i wouldnt disparage the technological breakthroughs that have accompanied tight-rock oil production. There have certainly been many important developments but the SI article was hitting the fact that much of the decrease in drilling and production costs is because the service companies have slashed pricing in order to gain or maintain market share. Effectively what Saudi Arabia and Iran have been doing.
When shale exploitation was starting to take off in late 2000s SLB execs were crying that there was no technological useage (at least the relatively expensive technologies SLB offered). Producers were playing run and gun, i.e. drill, frack, repeat and produce those that do produce. Worries about where to frack along a well didnt seem to exist in many companies. Some companies did have a more nuanced approach to their completions but there were relatively cheap technologies available to meet those needs. As an example, SLB committed a major foobar by believing that Geoservices mud-gas sniffing technology could compete in the shale gas market. Problem was that service cost many times more, required multiple SLB bodies, and had a huge footprint. Competing technologies (which already existed) utilized the driller's personnel and facilities and cost a fraction of SLB's so nobody used SLB's product in shale (somehow the geniuses that pushed this as part of the rationale for buying Geoservices still have jobs in SLB).
As an example of the price slashing going on: i had a client recently who had some work done by SLB and there was no request or discussion of discounts prior to having the work done. When the bill was submitted to the client it included a huge discount. Made the client happy but I was shocked.
AI
