An aversion to risk, the race to be second, impairs the oil and gas industry’s ability to innovate.
Yet, the oil price slump, from mid-2014 to today, has been a “brutal wake-up call,” creating a realization that working smarter in a capex constrained era with rigorous opex could open the door to use of intelligent energy technologies, such as integrated operations, or IO.
The need to be bolder and perhaps more radical is pressing, says Peter Boyle, a leader within the UK Risk Advisory group of DNV GL, and a speaker at September’s SPE Intelligent Energy conference in Aberdeen, at which OE is a media partner.
As an example, DNV GL developed the Solitude concept – based on an unmanned FLNG operation. He says using a clean sheet and an objective driven design is the way forward, not working from the last best design and tweaking it.
He told OE more about IO and Solitude ahead of the conference.
What are the benefits of using IO to enable unmanned or integrated operations?
Removing people is a fundamental principle of inherently safer design. This in turn produces additional design, weight and cost savings.
With cost and complexity under intense scrutiny, the road to operations readiness demands even smarter approaches in today’s production environment. Integrating teams can overcome challenges when ownership of operations shifts between companies.
At a recent roundtable discussion in Norway, DNV GL brought together operations experts from new E&P players to discuss operations readiness. The general consensus was to recommend inclusion as early as the feasibility study and concept selection phase to ensure that operations perspectives are clear and included in the commercial framework for a project.
The Plenary Session at SPE Intelligent Energy 2016 will really explore this issue to increase understanding and get across the benefits of Intelligent Energy, Integrated Operations and Digital Oilfield to enhance performance improvement initiatives, particularly in greenfield projects.
Are there examples of where the industry is doing this well and proving value?
The subsea industry in particular is pioneering its minimal intervention strategy. In other industries, such as automotive, the use of data sensors to determine effective service activity is gathering pace, while further disruptive technologies in the form of the Google car will further step change IO use.
I’m looking forward to learning more from my peers on those successful examples at the exhibition and conference and how we can implement similar strategies to create value at all levels.
There’s still a reluctance to fully embrace these technologies, why do you think this is?
Innovation within the oil and gas industry is highlighted as lagging behind other industry sectors, and is dominated by its aversion to risk. Whilst there are many good examples of innovation being effectively deployed, the classic race to be second impairs our industry compared to others, e.g. the pharmaceutical industry where 4% of revenue is invested in R&D.
There is no doubt that the industry has had a brutal wake-up call with the oil price slump, the onslaught of tough market conditions, and ultimately the slow rate of recovery. However, there is a realization that working smarter in an era of constrained CAPEX and rigorous OPEX control demands full contributions from technology, resource planning, collaboration and, where possible, standardization. I believe the industry on the whole is now on that leaner, meaner and more productive path to revival.
What have the issues been in the past and are these now no longer a problem?
Cost implications now require the need to be bolder and perhaps more radical in extrapolating ideas from one industry and applying them to another. This is where lessons and learnings from SPE Intelligent Energy 2016 will really galvanize action in this area.
Using a clean sheet and an objective driven design to determine what could be used to achieve an objective rather than starting with the last best design and tweaking it has enabled DNV GL to rethink the FLNG (floating liquefied natural gas) concept, for example. Through a recent extraordinary innovation project, DNV GL developed a high-level concept called Solitude, based on an unmanned FLNG installation.
What needs to change within the industry to adopt these technologies?
For Solitude, an effective LNG market, as this is fast disappearing economically and unlikely to return more quickly than the oil market, though the Paris climate agreement and gas as an environmental stepping stone may alleviate this in the medium-term future.
Though currently a high-level concept, which has been widely embraced by the industry, many elements of Solitude can be implemented independently and some are already available. For example, operators control subsea installations and simple, fixed offshore installations from shore. With continuing advances, unmanned offshore installations are a natural development.
Peter Boyle is a leader within the UK Risk Advisory group of DNV GL. He is a chemical engineer with more than 25 years’ experience in the oil and gas sector involved in supporting customers in making decisions using risk techniques, throughout the North Sea and beyond. Peter is routinely involved in applying risk based methods on new developments to enhance their feasibility, remove uncertainties and in applying new methodologies or new applications of existing technologies in novel ways to encourage developments in moving forward.
OE is a media partner for SPE Intelligent Energy.
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