Photo: Steve Gonzales, Staff <\/p>\n
Vendors tear down their displays as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) <\/p>\n
Vendors tear down their displays as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) <\/p>\n
A closed sign on the registration desk as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) <\/p>\n
A closed sign on the registration desk as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) <\/p>\n
The NRG Center's carpet is rolled up as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) <\/p>\n
The NRG Center's carpet is rolled up as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) <\/p>\n
Down come the letters after the Offshore Technology Conference, which had attendance of just under 65,000. people. <\/p>\n
Down come the letters after the Offshore Technology Conference, which had attendance of just under 65,000. people. <\/p>\n
Vendors pack away their wares. The mood at the OTC darkened as oil prices, which started the week just under $50 a barrel, slid to $45.52 on Thursday. <\/p>\n
Vendors pack away their wares. The mood at the OTC darkened as oil prices, which started the week just under $50 a barrel, slid to $45.52 on Thursday. <\/p>\n
Workers roll up a carpet Thursday at NRG Center. OTC attendance has declined nearly 40 percent since 2014. <\/p>\n
Workers roll up a carpet Thursday at NRG Center. OTC attendance has declined nearly 40 percent since 2014. <\/p>\n
OTC attendance down as offshore loses its groove <\/p>\n
Attendance at Houston's annual Offshore Technology Conference, a bellwether for the oil and gas industry, fell for the third consecutive year, sliding to the lowest level in more than a decade as deep-water drillers struggle to match the country's budding shale recovery. <\/p>\n
Just under 65,000 people wandered the exhibits at Houston's NRG Park, down from 68,000 last year and 95,000 in 2015. Attendance has plunged nearly 40 percent since hitting a record 108,000 in 2014, the peak of the last oil boom. <\/p>\n
RELATED:Deep-water drilling faces shallow future <\/p>\n
The latest decline represents an inflection point for the conference and the offshore sector, which has become increasingly diminished as companies shift money, workers and equipment to Texas and other U.S. shale fields that are far less expensive to exploit. <\/p>\n
With analysts expecting oil prices to remain low for the next several years, many exhibitors and visitors said the halcyon days of record OTC attendance, over-the-top displays and expensive swag appear over - at least in the near term. <\/p>\n
\"The money is moving onshore,\" said Gary Fransen, sales manager at Houston oil services company Agar Corp. <\/p>\n
The annual trade show, billed as the world's largest energy trade show, kicked off Monday with a sense of optimism that the worst was behind the oil and gas industry and the recovery that began in the Permian Basin and other productive shale formations would spread to other sectors. The mood was noticeably more upbeat than the 2016 conference, which was just two months removed from the bottom of the downturn, when prices hit a 13-year low of just over $26 a barrel. <\/p>\n
The mood, however, became subdued as prices, which started the week just under $50 a barrel, slid to $45.52, the lowest settlement since November and just $1.20 higher than a year ago. Crude fell $2.30 a barrel, or about 5 percent, on Thursday alone over concerns of growing supplies in global markets - despite OPEC production cuts that went into effect earlier this year. <\/p>\n
Much of that concern arises from the growing output of U.S. shale drillers. <\/p>\n
To read this article in one of Houston's most-spoken languages, click on the button below. <\/p>\n
\"Producers are victims of their own success in getting oil out of the ground faster, cheaper than the market expected,\" Houston oil analyst Andy Lipow said. \"For the offshore world, it means they're on a longer time frame for a wholehearted recovery.\" <\/p>\n
Despite hopes that attendance would rebound after last year's plunge, visitors and exhibitors early on noted signs of another disappointing turnout. Traffic was light, and parking spaces were easy to get. Some major companies were absent. <\/p>\n
Tenaris, the giant Argentine oil and gas piping manufacturer, was back, but it pushed its steel for wells drilled in the North American shale basin. <\/p>\n
\"The OTC, it's the Onshore Technology Conference,\" CEO Paolo Rocca said. \"That's what we call it. It's onshore and offshore at this point in time.\" <\/p>\n
Houston-based Micro-Smart Systems, an oil field services provider that makes devices to measure well data, also said it is focusing investment onshore. But Micro-Smart has had a booth at OTC for two decades. Giving up the spot - as many companies did last year when oil prices hit rock bottom - would mean losing their premier location. <\/p>\n
Agar Corp., a 25-year attendee, made the same calculus. <\/p>\n
\"The growth is going to be onshore, but we are still here,\" Fransen said. <\/p>\n
There were notable absences this year. GE Oil and Gas, which is merging with the Houston oil and gas services giant Baker Hughes; FMC Technologies, now part of TechnipFMC; and Cameron International, now part of Schlumberger, all skipped. <\/p>\n
GE opted to give up its OTC booth in favor of a sponsorship that put the company name on lanyards and tote bags. The decision to give up the booth had nothing to do with the Baker Hughes acquisition, spokeswoman Stephanie Cathcart said. <\/p>\n
The amount of freight moved to the trade show - blowout preventers, valves, pipes, drill bits and frac trucks, as well all the trappings required for trade-show booths - fell by about 1 million pounds from last year, according to the movers. Attendance was the lowest since 2006, when just over 59,000 came. <\/p>\n
The challenge for the offshore industry now is to cut production costs if they are to compete in the \"lower for longer\" price environment, industry officials and analyst said. The biggest oil companies said they are doing just that by standardizing equipment and technology that can be used and moved to different platforms and rigs, instead of customizing each project. <\/p>\n
British oil giant BP has managed to make several Gulf of Mexico projects, including Mad Dog 2, profitable at $40 a barrel, compared with about $80 a few years ago, regional president Richard Morrison said. <\/p>\n
Chevron Corp. said it is working to collaborate better with other oil companies in deep-water development as a way to minimize costs. But in November, Chevron executives said that when it comes to new investments, the company's operations in the Permian get the first call. <\/p>\n
Despite the likelihood that offshore's recovery will lag behind land-based sectors, Neal Anderson, CEO of the energy research firm Wood Mackenzie, said that offshore drilling is far from dead. Deep-water operators have plenty of places to cut costs, although broad reductions have yet to happen. <\/p>\n
Not all companies will be able to rely on the Permian Basin, said Julie Wilson, a research director for global exploration at Wood Mackenzie, and some might find success with existing offshore projects. <\/p>\n
\"They still have to grow,\" Wilson said, \"and can grow profitability with good offshore projects that can break even at $50 or below.\" <\/p>\n<\/p>\n
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OTC attendance down as offshore loses its groove - Houston ... - Houston Chronicle<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Photo: Steve Gonzales, Staff Vendors tear down their displays as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) Vendors tear down their displays as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston. ( Steve Gonzales \/ Houston Chronicle ) A closed sign on the registration desk as the 2017 Offshore Technology Conference (OTC 2017) officially closed Thursday, May 4, 2017, in Houston Continue reading