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Integration and digital is the name of the efficiency game 

Nov 14, 2018
4 min read
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Top experts at ADIPEC on Tuesday shared their strategies for improving operations and reducing costs - a conversation which continues to hold significance as companies come out of an industry downturn.

During the Global Business Leaders panel titled ‘Creating forward-thinking strategies, supporting upstream operations and market diversification’ integrating business units to gain operational efficiency and digital standardisation were key messages shared by experts. 

Abdulmunim Al Kindy, Director, Upstream Directorate, ADNOC said: “In production, we want to make a more profitable upstream and we’ve really thought about how to move an already efficient operation one step beyond.” 

ADNOC merged companies that were giants in their own rights, he said. “Some of the assets being managed are super giant, today the Zakhum field is the largest reservoir offshore in the world. And we’ve made significant savings on our operational cost.”  

Takayuki Ueda, President & CEO, INPEX Corporation said the company, working on Abu Dhabi offshore projects, is looking to integrate Upper Zakhum and Lower Zakhum by drilling from upper to lower to contribute to efficiency for ADNOC’s upstream gas project. 

Al Kindy said: “We’ve also thought of how we can make a step change in the most expensive cost driver in our operation and that is drilling and how can we turn around a company from basic drilling experience to an integrated drilling services company and how to do it in the quickest and most efficient way.” 

ADNOC recently announced a partnership with Baker Hughes, a GE Company, setting up an integrated drilling services company, done “simply to control the cost drivers of future wells and to gain immediate expertise in the development of our workforce,” Al Kinda said.  

Additionally, ADNOC this week signed the first unconventional concession with Total, which has given birth to unconventional in Abu Dhabi. “This is a major step, which comes after five years of de-risking gas and oil, to motivate a number of IOCs to seek an alliance with ADNOC. 

We had so many projects before which didn’t make commercial sense - until we did a lot of de-risking and built our experience in sour gas and today we have developed a reservoir of gas, which will hopefully bring 1.6 billion cubic feet of gas by 2024,” Al Kindy said. 

David Dickson, President and Chief Executive Officer, McDermott said he is also considering way to support customers integrate upstream and downstream business. 

“High CAPEX is going to put a stress on upstream and downstream parallel operations - CAPEX will be stretched,” he said. 

He also highlighted other challenges that will need to be addressed such as engineering experience. “In the downturn, we lost a lot of experience as people moved to other industries or simply retired. We have look at how to deal with that without increasing cost in order to remain competitive.” 

Dr Maikanti Baru, Group Managing Director, CEO, Nigeria National Petroleum Corporation (NNPC) said the approach the company is taking is keep costs low while increasing production from aging oilfield assets.  

Ueda said that while it is very important to reduce cost, as an upstream company, there are many pathways to take even within the digital realm. 

“People think Artificial Intelligence standardisation has a great impact but for me, on projects like Ichthys (Australia's LNG project), digital twin helped address issues before they arose. Huge infrastructure and data is put in the digital twin for analysis. I would like to use these in Abu Dhabi in the future,” he added. 

Dickinson also spoke about standardisation. “We went through a period of time of natural de-cost and now we’re at a turning point for a step change. We are in discussions with customers around standardisation - one of the thing that has been terrible in our industry,” he said, adding that embracing digital is a solution. 

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