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January 11, 2012 
Sutherland LTIle


2012 projections for global E&P capital spending call for a rise of 9.3% to a record $595B. If you're an IT company and want a piece of that action, you can't be technology focused, but instead industry-operations focused, says Merrick Systems CEO Kemal Farid.


We snapped Kemal in his Waugh Drive office yesterday with his 2011 Ernst & Young Entrepreneur of the Year award. IT in the energy biz is the art of taking complex measurements and communication and making it user-friendly. (You can see where his MIT graduate degree really comes in handy.) He says that even though it's arguable that the O&G industry is a bit behind in technology adoption, it's one of the highest tech industries in the world, globally producing 1,000 barrels of oil per second.

Kemal (with Thanh Nguyen and Ruknuddin Momin) says one place you're seeing major tech changes is in the instrumentation at the well head, well bore, and deeper into the reservoir, which provides sophisticated data on temperature, pressure, vibrations, and flow rates. One of Merrick's software tools, a hydrocarbon accounting system, does this and is used on about 20% of wells globally. (Multi-well fields require data to show how many hydrocarbons came from each well for engineering, financial, and contractual purposes.) Another feature that customers embrace is self-customizing software, which saves a call to the programmer. (Which is as much a relief to the programmer as it is to the user.)

No, that's not a coat button in Kemal's hand. Ten years ago, technology only allowed for monthly data to be analyzed. (Ten years ago, Lleyton Hewitt won Wimbledon and the Olympics were in Utah, a weird time for all of us.) But Merrick Systems and the energy industry are now utilizing RFID (radio frequency ID) technology, which can capture and send near real-time data. The tag shown in Kemal’s hand is much like a tollway windshield sensor and can be put on drill equipment, pipes, and risers to deliver cutting-edge info gathering. The difference is that this electronic bar code can survive 450° F and 30,000 PSI. (And our Hyundai Elantra can't.) Kemal also says web-based software will be increasingly developed and adopted in the oil field.

CenterPoint Energy recently awarded a GM Volt to Houston resident Mike Butler because he cut his electricity by 36% last summer with the help of his smart meter during the "Biggest Energy Saver" contest. (Smart meters allow utilities and customers to see a property's energy usage in near-real time and make adjustments.) Sharing in Mike’s excitement is wife Stephanie and Centerpoint Energy Division SVP of grid and market ops Kenny Mercado. As Texas sizzled with record-breaking heat, Mike and other winners significantly reduced their energy consumption; the top 10% of entrants in the CenterPoint Energy service area saved an average of 20.7% in electricity compared to same time period in '10. The campaign, the largest of its kind in the US, prompted 6,126 Texas residents to register their smart meters with the Smart Meter Texas Portal.

Will Rogers once said, “Buy land, they ain’t making any more of the stuff.” If that’s your sentiment, then the Interior Department has a deal for you, holding 32 additional oil and gas lease sales of public land this year. During 2011, the Bureau of Land Management held 32 sales encompassing nearly 4.4M acres. 1,755 parcels of land were offered, of which 1,296 were sold, generating about $256M in revenue for American taxpayers. The 2011 lease sale figures are 20% higher than those in 2010, when 1,090 parcels sold, generating about $213M. This year, parcels will be offered in California, Colorado, the Eastern states, Montana, New Mexico, Nevada, Utah, and Wyoming. The sales schedule appears on the Interior Dept. website.
America produces 5.4M barrels of crude oil per day, 164M barrels, per month, and almost 2B barrels per year. Flow your story ideas and photos to greg.miller@bisnow.com.
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