Petrobras’ insatiable deepwater production plays a significant role when it comes to driving global subsea systems demand. Elaine Maslin speaks with the firm’s subsea systems executive manager Cristina Pinho.
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Cristina Pinho, Petrobras |
As executive manager, production development and technology – subsea systems at Petrobras, Cristina Pinho has an enviable position. She’s line of sight on some of the world’s largest subsea developments – including the giant pre-salt, multi-floating production unit Libra project. She’s also working for a firm that has been a global leader in subsea technology development.
Today, the focus is, however, on cost. “Four years at US$100/bbl contributed to a vicious behavior in the oil and gas industry,” she told the Underwater Technology Conference (UTC) in Bergen, mid-June. “It’s time to re-think and pursue projects with break even at $35/bbl again.”
The industry will also have to work hard not to slide back into bad habits. She says projections suggesting project costs will increase 7%/yr from 2018-2023 as oil demand increases. “If this happens, cost will be at the same level as 2014 again. We should work to keep costs low, to at least the same level as 2006. How?”
It’s a tough question, but she’s been working on some answers, not least on Libra. Pinho, who studied mechanical engineering at the Federal University of Rio de Janeiro, became a manager of production operations for Petrobras in 1997, managing the P-07 and P-20 platforms. She’s held various roles, including general manager of exploration and production facilities and general manager of operations and maintenance. Pinho also holds two MBAs.
Petrobras is important for the global subsea market. South America accounts for 17% of global demand for subsea trees, Pinho told the UTC, with Petrobras accounting for 90% of that demand. Subsea scope cost is also important to Petrobras, amounting to 37% of project cost, she says.
Yet, while there are just four main subsea system suppliers, most with modern facilities in Brazil, the buyer market is fragmented, she says, which doesn’t induce industrialization or standardization.
In this context, Petrobras sees increasing productivity and reducing the total cost of ownership of subsea systems. It has been working on a continuous cost reduction program, PRC-Sub, since 2012, focusing on design engineering, operation, process safety, contracts and service level. It is similar to and follows another project focusing on well cost reduction (PRC-Poço).
On PRC-Poço, Petrobras found that well construction cost was driven by was rig time. “On subsea the most important element is the equipment, at 70% of the cost,” says Pinho, speaking with OE. “Flexible lines are a large part of Brazilian subsea production, so these were targeted, optimizing the subsea layout.” This includes using single lines for water and gas injection, saving some 132km of flowline being used on a typical subsea layout.
Overall, the cost reduction work has seen a 40% decrease in flowlines and other optimization applied on subsea equipment, she says. She said this was achieved through working with research institutes, suppliers, installation contractors, and others, and that Petrobras sees more potential by working this way. Other areas that could reap savings include reducing inspection and monitoring frequency.
On Libra, Petrobras and its partners are working on “Libra 35,” a project seeking a $35/bbl break-even price for Libra, something the firm has said is achievable.
The cost reduction work so far has saved Petrobras US$500 million across the business, with a forecast $4.5 billion expected to be saved by 2026. But to achieve a 30-40% reduction in total life cost, subsea systems need a different approach, Pinho says. This includes promoting the integration of different disciplines – reservoir, wells, subsea, topside, flow assurance – to generate options that can be evaluated in a fast way. Pinho says that Petrobras developed a tool to help evaluate options.
Petrobras already has the benefit of scale, she says. “We moved on standardized control systems for Xmas trees so now we can mix trees from different suppliers with control systems from different suppliers, giving us flexibility. But, there is room to move more profoundly on standardization of equipment. Now we have to do this,” she says.
Petrobras has been working with flexible lines for 30 years and has now made a standard “menu” of flexible lines and then tries to select from this menu. “It allows us to move to a different type of contract, to frame agreements,” Pinho says.
But, there’s a flip side to the standardization coin. “Sometimes we standardize the wrong things,” she says. This could be when moving to ultra-deepwater fields, with high-pressure and high-temperature, and just increasing the size of equipment. This very quickly turns into oversize equipment that’s difficult to install.
“We have to think differently,” Pinho says. “Today, what we really need is to be simpler. We need the size of things to be diminished to have safer installation.”
To add to the challenge, there’s a tight schedule. Petrobras has a lot of projects coming online in the next 5-10 years, Pinho says. The work will include making the most of suppliers and contractors, “especially when they are merging, making alliances, trying to get synergies.” This “new shape of the market,” is exciting for Petrobras, Pinho says. “As Petrobras, we should provide the right environment to make it happen – to be open to discussion to new ideas and solutions for our projects and to find a way to have companies participate from the beginning of a project.”
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The Libra EPS FPSO. Photos from Petrobras. |
The big project, of course, is Libra. It’s also a new frontier in terms of Petrobras’ approach, with partners and with suppliers, says Felipe Moreira Matoso Ribeiro Gomes, general manager for subsea engineering, Petrobras.
“I think it will be very exciting. To begin this project with other participants,” Pinho says. “We are starting the pre-salt again,” Gomes says. “And then use what we learn for the future.” Libra is being developed in a phased, or modular way, starting with an early production system, to know about the reservoir and flow assurance. Second semester 2017, Libra was due to start production from an early production system – the Libra Pioneer floating production, storage and offloading vessel, with one well.
But, it’s not all about reducing cost. There are challenges where new technology might have a place, however. “Recently, we are facing problems with CO2 (i.e. on Libra) and we are working hard with suppliers of flexible lines to find different solutions,” Pinho says. This could be new materials, include composites, Gomes says. “This is something we really want from industry, to prove equipment with composites,” Pinho adds.
Artificial intelligence, big data and machine learning could also help the oilfield. “We need to know more about these to understand how we can apply them in our operations,” Pinho says. “In the last five years, a lot of effort has gone into our integrated operation room, where experienced people work together, monitor the operation, and help with logistics and solutions when something happens. We are still putting energy into this, but it never ends. We should understand how we can manage integrated operations with the data we get from the fields and from our history, how we can have the benefit of all this. We have a mountain of data we can work with. We are starting in exploration, looking at what is best information to lower the risk of the exploration phase.”
Predictive maintenance, inspection work, monitoring, improving the productivity of tools will also all come under this scope, Gomes says. And it goes beyond software. Hardware like subsea robotics can play a greater role. “We used to inspect pipes with divers, we can now do this with tools and robots,” Gomes says. “And there is room for us to improve the use of robots, to be more predictable and efficient.”
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