Why Offshore Drillers Need Artificial Intelligence to Remain Viable

Robotics are making headlines these days, and the drillers should be paying attention if they want to be more profitable.

Apr 26, 2014 at 1:24PM

Speaking recently with contacts at Reuters, I was reintroduced to Schramm, a company tapping innovation in advanced robotics that can literally move an oil rig from drill hole to hole -- yes, a walking oil rig if you will. Since reviewing the recent strides, no pun intended, Schramm is in fact making drilling faster, quicker, and even safer. I can't help but think Transocean (NYSE:RIG) and Nabors Industries (NYSE:NBR) need to be paying much more attention to new technologies since the advancement of robotics and artificial intelligence (AI) will likely disrupt their business models. 

Between the two names, I do believe Nabors is embracing new technology and innovation in drilling more than Transocean. For instance, the company has been tapping software to boost drilling efficiency in a move to elevate safety by automating more and more of its drilling process. With that said, Nabors has the largest onshore rig fleet. Transocean has the opportunity to tap unmanned robotics to modernize its offshore rig fleet, especially since companies such as Apache, Statoil (NYSE:STO), and National Oilwell Varco (NYSE:NOV) are increasingly seeking higher alpha in remote offshore locations, areas typically extremely dangerous for human workers. 

Cutting costs and boosting efficiency are major focal points for E&P companies trying to offset risk and safety concerns from hazardous but also rewarding exploration opportunities. Rig makers should look to adopt and possibly outright acquire the companies and the IP that are challenging their future way of doing business, especially since robotic rigs may help drive rig day rate costs down substantially in years to come. 

Considering there is plenty of rig availability these days from Transocean, Hercules Offshore, and Diamond Offshore Drilling, E&P companies clearly are delaying projects and holding out for more efficient rigs that are less expensive. This should serve as a wake-up call for rig makers that the old way of drilling needs to be modernized. 

The oversupply of rigs will likely reverse in the next 24 months, but innovation may help redefine what is needed from customers by then. That means Schramm, along with companies like Robotic Drilling Systems (unmanned land and deepwater industrial robot) and Drilling Structures International (walking systems), could be all be acquisition targets of rig makers. That is, if they aren't already. 

Another way to profit from a more modern offshore drilling industry
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

 

John Licata has no position in any stocks mentioned. The Motley Fool recommends National Oilwell Varco and Statoil (ADR). The Motley Fool owns shares of National Oilwell Varco and Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers