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Dan Heintzelman, President & CEO GE Oil & Gas, talks about industry drivers, turbomachinery

technology and the growth of unconventionals

What are the ongoing trends?

Population growth has to be understood. There will be 8.3 billion people by 2030, and Asia will realize 85% growth in its middle class. Therefore about 80 million more barrels of oil equivalent per day of new production capacity will be needed by 2020. We can achieve that, but it won’t be easy as conventional resources are being rapidly depleted. Other factors that need to be taken into account are a rise in electricity demand of 75% and water demand of 54% by 2030, while CO2 emissions will jump 35% in that same time period.

How is this changing the industry?


We will see a 5X increase in CAPEX per barrel of new capacity between 2008 and 2016. We will also undergo 9% growth in unconventional industry spend between 2012 and 2015 as well as 14% growth in subsea spending. Access to unconventional resources is exploding. Our aim is to introduce solutions to improve recovery rates while lessening their environmental impact.

What technological advances are you introducing?

Our Integrated Compressor Line (ICL) is now available in a single-shaft version with one impeller, two magnetic bearings, no split parts and a power range of 2 to 15 MW. Also, watch out for mechanical drive versions of the GE LM6000 MD/PH and LMS100 MD aeroderivative gas turbines in the very near future.

Any barriers that must be overcome?

The talent gap is a big challenge. About 50% of North American and Western European engineers will be eligible to retire by 2015. So we have to build a new workforce. That means attracting, hiring, retaining and training the next generation. Manpower is an important component of our industry. We are working hard on this, with our hiring and training at record pace, but it will remain a challenge over the coming years due to increasing competition for talent.

What doors are being opened by information technology?

We have the opportunity to use the industrial internet to bring greater speed and productivity with equipment that has far greater computational power. What is known as Big Data* is the accumulation of vast amounts of data, much larger than anything we have ever seen before. But today, we have the capacity to perform deep analysis of Big Data and transform the way we do business.

What kind of transformation can be expected from Big Data?

We can harness Big Data to increase value to our customers. A small increase of only 1% in several areas such as efficiency, reduced emissions, uptime, safety and productivity can mean millions of dollars in profitability, or make it viable to exploit resources in remote regions and harsh environments.

Big Data can play a part in improving the economics of unconventional resources. If you can analyze geological and seismic data more rapidly and more deeply, you don’t waste time drilling at unproductive sites, for example. That’s why we are investing heavily in measurement and diagnostics technology in addition to lifecycle management.

What are your ongoing priorities?

We are focusing on the shale gas revolution which is really driving new demand. I’m very positive about it. We are working on technology to deal with this revolution that ranges across the spectrum from production to final consumption. As well as LNG, subsea and turbomachinery, we are also working to advance the state of the art in Compressed Natural Gas (CNG), Micro LNG and even entirely new spaces like transportation.

What other strategies are currently unfolding?

While we deliver our technology globally, we continue to invest locally outside of our main locations. It is vital that we can work side by side with customers. That’s why you have seen large GE installations spring up in places like Brazil, Australia and the Middle East. We are continuing this thrust with sites planned in places like Angola and Iraq. Between technology development and the establishment of new locations, GE Oil & Gas has planned to invest over $1 billion globally in 2012 and 2013. Our technology spend is doubling over the next three years versus the prior three years.

What do you see in the future?

The fundamentals surrounding this industry are extremely strong. However, collaboration is more important now than ever due to the technical challenges we face. We need to look beyond the traditional customer-supplier relationship to become partners in solving mutual problems.

* Data sets so large and complex that it becomes difficult to process using traditional data processing applications.