Oil-service companies are trying to gauge technology development's potential contribution to total returns. "It's technology that's central to the value of the products that we and the rest of the service companies offer," Doug Rock, chairman and chief executive officer, Smith International Inc., said at the annual Banc of America Securities energy investment conference. "Technology development really is a judgment. Even if you make a decision, you could develop something only to discover that someone else has come up with something similar and cheaper. So you look at where the value and cost structure are, and then move ahead." "The key word is judgment," added Bernard Duroc-Danner, chairman, president and CEO, Weatherford International Inc. "You also have to use common sense. Ask yourself how big a technology's impact will be. How proprietary is it? Does the contraption actually work? What kind of mechanical challenges must it overcome? Are you asking it to do triple back-flips in a confined space?" Other oil-service executives cited technology's role in their companies' strategies during the conference. "We are never satisfied unless we are doing better than our competitors," declared George Boyadjieff, chairman and CEO, Varco International Inc. "We push technology because we want to be the guys who change the game by trading shares with less capital and equipment. "Some companies will tell you that more and more rigs will be needed to complete wells. Varco is looking for ways to use fewer units, such as flex rigs, to get the job done. They will set the standard for drilling because they will do the job faster and be more efficient than the last generation of rigs." Environmental conscientiousness is the latest driver of technology, according to Rock.

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