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Oil and Gas Upstream
Asset Management During Volatility with Herman Nieuwoudt, IFS Energy Resources | Ep 335
00:26:08
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- [00:04]
A
Oil and gas production is the union of natural systems with advanced science and complex engineering. Smart people across the globe create this remarkable place we call Upstream. And each day brings a new challenge. This is the Oil and Gas Upstream podcast where we look at how these systems come together and learn from the people who make it happen.
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B
Welcome to Oil and Gas Upstream. I'm Elena Melkert, your host. Some of you know me as a former director for Oil and Gas Upstream research at the US Department of Energy. I retired from the doe, founded Energia Consulting, and joined the Oil and Gas Global Network as a podcast host. And we're recording in person at Sarah Week 2026. I want to appreciate my new sponsor, IFS Maximize Efficiency, reduce costs and enhance asset reliability with IFS SoftW, designed to support the unique needs of the oil and gas industry. And our guest today is Herman Nevote. Thank you, Herman, for joining us. Herman is the President of Energy and Resources at IFS Herman. Again, thank you so much for joining us.
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C
Thanks, Helena. It's an absolute pleasure to be here. And what a time to be at Sarah Week. Gosh, every time there's a Sarah Week, there's something happening globally that gives us a lot to talk about. And this time is no different.
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B
Yeah, yeah. We're March 24th, are we 2026. And it's just everybody can look up later when we publish a look at what was going on this week and just continues to go on. Yeah, it's really a special time to be in energy, especially oil and gas. My goodness. Okay, Herman, tell us a little bit about yourself and your background.
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C
I've been energy and resources all my life. Kicked off my life in mining, and then before I know it, I was on a. I joined the oil and gas industry. I went through the UK but ended up in the Middle East. Spent my time across Yemen, Kuwait, Abu Dhabi, Mauritania, Algeria, Tunisia, Libya, Central Africa, back to Europe and then into Houston, where I ran everything from rigs, production facilities all the way through to countries, regions and global product lines. So, always been very passionate about this industry. I'm so privileged to be with. IFS what they're driving, what they're leading and really trying to revolutionize the industrial scope of what we're doing. And it's such an important time for the industry to be able to actually take advantage of all the new technology that's coming out to make ourselves just a little bit more resilient.
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B
Absolutely, absolutely. That is the key to leadership and the key to life, I think, because nobody's life is going to be perfect. And for you to be able to get up and move on is really at the core of success. Any success on any level. Absolutely. Great. So your background is oil and gas all over the world. That's exciting. What got you interested in oil and gas? I know now as you're older and have had such experiences, you appreciate it more as I do. But. But in the beginning, what was your first exposure?
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C
I'm a geologist by trade. I had dreams of being Indiana Jones and started my life actually in the field doing exploration geology. And then soon after that, I actually wanted to make some money and got a real job, so I joined as a wireline engineer. And as that happens, you're out very quickly, early in your career, out in the middle of nowhere, leading people, leading rigs, as somebody in their early 20s. And it gives you a tremendous amount of experience and also a tremendous amount of knowledge of what the gaps are of our industry. And I think there's such a huge application for technology now to make their lives a lot easier than what my life was back in the day when I was in these remote places.
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B
Yeah, absolutely. Remote Pace we talked about Bakersfield. That's not actually remote, but it can feel like it is sometimes. Absolutely. So where in the US did you work for some of our. What are some of the reservoirs?
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C
I spent a lot of time in Houston. I spend my time up in the Permian in the Bakken and dj. Unbelievable. So a lot of the growth happening and the new technologies that came in that revolutionized the shale industry in the U.S. it's just unbelievable what they've been able to achieve. And it's all about the thought leadership. Not even the thought leadership, the experimentation that they went through, the trying new things. If it wasn't for the audacity of doing it.
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B
Courage. The courage.
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C
It almost borders on arrogance.
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B
Yeah, that's fair. That's fair.
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C
And I don't think anybody else, anywhere else in the world has that kind of push for innovation directly into our industry. But also, I think now it's time for the next revolution to take place, to extend the amount of production we can get, to manage our facilities a little bit better, to enhance the safety of our people. We're at that pivotal point now where the new technologies with AI and the focus on assets can really help us drive a bit more resilience into the industry.
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B
Yeah. So what exactly does ifs do for us? As you're the president of Energy and Resources for ifs.
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C
So IFS right now has a number of products in the oil and gas space, especially in the U.S. so we've got everything from Bolo, where we do accounting, all the way through production solutions with Merrick, where we've got about 50% of the US wellheads on our production platform. But beyond that, IFS is a leader in asset management. You've got a lot of investment in assets, and you want to make sure that those assets are performing at the best possible outcomes that it can with an AI envelope layered around it. IFS is the leaders across multiple industries. And that's what excites me about it, because the investment that is required to keep us going in this industry is so big, but the market is so volatile that getting that balance right and extracting the best performance that you can is absolutely critical. And just think about what happened to us in the last six years. In the last six years, we've been through a global pandemic. We've been through the rebound of the global pandemic where oil prices shot up, then we've been through a gas crisis with the Russia Ukraine invasion, then we've gone through an supposed oversupply, and now we're in a situation where the Strait of Hormuz is closed, driving oil prices back up. How do you manage your assets in such extreme volatility? Unless you've got a very unique, unified view of your assets? You can shift resources, you can have AI help you understand what the data is telling you, help you drive to the right decisions. I don't think that many other industries deal with that scale of problems with that type of outcomes. And that's what excites me about what IFS has to deliver. Because we really go in and we solve for the really tough problems where customers really struggle.
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B
Yeah, yeah. How do we put our mind around everything that. I guess that's the bottom line. You can't put your mind around everything that you're dealing with in terms of the challenges. You really do need some tools, some help. So what are some of those tools or how do you approach helping clients?
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C
So let's look at it from a broad scale. First, you've got to make the right investments. If you don't make the right investments, you won't get the right returns. A product like Copper Leaf, which helps with asset investment planning, that can take all those uncertainties, build it into your investment model to make sure you put the right money to the right places to get your best returns while building in all that uncertainty. Then you get into your actual asset management where you don't have this disconnected from that asset. You have actually a unified asset view of everything that you're doing. Everything from your work order management going in there all the way to how you dispatch your people to appropriately leverage those assets. How do you main do your predictive maintenance across that and then the inventory that is associated with that. All that built in together, followed by your asset performance monitoring real time visibility of what's happening to those assets so that you can prevent failures. Because when an asset goes down, that is just absolutely wasted money. And what better solution? When your field service person goes out there and they're looking at something, they might no longer have the 20 years of experience that the old timers have right now. They've got maybe a year or two experience. And for them to make the right decision at the right time is really difficult.
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B
It would be hard for anybody. And this is a complex situation. A lot of moving hearts.
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Absolutely. I've got a big extensive record in ofs. They've got hundreds and thousands, hundreds of thousands of parts and tens of thousands of different assets. How can you be an expert in all of that and how can you make the right decision around that asset to get it back up and running? And I'll give you a little story. I was in a desert in the Middle East. The only lifeline I had was a sat phone. Because of the unique way in which we budgeted our sat phones, it wasn't working.
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B
Sat meaning satellite.
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C
Satellite phones, yeah. I had a piece of equipment go down. Now here I am, it's me and my crew and the rig cost was running. A million dollars a day, every hour matters. I don't know what the problem was. All I know was it wasn't working. I couldn't phone a friend. Sat phone wasn't working. I would have loved to have something to help me troubleshoot, point me in the right direction, have the knowledge of every single circuit diagram of the entire piece of equipment that I had. Today that's possible. Today you no longer have to phone a friend. You can have your friend with you in real time helping you troubleshoot through AI. So that's the difference that we should be employing. Because look at our industry. 30% plus of people in our industry is going to retire by 2030. And it's not the people retiring, it's not the guys with no experience. It's the guys who's got 20, 30 years in this industry. So there's a huge. All that experience is going to walk out the door. And as we haven't really been Hiring so there's no Backup guys with 15 years of experience coming behind them. So what do we do? We have to change the way we think. We have to be adopters of technology to solve this problem. Otherwise we're going to be into the next crisis.
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B
I want to back you up just a little bit to the right asset. How do you know it's the right asset? And then we'll come back to the AI. So when you say the right asset, are you talking about this geological assessment of basin play at the macro level and then telescoping down into understanding what you've got? Help me with that. I'm not a geologist, but I believe geologists, so help me understand that piece.
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C
We account for geological risk, but we won't do what the subsurface modeling or the subsurface investigation. That is well covered with our industry. But out of that comes a certain amount of uncertainty. But with that, it's not just the subsurface uncertainty. It's how do I build my platform, how do I build my production facility, how much, how many pipelines do I need, how many compressors do I need to be able to manage all this uncertainty? Do I go and invest in this asset or do I go and invest in a different production platform? Do I channel my money into refineries? Because every operator never or no operator ever has enough capital to do everything. It's about making sure I spend my money where my biggest returns are. Because still today, cash flow for our customers is one of the key metrics that they have to deliver to their shareholders. So unless they invest in the right things, being IT platforms, wells, production facilities, basins, they don't know if they're making the right decision Unless they can balance that risk.
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Yes. Do you have to be a certain size company to be able to really appreciate everything that I have has to offer, or can Elena's oil and gas company benefit from such an investment? On my part in trying to.
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C
I don't believe that the size of an operator is directly related to the benefit of using technology. I actually think there's an advantage for small operators to get on the bus very quickly because they're very much in a day to day fight, they don't have the option of failure. They have to get the right decision from the first time. And they've got, because they've got so much pressure from whichever PE firm, angel investor, whoever it is, to go, you've got to get your investment right all the way through to major operators where they're balancing massive portfolios. Of so many decisions, how do you make sure that you're investing in the right thing? Not just the noisy thing, not just the trend, but you're putting your money really where you can get those returns.
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B
One of the premises of the Upstream podcast, this podcast is that not everybody in upstream is a subject matter expert in every aspect of upstream. How do we think about that? In terms of ifs, where do you come? In terms of the beginning, we talked about small investors taking advantage, the myriad of decisions that large producers would have. How else do you shape the solutions for people? What kinds of questions are the toughest ones for people? I hope I'm asking this question right.
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C
Yeah, absolutely.
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B
You help me out.
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C
Okay, so let's look at a scenario. Operators. Have operators come in, they're asking the questions of are my assets running optimally? Am I scheduling my people as efficiently as possible? Are they following the right processes and procedures to maximize the utilization of my assets? Do I have processes and procedures? And all these types of questions, they typically go unanswered. And people are so heavily involved in just in the day to day cycle, the tornado of running a business that they don't have time to pause and think about implementation of another system. And that's where we come in. And it really is, okay, let's keep doing what you're doing. Let us implement full asset management process so that you have those visibility, so that the noise dies down, so that you can see are you making the right decision. Because quite often if you're making a capex decision today, you find out if you're right three years from now, four years from now. And that's a very dangerous thing to do because we've got to take the guesswork out of it. Especially when you're dealing with so much macro uncertainty in our industry and don't expect there to be stability going forward. I think one thing that I've learned in my couple of decades doing this is I haven't seen stability. The volatility is something we have to accept. We've got to have the grit to go through it. But we have to make better decisions. And it's going to be interesting because in our industry you're going to have winners and losers. The winners are going to be the guys who adopt technology and make better decisions. The losers are going to be the guys who does the things they always do.
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B
If we now go to the AI story, what would be a vision of the future where you really were optimizing your assets and everything was going as well? Well, as I want to say humanly possible, but AI possible, what would that vision look like? And then take me back to what is the current common state of the art. I want to say not obviously AI is capable of more than we are taking advantage of, but what would be the most people are at this stage of AI, so what's the vision? And then where are we as an industry in that space? Because there's still a lot of gray hairs at the end of the stick.
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C
Actually. It's unbelievable. The acceleration of the capability of AI across just the last four months has been revolutionary and you can see it in the stock price of SaaS, businesses and all that. Everybody's been impacted. We can't even start to imagine how influential it's going to be. But one thing that is critical is for us to not look at the point of time of what it's capable of today, but the curve at which it's improving. So you're looking at a, you're looking at the rate of change rather than where we are today. So today you hear a lot of people talking about AI strategies. You talk about a lot of people about yeah, we're doing AI. That's not what we do. AI for us is a couple of aspects, right? One, AI is embedded in our enterprise asset management. It's embedded in our field service management. It's not an add on, it's not something that sits on top. It's part of the way we operate.
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Wow. Yeah.
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We've got agents that can go in and do your inventory replenishment. So think about an oilfield services business. They tend to order too many of the wrong things and they tend to have a whole bunch of equipment waiting on parts because they don't order the right stuff. That is a job for AI because AI can look at the demand signals, not the demand signals that is generated by some guy sitting somewhere, but actual real demand signals that is AI generated that comes in the system. It works automatically with the vendor to be able to do your inventory replenishment and then gets out into the warehouse, gets use AI logistics to put it on the right freight forwarder with the right shipping method to get there on time so the equipment isn't waiting. These are all small aspects of driving efficiencies, reducing your cash burn with inventory that nobody needs. So these are capabilities we have today and then I talked about the story previously. We've got a product called Nexus Black Resolve. Unbelievable. Where a technician can take a picture or a video or a voice note of a piece of equipment and Say this is broken, this is what I'm seeing, or this is what it's doing and takes a video of it. It will troubleshoot it for the person, tell it what it's wrong, open a work order, check inventory. If those parts are replaceable, ship it to the person from the closest location, give them work instructions to fix it so that asset can get back up and running. Now these are capabilities that a couple of months ago, two, three months ago, wasn't possible. It really is the adoption of these tools. You gotta be forward thinking of the adoption because otherwise this industry will run away from you.
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B
This case study that you just described, is that a real thing now? That's what ifs can do now.
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Yes, that is a real product now.
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B
Gosh, wow.
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C
It is. Wow. And the first time I saw it, I was blown away and I was like, man, I wish I had this when I was in the field. It would have helped me significantly. But that's just today we are continually partnering with some of the best AI houses, anthropic and the likes to make sure that we're state of the art. Because that's absolutely state of the art today. But we're not resting on our laurels. We're making sure that we remain cutting edge because tomorrow, next month, the next revolution is going to be coming out and we want our customers to benefit from that so that they get a competitive advantage, so that they can manage their way through volatility, so they can manage their way through the retirement that's coming in a couple of years time. Because nothing makes me happier than a customer that's very successful.
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B
Yeah, yeah. Just the notion that by having this assessment taken care of for you by the agent, I guess is a way to put it that frees you to think about other things. That's just one small system that the agent just analyzed and took care of for fixing for you and whatever that really frees you to think about more creatively, about what your goals are and how to achieve them and how to move forward. And then the agent can set up the how and who will do it and when and what they need in order to be able to do it and all of the above. That is so exciting. Not from a leisure point of view, but from an accomplishment point of view.
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C
But also think about it this way, if I'm able to take and you can't see my hands as audio, but quote unquote mundane tasks away from the field operators and the dispatcher's hands, that gives them a little bit more time to make sure that they're doing the job safely. Because still in our industry today, too many people get hurt because we're asking them to do so many things at the same time. Imagine if I can take a little bit of pressure, a little bit of burden away from them. By giving them the support of AI, they can take some more time to make sure that they're keeping themselves and their colleagues safe. Because we never want to. We still, in our industry, we hurt too many people. Too many people don't get go home in the same way they come to work. I do see AI by removing some burden, some pressure, some stress away from them, Give them a clear plan on how to execute, allowing people to take their time, make sure they remain safe, relieve some of the pressure.
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B
Yeah, absolutely. That really is important because we still have a gut, we still have a feel. There's still some things that you can't teach a computer yet. It's a very real thing. And our reaction time is, especially with experience, that you see something coming before it even has the data generated in order for the assessment, the agent to know what to do. Praying the human brain for those kinds of things is just. That's phenomenal. I just love that.
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C
Yeah. The way I'd look at it is, I'll tell you another story. I was fresh, I was maybe six months in, right? I was junior guy and I was working with a guy who was 20 plus years in the industry and we were logging a well. And he looked at the excuse, old grumpy guy, right. Kind of like me now. And I wouldn't say that he was looking at that. And he goes, oh no, this is going to fail. And everything absolutely was still green. Everything still looked fine to me, is that this is going to fail. He's okay, let's trip out. It's quicker to do it now and then change this one tool, then we can trip back in. It'll save some time. And I'm going, how did you know this? And it was because he was able to assimilate tiny, small things across multiple different data sources just from experience. Because he's seen it, he's seen it before. And as we got to surface, the piece of equipment failed. We were ready to change it. We're back in a hole in no time. How do I get that guy to sit next to every engineer on every location in the world? Just think of that impact that can have to have that safety net for all those people. And that's where products like Nexus, Black Resolve really comes in to the forefront. That's where your predictive maintenance comes in. From an EAM perspective, that is such a key aspect to the entire IFOs thought where we want to enable those people to be the best possible employees they can be.
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B
And that's the answer to my question, what is the future vision exactly? That is the safety and care of the workers and providing them with the tools, including other people's vast experience, to be able to make the good decisions in the moment. Yeah, that's fabulous. We are almost out of time. Is there something last you wanted to share before we end and close out the podcast?
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C
No, I just want to reiterate that customers is at the forefront of what we do. They're truly our partners and we want to make sure that we're solving their biggest problems that they have. We want to be in the war room with them. We want to be fighting the biggest fights with them to make sure that they are the best version of themselves that they can possibly be. And ultimately, when they choose IFS and we win together, that is what we're all about. That type of customer focus, making sure that they have the solutions today and tomorrow to make them successful.
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B
That makes me want to be a production engineer again. That's just so fabulous. Fabulous. Thank you. Herman Nebo, President, Energy and Resources at ifs. Thank you so much for being with us today.
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C
Thank you so much for having me. I had a lot of fun talking to you and I hope you'll have me back soon.
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B
Absolutely. I will definitely have to have. There's so much more to explore now that I have a better understanding of what we all do here at ifs. This is Elena Melkich, your host. Thank you all for joining us. More next time.
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D
Thanks for listening to oggn, the world's largest and most listened to podcast network for the oil and energy industry. If you like this show, leave us a review and then go to oggn.com to learn about all our other shows. And don't forget to sign up for our weekly newsletter. This show has been a production of the oil and gas global.