” As shown in Fig. 3, over
half of the responses stated the need
for more case studies, including cost/
benefit analyses that will help operators
determine the benefits to be derived
from using SWD services. This point
was well expressed in the following
operator comment: “The pushers of
this new technology need to do what
they have always done to make their
Assumes all mentioned steps to accelerated acceptance are accomplished.
34%
31%
29%
new product more attractive: dem-
onstrate that the benefits are worth
the costs.”
The importance of adequate com-
munication between various disciplines
within oil companies was also pointed
out by some technology providers,
as shown in the following technol-
ogy provider comment: “The benefits
of SWD need to be considered by
the operators during the well planning
process, which requires constructive
communication between the drilling
and geoscience disciplines.” This situ-
ation becomes increasingly challenging
when the point of contact for the tech-
nology provider is the drilling depart-
ment, while the ultimate specifier or
influencer in the SWD service selection
is in a G&G position, or vice versa.
“First, you have to go to the G&G for
their particular application and iden-
tify the value, and then you go to the
drilling department in order to get
their acceptance,” said Robert Radtke,
president of Technology International,
which is involved in a project with
the US Department of Energy to push
the current limitations of SWD. “The
drilling department wants to be certain
that there are no risks involved or that
their cost of drilling is not going to be
significantly affected.”
While mentioned infrequently, a few
operators stated that some form of
monetary incentive would help acceler-
ate the acceptance of SWD. According
to one operator, the technology provid-
ers should “offer trial runs with incen-
tive-based payment schemes. Offer the
34% 34%
31%
technology for free to stimulate interest
and lower operators’ perceived risk.”
However, such practices are challeng-
ing because attractive pricing in the
early phases of technology introduc-
tion can make it more difficult for
the service company to establish a
pricing structure later that allows for
an acceptable return on the technol-
ogy investment.
Offshore Market Potential
Operators and technology providers
were next asked if steps were taken
to accelerate industry acceptance of
SWD, what percentage of all offshore
wells would use SWD five years from
now. As shown in Fig. 4, respondents
predicted that 34% of all offshore wells
would utilize SWD five years from now
(compared with a 40% response for
the same question in the earlier MPD
survey). No significant differences were
found to exist in the response to this
question on a regional basis. According
to Radtke: “The percentage will be
significantly greater than 15% and I
venture to say that, in deepwater, it will
approach 100%. In terms of the overall
offshore market, it seems to me like
35% is reasonable.”
A technology provider participating
in the survey described the path to
accelerated technology acceptance: “I
believe that we need a partnership
between operators and service pro-
viders. The technology needs addi-
tional refinement and development,
but without support from operators
the technology providers can’t build a
strong business case for investment.
A technology provider needs to refine
the SWD service to meet an operator
requirement, and the operator needs
to commit to utilizing the service until
it can be proved and value generated.
Pick an area where operators can see
long-term value to the SWD applica-
tion. Take the requirements for that
area and pass to the technology provid-
ers. Develop and test the tool repeat-
edly to best understand value.”

Conclusion
Based on the SWD and MPD survey
results as well as other market analyses,
North Asia Pacific Middle East Total Service Cos. TOTAL several observations can be made:
America Operators • As service companies know well,
new technologies often work reliably
Fig. 4—Percentage of offshore wells using SWD in five years. in a laboratory environment but are

34 JPT • MARCH 2011

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ACCELERATING TECHNOLOGY ACCEPTANCE
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• Getting the value proposition right
is fundamental to the acceptance of any
new oilfield technology. In some cases,
new technology launches have failed
or fallen short of expectations because
the service provider did not confirm
that the product/service being intro-
duced addressed an important need
of the operator. A “value proposition
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hierarchy” often exists, which has a
significant influence on the rate of new
technology acceptance. For example, a
new technology that allows operators
to drill wells or produce hydrocarbons
not possible otherwise would be posi-
tioned high up the value proposition
hierarchy and is likely to experience
accelerated acceptance. An unwanted
outcome for technology providers is
that a niche market is all that results,
making it difficult for the market
shareholders to achieve an acceptable
return. Conversely, making an incre-
mental improvement in a relatively
new technology that is moderately to
considerably higher in price will likely
be positioned on the low end of a value
proposition hierarchy.
• The speed of new technology
acceptance can also be affected by the
coordinated efforts and messaging used
by technology providers to convince
both drilling and G&G personnel of
the benefits to be received from SWD.
As stated by one technology provider:
“I think that perhaps we have been
focusing our sales pitch more on the
subsurface G&G folks and not engag-
ing the drillers, who are the ones who
can really understand the benefits of
avoiding costly well sidetracks and
reducing downhole uncertainty from a
well program.”
• IOCs and NOCs around the world
fit several profiles as to the aggressive-
ness with which they are willing to help
develop and ultimately prove the value
of new technology. Statoil is well rec-
ognized for this practice, and receives
funding from the Norwegian govern-
ment to support the new technology
development process required for their
challenging fields around the world. A
number of oil companies have adopted
a patient attitude with regard to new
technology, preferring to let others par-
ticipate in the transition of unproven
technologies to viable alternatives gen-
erally accepted by oil company person-
nel. This is the landscape in which
technology providers must compete.
To further evaluate the factors that
influence the rate of technology accep-
tance, a third survey is currently being
conducted among providers and users
of permanent downhole monitoring
(PDM) technology. Results of that sur-
vey will be reported in a future issue
of JPT. JPT
JPT • MARCH 2011