Name: Halliburton CEO Discusses Oil Prices and Company's Recession Recovery
Uploaded: 2018-05-31
Duration: 5 min 22 s
Description: Jeff Miller talks with Fortune's Susie Gharib about his company's future in a shifting energy landscape.

[ MUSIC ] Jeff, we can see things are really looking up at Halliburton just based on the newest rankings on the Fortune 500. Halliburton is now number 146 on the list, that is up dramatically From just a year ago where you were 173, what's the biggest reason behind that growth? First is to mark the recovery in North America, and I'll tell you the second reason it's really just the execution by Halliburton, and then we were early into the recovery and it's saying reallly strong performance throughout 17 and continueing in the 18. And certainly a higher oil prices have to be a big factor here. They're already above $ 71 a barrel. Where do you expect them to be over the next 12 months? I expect that it probably trades in a range in the mid, somewhere in the $ 60, the $ 70 range, which is good enough by the way. That is such a recovery from what we had in 14, 15, 16, what's encouraging though is that supply and demand look like it's back in balance. And so what you see is a little bit of reaction, at least today around unrest, globally. But the fundamentals are what seem to be in place and that's encouraging and gives me a lot of comfort that we trade in sort of this $ 60 range. Well, as you just said, there is considerable concern about Oil supplies coming out of the Middle East, especially from Iran, but also Saudi Arabia has been talking about deep production cuts so that it can boost prices. I mean, how soon could we see $ 100 oil? You know, I'm going to bet against $ 100 oil, and I don't know that that's healthy for anyone. Always could happen. But you always see happen when prices get far above sort of the norm, production comes on and it has a way of bringing price back into line over time. What about on the co- side of [ UNKNOWN ] oil field businesses? As you buy new equipment to keep pace with increased production especially in Shell, Will you have to raise prices for your customers? We have raised prices for our customers. And we're planning to continue to do that to really recover from what was the deepest downturn we've ever seen. And so, over the last three years as activity fell away and prices fell, there was a natural improvement or increase in prices that The entire service sector needs to stay healthy, and so, we're doing that. And we've been doing that over the last probably year and a half. You told analysts recently that you have a lot of cost pressures. You mentioned things like higher labor costs because the job market's so tight. You mentioned higher prices for steel. Railroad disruptions, high price of trucking. When you add all this up are you going to have to charge more your customers more because of all these other things beyond just the natural economics of the oil industry? Yes. We're seeing A tightness in the marketplace. I feel like how a burden is uniquely positioned to manage that but broadly speaking all of that cost becomes part of the equation. How much higher? Can't say you know it's one of those things that That we'll manage it as we go along. It's hard to say how much higher. Tell us a little bit about the new technologies that are coming to the oil business. Things like artificial intelligence, Internet of Things, data analytics. How much can these new technologies lower your cost? Well we think dramatically, and over time. And I think put so We're really excited about it at Halliburton and some of the things we are doing today or solving problems around maintenance. And, how to better utilize our equipment with big data. It has proven very powerful. When we drill wells we have to take a lot of data and the ability to Compute that quickly at a much lower cost is going to be impactful in finding more barrels. Where to place the bit when we drill underground, the ability to think at the bit as opposed to translate all of that data to surface. It will allow us to drill a more accurate wellbore. It'll be more productive over time. We're seeing that the energy indudstry's also making a shift to renewables, battery power, wind, solar. How interested is Halliburton into moving into that part of the industry? We're an all- services company, and so we're always Taking steps to reduce our own emissions, but we are going to stay in the oil fields sector in terms of oil and gas and being a services company. Well let me ask you this way, Haliburton is coming up on its 100 year anniversary. So let's say looking out five years from now. What will [ UNKNOWN ] look like? Five years from today they will describe [ UNKNOWN ] has the most collaborative oil services company that engineering solutions that lower their costs per barell oil equivalent. That is important. That is the value proposition of [ UNKNOWN ] today. And that is one that survives the different cycles. It makes us who we are. And so when I think about What we do with that value proposition is we deliver the highest returns in the industry. And so, there are parts of the market that we will enter over time, but only when we know we can make leading returns. [ BLANK_AUDIO ]

Halliburton CEO Discusses Oil Prices and Company's Recession Recovery

Leadership

Jeff Miller talks with Fortune's Susie Gharib about his company's future in a shifting energy landscape.