Pipeline Magazine - InterviewsInterviews-RSS FeedFri, 28 Aug 2020 03:00:08 GMTThe future of refininghttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/the-future-of-refining/Wood Mackenzie's chief analyst Simon Flowers asks Wood Mackenzie's head of downstream oil about the future of the downstream sector and what will be refining’s long-term challenges when oil demand eventually enters decline2020-08-18https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/the-future-of-refining/https://www.pipelineoilandgasnews.com/media/1797038/simon_flowers_1.jpg

By: Simon Flowers, Chief Analyst, Wood Mackenzie

Refining was rejuvenated in the early years of this century. Overcapacity and depressed margins forced refiners to focus on costs and managing for margin. Proof of success was the resilience of refining profitability after the oil price crash of 2014, and the elevation of downstream leaders to the very top of Big Oil.

The current downturn is tougher than any experienced before, and may even be providing a glimpse into refining’s long-term challenges when oil demand eventually enters decline. I asked Alan Gelder, Head of Downstream Oil, and Gerrit Venter, Corporate Analysis, how the industry will respond this time.

How has the crisis affected refining profitability? 

It’s been brutal – our global composite gross refining margin averaged a paltry US$0.20/bbl in May and June. The US$1.40/bbl we forecast as an average for 2020 is down from U$3.70/bbl last year and is the lowest this century. These depressed numbers reflect the devastating economic impact caused by COVID-19. Oil demand fell by more than 20 million b/d in the two months to April, temporarily wiping out 20 years of demand growth.

When will market conditions get better?

We are already seeing oil demand bouncing as lockdowns start to ease, led by gasoline but with jet fuel lagging. It’s not going to get back to the pre-crisis growth trend for some years – our latest Macro Oils global oil demand forecast for 2021 is 3 million b/d below our pre-crisis forecasts. There was over-capacity in refining before the crisis; lower demand just makes it worse. Compounding that is the excess product (and crude) inventory built up during Q2 2020. Inventories won’t fall back to normal levels until well into 2021.

Margins should begin to recover as the oil market rebalances over the next 18 months but will stay at modest levels. We expect the global composite margin to average US$1.40/bbl in 2020, then US$2 to US$3/bbl through 2025 – 20 per cent down from our pre-crisis forecast. That’s little more than half the US$4.40/bbl average of the last decade.

What can refiners do to get through the downturn? 

The severity of the downturn has caught everyone out. Short term, liquidity is critical for survival – the high working capital needs of refining are a real challenge for smaller independents. Higher cost players are going to struggle. The industry already runs a tight ship and managing for margin is still the mantra. Investment is already being slashed, and more efficiencies will no doubt be eked out. Any opportunity to use slack in the market to bring forward planned maintenance will be seized.

Global utilisation rates dipped as low as 65 per cent in Q2 and are set to average around 70 per cent in 2020 – the lowest in living memory. As demand recovers, refiners need to be operationally adept. This downturn is different to any experienced before – market conditions are fragile and vary from location to location while product demand is skewed. Getting utilisation rates back to profitable levels – the global average of just under 80 per cent this last decade – will take time and a delicate touch. Over-exuberance risks flooding the market with product and undermining margins.

Could we see refiners aggressively rationalise portfolios? 

Yes, there’s a high probability the crisis will accelerate a process that was unfolding gradually as integrated oil positions for the energy transition. Shell has just cut its mid-cycle refining margin estimate by 30 per cent. Some refineries will close – we reckon almost 10 per cent of high-cost refineries in Europe, 1.4 million b/d of capacity, is in serious threat of closure in Europe alone over the next three years.

The Majors will sell more downstream assets – including refineries – to strengthen balance sheets weakened in the downturn and to boost portfolio resilience. Portfolios in future need to be focused around advantaged assets: positioned close to the growth markets in Asia and the developing world; large scale, modern, low cost and low carbon-intensity; and closely integrated with crude feedstock and petrochemicals.

BP sold its petrochemicals business for US$5 billion this week, because it wasn’t advantaged – there was limited scope for deep integration with the rest of its business.

Who will buy the unwanted assets?

NOCs and niche players. A number of Middle East and Asian NOCs are long crude production/short refining and want to strengthen downstream exposure. Niche players, perhaps privately owned with lower ESG thresholds than IOCs, will also be sensing a value proposition at the low point of the cycle. 

This column first appeared in the August issue of Pipeline Magazine

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Finding resilience during the COVID-19 crisishttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/finding-resilience-during-the-covid-19-crisis/Martin Helweg, CEO of P&O Maritime Logistics, spoke exclusively about the impact of COVID-19 on the offshore sector and how the newly merged company has found resilience during the pandemic2020-08-16https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/finding-resilience-during-the-covid-19-crisis/https://www.pipelineoilandgasnews.com/media/1797399/martin-helweg-cover-1-web.jpg

Martin Helweg, CEO of P&O Maritime Logistics, spoke exclusively to Julian Walker about the impact of COVID-19 on the offshore sector and how the newly merged company has found resilience during the pandemic 

How will the COVID-19 pandemic change the future of the offshore energy sector?

As we continue to face the most significant global crisis of our lifetime, our industry and others alike, face a growing set of challenges, some which could be planned for, others less so. Amid this pandemic, we must adapt quickly and make sense of the rapid geopolitical, social, and economic shift unfolding globally.  One such change which, without a doubt, will shift the industry, is the histrionic drop in oil prices, the lowest in history.

With Brent Crude at an all-time low, driven in part by the dramatic fall in consumption, oil majors and supply chain companies are presented with a unique set of challenges. For example, since the start of the pandemic, oil companies had to cut activities significantly - leaving a huge negative impact on service providers and supply chain companies. An oversupply of vessels and a dip in demand is catastrophic to many OSV players, some of whom were playing catch up even before the crisis.

Volatile oil prices have also meant a drop in demand from an investor perspective. This has meant that investors are now turning to other opportunities. This cycle adds pressure to oil companies as they scramble to cope with these new realities, which will shift the industry for decades to come. Essentially, this forces oil majors and supply chain businesses to change the way they operate. Those who succeed will be the ones with the most exceptional agility in changing business models and strategies.

What has the impact been on P&O Maritime Logistics operations?

The extent to which P&O Maritime Logistics has been affected by COVID-19 results from our ability to take the cost of the business, and offer more value with fewer resources. In a volatile industry such as ours, P&O Maritime Logistics has long been working towards a business model that reflects innovation, incomparability, and efficiency to capture more entities of the supply chain at reduced capital expenditure. As a result, our financials are holding up well.

We have also done lots of work in the past to plan for emergencies. Going into the pandemic, we had an Emergency Response/Business Continuity (ERBC) plan that was flexible and well-circulated throughout the business. As details of the spread of COVID-19 became clear, we were able to adapt this plan to meet the changing COVID landscape swiftly. We are currently working with the fifth iteration of our ERBC plan at the corporate level, and some of our business units are working with a 10th version as teams adapted the procedures to fit their local requirements. Having an existing ERBC plan in place has meant we were several steps ahead at the beginning of COVID-19, and this preparation has allowed us to continue with most of our operations throughout the crisis.

However, that is not to say that COVID-19 has not impacted the business. Our seafarers have experienced extremely tough conditions, working out on the oceans without the opportunity to return to their families for many months. Our ability to effect crew change has been severely impacted: while we have been conscious of keeping everyone informed of what is, or in this case, is not happening, we have been met with nothing but dedication and loyalty from our crews. We are primarily a people business, and our human capital consistently proves to be our most valuable asset. It has been tough, but our team has proved more valuable than ever, securing the energy supply chain and delivering critical supplies around the world. Without them, delivering for our clients would have been much more difficult.

You must have been glad that the merger was completed when it was?

Very much so – the combined forces of Topaz Energy & Marine and P&O Maritime under the DP World umbrella have given us incredible resilience during the COVID-19 crisis. DP World already owned P&O Maritime when they acquired Topaz in 2019. Both companies were strong, with an extensive market profile, and so we are enjoying greater financial strength that allows us to navigate challenging periods.

The merger has also allowed us access to increased investment in both the fleet and in technology and innovation, to the benefit of current and future stakeholders. This translates to an excellent deal for our employees and customers. Being part of a world-leading group such as DP World ensures that we will continue to be an employer of choice for talented individuals and will bring greater strength and benefits to our customers.

Despite the crisis, we are still looking towards growth. As our clients’ demands evolve, we are adapting our service-led offering to stay at the forefront of industry needs and remain as the preferred provider of marine logistics services and solutions. The merger of Topaz and P&O Maritime has increased our focus on providing end-to-end logistics solutions. Throughout COVID, we have been able to focus on delivering large-scale, bespoke services in collaboration with our customers and partners.

How is your embrace of digital technology going to help you navigate the new energy landscape in the post COVID world?

A central part of our evolving business model is digital transformation, and digitalising our business has been critical to us for a long time – long before COVID-19 emerged. We are already capable of collecting and processing data in real-time from our offshore operations, while also connecting our offshore and onshore personnel. We are even assisting some of our clients in their business continuity efforts with the technology we can provide.

Now that we are five months into the pandemic, adapting to handle this new landscape is proving quite seamless. Our advanced technology has meant that we have been able to continue delivering across industries during challenging times – be it within one segment such as offshore or port services, or a logistics offering. By understanding each customer’s changing needs, and drawing on our maritime heritage, technology has given us the ability to offer our customers the same value of services, without disruption.

Being part of the DP World Group, we are uniquely positioned to weather this storm and to continue to deliver value for our customers and our shareholders alike – and to add to DP World’s incredible vision of being an enabler of digitalisation within global trade and, now also the energy sector.

How are you focusing on operational excellence?

Ensuring operational excellence is something we have questioned extensively throughout this challenging period. We have reviewed all our tools and adapted them for new working conditions – e.g., tools that were meant for use in person, have been adapted to work in a virtual environment. We have discovered ways to conduct virtual Management Vessel Visits, virtual audits – both internally, and externally with ABS - and held virtual Town Halls with our teams around the globe.

We have made sure that we continue to execute and conduct these visits, audits, and meetings as usual, because now it is more important than ever that we not only stay consistent in our communications and performance but also maximise our connectivity. As a result, we have ended up with a whole new set of tools at our disposal, by merely adapting what we already had in place. Our clients participate in many of these events, and the feedback has been very positive.

Going forward, we know that we can deploy our teams anywhere, virtually or physically, and be able to have a cohesive, functional business. We treat each vessel as another business office, providing them with the tools they need to operate, and fine-tuning and enhancing them with every use. This capability is to ensure continuity in energy and supplies across the world – where people need resources, now more than ever.

How will large-scale marine operations work in a post COVID world?

All large-scale marine operations must adapt to use technology effectively to drive efficiency in a post-COVID world. I believe P&O Maritime Logistics is already there, and I would like to encourage the rest of the industry to do the same. I want to share our findings and learnings so that the rest of the industry can innovate: one of the ways we can do this is by ensuring we share a common set of data standards to provide further value to all of our customers.

We have launched a website to do just that. MaritimeStats.com provides a single, open-source platform for vessel operators to share data and collaborate on solutions that actively improve the safety, sustainability, operational excellence, and technical reliability of seafarers and vessels across the globe. All the data is free to access, and as more data is contributed to the site, we are hoping to see large-scale marine operations work more collaboratively in whatever ‘new normal’ emerges.

Fundamentally, the industry must embrace data-sharing to strengthen its capacity to cope with an extended economic downturn and to endure global issues on an unprecedented scale. If industry players continue to operate in isolation, they will not survive in a post-COVID world.

Will the aftermath of COVID see a great adoption of digitalisation?

Focusing on innovation, proactivity, and control are critical pillars for all businesses in our sector to weather the current storm. Change is inevitable – change in technology, organisational structure, and strategy. By adopting a truly transformative strategy, maritime businesses can deliver on technology’s potential – and succeed in radically altering our industry. Indeed, I hope COVID acts as the impetus other businesses in the sector need to adopt more digitalisation.

P&O Maritime Logistics is driving sector-wide change, and we inherently believe that the last 4-5 years in the OSV industry have created structural changes in the market. Since 2012, we have increasingly moved further away from our older strategy as a vessel operator, and we accelerated those change strategies at the outset of the current downturn in anticipation of a brighter, more digital future. Our transformation was tough, and it will now become tougher as we cultivate adaptability and put in place new norms for our businesses. This is a true test of our preparedness to survive and highlights the strength and character of our employees.

This interview appeared in the August issue of Pipeline Magazine

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Getting ready for the next digital wave https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/getting-ready-for-the-next-digital-wave/Bjorn Ewers managing director & partner from Boston Consulting Group discusses how more and more companies are positioning themselves for the digital wave2020-08-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/getting-ready-for-the-next-digital-wave/https://www.pipelineoilandgasnews.com/media/1795910/28-30-bjorn-ewers.jpg

By: Bjorn Ewers, Managing Director & Partner BCG, Jean-Christophe Bernardini, Partner and Associate Director BCG and Marinos Constantinou, Consultant BCG

Are companies ready for the digital wave?

More and more companies are positioning themselves for the digital wave, while some are already fully prepared. Operators such as Shell, Equinor, and BOP are ahead of the field in exploiting the benefits of digitalisation, and readiness to do so is characterised around five main pillars.

The first is a value-driven mindset, which is the ability to define problem statements and solutions with a focus on value generation rather than good-to-have technical improvements. Second is the capability to develop ideas quickly through minimum viable products and agile methods, as such approaches accelerate value generation and allow companies to eliminate non-value adding ideas faster. The third pillar is fit-for-purpose data governance and IT architecture, which is needed to enable the delivery of robust and stable digital solutions to ensure user adoption and value delivery.

Next up is a digitally-enabled operating model, which is crucial in ensuring that the digital solution is embedded in the operating rhythm and generates value without creating more work. The final pillar is a value-tracking mentality, which is also essential. This revolves around being committed to tracking value generation consistently to apply a self-funding approach for scaling digital solutions and identifying initiatives that need to be stopped. More often than not, the main challenges for companies are being able to scale MVP’s to business unit and company-wide level. Ultimately, scale requires mastering these five pillars.

How is the oil and gas landscape changing through digital technology?

Digital technology is enabling the industry to undergo a fundamental transformation. Oil and gas companies tend to be data-centric, and operators are now leveraging the full power of data integration and analytics to make the fastest decisions possible. The transformation is occurring through three main pillars, the first being the operating model and philosophy. We are seeing more and more companies shifting towards unmanned operations and campaign mode interventions because the significant cost reduction achievable through leveraging digital technologies is being realized. Equinor is a prominent example and the development of Oseberg H, which will be the first fully automated offshore platform.

It is important to appreciate that with the current market conditions due to COVID-19, there has been an underlying need for operators to transform their operating models. Digital is a key enabler to drive necessary change as it reduces costs and exposure risks – limiting the amount of hours personnel spend on production sites, reducing the numbers on production sites, and accelerating the development of unmanned facilities.

The second main pillar is the required profiles and competencies impacting the organisational structure. According to OPITO’s Skills Landscape 2019-2025 report, it is estimated the oil and gas industry needs to attract 25,000 new people, and 4,500 of those will be in entirely new roles that don’t currently exist in areas such as data science, automation, and new materials.

And finally, transformation in the way data is utilised by oil and gas operators forms the third pillar. As previously mentioned, oil and gas companies tend to be data-centric, because the nature of the industry has always been data-centric with a focus on data acquisition for physical modelling to predict and optimise field performance. That being said, this was primarily done on a discipline basis and data was used for specific modelling. Through digital technology, operators are now leveraging the full power of data integration, contextualisation and analytics, generating a multitude of insights that are focused on taking faster decisions on disciplinary and multi-disciplinary levels.

How will the digital oilfield improve the workflows of operators?

The digital oilfield will improve the workflows of operators in several ways. At this moment in time, a plant generates a tremendous amount of information, which ultimately creates more confusion, rather than helping decision-makers to act. With digital solutions, they can be leveraged solely to provide relevant and useful information, which will accelerate decision-making and value generation. This applies to every level of an organisation, from managers to control room operators, and is especially true for troubleshooting in operations as the response time of operators can significantly affect production on a daily basis.

Another impact of digital solutions, and most likely the greatest, will come from breaking down the traditional oil and gas siloed workflows. Data contextualisation and collaborative tools across organisations can ensure teams focus on value-adding activities, rather than process-driven activities in design and execution timeframes. This applies to large coordination environments in particular, such as offshore operations. Imagine a campaign or shutdown that involves cross-entity collaboration, including maintenance, inspection, drilling, wells intervention, base operations, and engineering and construction. An operation such as this can be scoped and scheduled in a single tool that leverages synergies across the participating entities. Innovative solutions can increase synergies by sharing resources and boosting productivity by 10-20 per cent in some cases.

Moreover, digital solutions will also provide transparency on personnel and field performance, expose inefficiencies, and concentrate on value-generating workflows or identifying and eliminating inefficient processes. This has significant potential for cost reduction by optimising workforce and vendor utilisation across entities.

What are the main technology components of a digital oilfield?

There are three main technology components that will deliver the most value for digital oilfield operators. Automation will serve as the fundamental basis in two dimensions. Firstly, strong monitoring capabilities on which to build further digital solutions leveraging modelling, machine learning, and AI solutions. Secondly, excellent remote-control capability, which will be the catalyst in moving towards unmanned operations and reducing costs and health, safety, security, and environment (HSSE) risks. 

Next is Digital Twin technology. Besides offering a stable and realistic modelling basis on which to develop multiple value-driven use cases, it will represent the physical asset’s real condition at any point in time. The industry is already moving towards this technology with significant momentum, spearheaded by Shell’s Digital Twin of the Nyhamna gas facility, Equinor’s Johan Sverdrup field, and BP’s APEX in the North Sea.

Thirdly, machine learning and AI solutions will be crucial in providing the technological advantage over traditional physical modelling. These will enable much deeper insights at a fraction of the time, but more importantly, they can give predictive capabilities for solving problems before they arise. An array of predictive maintenance solutions are already in place within the industry from established service companies such as GE and AVEVA, as well as data-analytics specialist companies such as SparkCognition.

What advantages can technology offer in terms of efficiency?

Digital technology can bring about efficiency across all value levers within an oil and gas operation by increasing production, reducing OPEX and CAPEX, and improving HSSE performance. At BCG, we have worked with clients who have, through leveraging digital technologies, achieved increases in production up to two percent and reductions by as much as 10 and 15 percent in OPEX and CAPEX, respectively. Moreover, BCG analysis shows that digitally mature operators drive higher value, enjoying up to 30 percent lower break-even prices and up to three times higher free cash flow.

With regards to production, efficiency can be driven by modelling the integrated production system from reservoir to export and providing a common platform for all disciplines to address production optimisation. Identifying bottlenecks within the chain also bring about efficiency through production uptime, and systems such as BP’s APEX and Shell’s Production Universe are prime examples of such efforts.

In terms of OPEX, the majority of efficiency gains will most likely come from reducing maintenance costs. Systems such as SAP and Maximo have been established in the industry for several years, and SCADA and Historian systems provide the perfect basis from which to leverage machine learning and AI methods to predict failure. This allows organizations to streamline their maintenance philosophy and strike a cost-optimised balance between time-based, condition-based, and predictive maintenance.

Meanwhile, CAPEX efficiencies will primarily be realised on the detailed design and execution phases, particularly through the digital twin technology. Faster decision making and clashes identification will substantially accelerate both phases, delivering cheaper projects and unlocking resources previously too costly to produce. Equinor’s Johan Sverdup project is a prime example, with digitalisation saving at least one month of the execution phase.

It is worth pointing out that HSSE practices will also be enhanced tremendously. By providing transparency across operations, risks will be identified well before work execution, limiting incidents, delays, and increasing focus across the organisation. New and exciting technologies, such as natural language processing, are now in play in the area of predicting incidents, as is drone technology, which is now widely used within the industry for inspection to limit personnel exposure. 

This interview first appeared in the July issue of Pipeline

Bjorn Ewers

Jean-Christophe Bernardini

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Digital oilfields are changing the oil and gas landscape https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/digital-oilfields-are-changing-the-oil-and-gas-landscape/Schneider Electric's VP of Oil, Gas and Petrochemicals discusses why digital technology is helping change the oil and gas landscape2020-08-10https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/digital-oilfields-are-changing-the-oil-and-gas-landscape/https://www.pipelineoilandgasnews.com/media/1797390/georges-schneider-electric-web.jpg

Georges EL MIR, Vice President - Oil, Gas and Petrochemicals Schneider Electric spoke to Julian Walker about why digital technology is helping change the oil and gas landscape

How is the oil and gas landscape changing through digital technology?

Digital technology is providing the oil and gas industry with the right toolset to address the challenges it is facing around efficiency and sustainability. By making data available and by breaking the siloes across their organisations, the digital technology adopters have become more agile and are better equipped to drive faster decisions that impact positively their business. The most resilient companies are the ones that have adopted digital technologies and these companies will be the winners going out of the current crisis. In a lower barrel price environment, oil and gas companies must reduce CAPEX and OPEX spending while increasing reliability, safety and sustainability. 

How will the digital oilfield improve the work flows of operators?

Digital solutions provide oil and gas operators with knowledge and anticipation of assets’ performance using very sophisticated yet effective machine learning algorithms. Real time consistent information empowers the operators to make the right decisions and actions for each well. For example, artificial lift digital control and monitoring with edge analytics allows detection of possible future failures, hence enabling maintenance planning, optimising logistics and man-hours and most importantly reducing downtime. Another example is Digital Mobility solutions that automate and digitise maintenance routines, reducing time for routines tests, reducing paper work and optimising maintenance team. Dataflow between siloed systems becomes seamless with new platforms. This allows efficient information exchange between all the teams and as such improving processes and workflows.

What are the main technology components of a digital oilfield? 

Digital transformation is not only about technology, it’s about technology, process and people and must create business value like improving efficiency, increasing profitability and improving safety and sustainability. Digital oil fields address areas like operational efficiency, production optimisation, collaboration, decision support at operator and enterprise levels, data integration and workflow automation. While one of the important steps is connecting the wells and making different sets of data available for the scattered wells, transforming this data into advanced analytics and insights and making it available to the right teams is where the value stands. These insights will enable higher levels of collaboration among the various disciplines and empower the operators to make decisions with stronger business impacts.

A digital platform like EcoStruxure for Oil & Gas interconnects the different technology layers described as (1) sensors and field devices generating data, (2) the edge controllers including the control and scada systems and (3) the software, analytics and applications. This enables the flow of data and insight creation to be shared among the different disciplines and provides the foundation for asset management, energy management, production management, well management and supply chain management. This has to be done on a cybersecure platform, on premise or on the cloud, the latter being a great collaboration enabler.

As an example, machine learning solutions like EcoStruxure Autonomous Production Advisor of Schneider Electric provides artificial lift well failure prediction allowing for integration between legacy well site automation technologies, edge computing, cloud and AI.

What advantages can technology offer in terms of efficiency?

Technology and digital are the fastest route towards efficiency since they bring improved visibility on the business drivers, allowing through insights and prediction to drive better and faster decisions.

Technology increases reliability and safety while reducing total cost of ownership by:

  • In CAPEX phase: reducing engineering intensity and rework while improving schedule certainty
  • In Operations phase: Increasing equipment lifetime and maximizing production through detection and prediction of abnormal operating conditions. This yields to an improvement of the overall supply chain and better safety achievements.

Are companies ready for the digital wave?

It’s not a matter of readiness anymore, it’s a matter of survival.

Post 2014, the oil and gas companies had been looking for solutions to reduce capex and improve the production of their fields and digitalisation has been the best answer to address those challenges.

The COVID-19 pandemic and new oil price reality will certainly accelerate decision for digitalisation of oilfields. The question is not if digital will come, this is certain. The key question is how to implement successfully.

This interview first appeared in the July issue of Pipeline Magazine

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Digital transformation presents potential for oil and gas companieshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/digital-transformation-presents-potential-for-oil-and-gas-companies/Sebastien Grau, Regional Sales director Middle East & Sub Saharan Africa, Rockwell Automation talks about why digital transformation could provide massive opportunities for oil and gas companies2020-08-06https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/august/digital-transformation-presents-potential-for-oil-and-gas-companies/https://www.pipelineoilandgasnews.com/media/1797386/sebastien-grau-web.jpg

Sebastien Grau, Regional Sales Director Middle East & Sub Saharan Africa, Rockwell Automation talks to Julian Walker about why digital transformation could provide massive opportunities for oil and gas companies

What kind of digital transformation is the oil and gas industry facing?

Today, digital transformation presents massive potential for oil and gas companies, both onshore and offshore. The oil and gas industry requires a flexible environment to stay competitive. Making important investments in these technologies will ensure that companies in this sector have a solid platform in place to benefit especially from improved health, safety, and environmental performance. Digital technologies provide companies with better access to analytics tools and digital ways of working that help companies to better handle their data. Digitalising logistics planning will also ensure that vehicles show up on time and with the correct equipment.

Many innovative approaches are being explored in the oil and gas industry to improve overall performance and safety on rigs. The companies that are introducing these technologies and are building a connected digital oilfield are eliminating risk scenarios. There is a lot of learning involved and new ideas will continue to persuade operators to step up their game in technology innovation. At Rockwell Automation we encourage our clients to engage in digital transformation early, align the trends we see every day across your organisation, and develop comprehensive strategies to adopt these changes correctly.

What impact will COVID-19 have on companies looking to implement digitalisation in the energy sector?

The energy sector is severely affected by this crisis, which has slowed transport, trade and economic activity across the globe. Electricity demand is down significantly in many territories and the market for transport fuel has shrunk dramatically, as planes are grounded and movement restricted. The global oil industry is experiencing the biggest shock in its history, so oil and gas companies should implement solutions for automated adaptive planning and scheduling of production, logistics and service processes.

As per IEA, the implications of the pandemic for energy systems and clean energy transitions are still evolving but three areas in particular stand out:

  • Energy security remains a cornerstone of our economies, especially during turbulent times.
  • Electricity security and resilient energy systems are more indispensable than ever for modern societies.
  • Clean energy transitions must be at the centre of economic recovery and stimulus plans.

Now, companies must start thinking strategically about how they will adapt as the pandemic and markets evolve. The experience of COVID-19 will almost certainly accelerate momentum towards new ways of working, automation and digitalisation. Companies that are further along the curve in digitising their operations have already benefited from greater built-in resiliency during the crisis, reducing dependence on human resources. Greater investments in these areas will equip companies to maintain better business continuity in their supply chains, operations and customer management, reducing the load on their workforces. The businesses that lack a robust digital backbone or an online presence have struggled. The move to shift infrastructure from traditional data centres to the cloud, or a mix of on-premises and cloud computing, is already showing signs of acceleration.

The COVID-19 crisis has created a unique opportunity for digital professionals to apply creative thinking beyond the realms of comfort for most businesses – especially those that are more averse to change and risk.

Do you feel greater digital transformation will come about due to the market shifts brought on by COVID-19?

Yes, business leaders today are rightly focused on the huge business continuity challenges posed by COVID-19. Unsurprisingly, the organisations that were furthest down the digital transformation journey before COVID-19 struck are tending to adapt to the crisis better than their peers. Their business models and working processes meant that they were able to pivot more rapidly or accelerate changes already underway. Many businesses are already rethinking how to introduce greater virtualisation into many aspects of the business. Technological transformation will also have been given a boost by the experience of virtualisation and new ways of working by staff during the pandemic lockdown. It is likely to accelerate the move to a more mobile workforce, able to work virtually and at distance. Companies will want to consider what worked well during the crisis and look at the opportunities for future workforce productivity and flexibility.

How is Rockwell Automation helping oil and gas companies prepare for the digital transformation?

At Rockwell Automation, we believe that a Connected Enterprise is the key to success, and achieving one involves driving the decisions and actions that bring together people, processes and technology. When we combine the strengths of technology with an enthusiastic and engaged workforce, a lot is possible. We always encourage extreme cohesion from the top down. And as oil and gas companies need a flexible environment to stay competitive, Rockwell Automation’s role is to guide companies as they integrate digital solutions that can maximise the recovery of existing reserves, optimise production, and reduce downtime.

What technologies are you focused on in particular?

Rockwell Automation offers a wide range of technologies to meet the challenges faced by today’s industry. The PlantPAx system is one such technology, helping companies make better and faster decisions by enabling manufactures to respond more quickly to the demands of the customer and fast-changing specifications. This modern DCS uses a common automation platform for seamless integration between critical areas of the plant, and helps companies to drive productivity, increase efficiencies and reduce costs.

We also focus on the FactoryTalk Analytics platform. This technology is a bundled offering that includes FactoryTalk Analytics DataView, FactoryTalk Analytics DataFlowML, and FactoryTalk Analytics Edge. With FactoryTalk Analytics, our clients gain scalable analytics from the edge to enterprise and can ingest data from many different sources. FactoryTalk Analytics provides our clients with self-service machine learning and data mashups for collaborative data analysis.

This interview first appeared in the July issue of Pipeline Magazine

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Oil producers must embrace digitalisation to survive the COVID-19 erahttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/oil-producers-must-embrace-digitalisation-to-survive-the-covid-19-era/Siemens Middle East talks about the need to embrace digitalisation to survive the COVID-19 era2020-07-28https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/oil-producers-must-embrace-digitalisation-to-survive-the-covid-19-era/https://www.pipelineoilandgasnews.com/media/1797364/uwe-troeger-siemens-middle-east-web.jpg

By: Uwe Troeger, Senior Executive Vice President of Digital Industries, Siemens Middle East

If there’s one winner to emerge from the devastating toll of COVID-19, it’s technology, and those victors are well known. The giant internet companies connecting us to each other and to our online shopping carts. Cloud providers enabling most office workers to continue business, while industrial technology companies keeping factories, infrastructure and energy facilities running.

Oil, gas and petrochemical companies have come under pressure due to collapse of demand during the pandemic. Still, they stand to benefit from prudent investments that digitalise their industry. Unlike many consumer goods, aerospace, automotive and pharmaceutical industries, oil and gas producers have been more hesitant in their digitalisation journey. Some producers are reluctant to allocate capital to projects that won’t show returns for years. Others are concerned about sharing data and cybersecurity, reinforcing the industry’s preference for tech conservatism.

Market forces is solidifying this conservatism for some producers. Even before crude’s unprecedented plunge to negative values in April, the consensus forecast was that prices would be “lower for longer.” The latest declines are further straining energy companies and may jeopardise nascent digitalisation efforts that lower lifecycle costs, optimise output and protect the planet.

Enter the ‘Digital Twin’

The slow pace of technology adoption in the energy industry isn’t uniform, and many oil and gas companies, especially in the Middle East, are on the cutting edge of digitalisation and devote considerable resources to technology. Most innovations in the sector today, from exploration to downstream projects, are aimed at squeezing maximum value from each barrel. Switching out old equipment and installing sensors that allow for real-time production optimisation are some examples of the quick upgrades to brownfield assets.

But the greatest promise lies in technology that isn’t widely adopted, yet. Digital twins are long established in the industrial world, and proving to be even more useful as the remote operation and servicing of critical oil and gas infrastructure become integral to current operating environments. This software solution allows energy companies to create virtual copies that emulate their plants, providing operators a comprehensive and accurate assessment of their assets. 

Developing a digital twin is a key step toward connecting the virtual and real production worlds of the digital enterprise. By deepening the integration of automation hardware and software, producers not only collect and process data from machines and plants, but they can turn the information into a competitive advantage. The deeper the integration, the better the outcome.

Today’s tools are often specialised for specific tasks and may lack the connectivity that would enable the easy comparison and cross-reference of asset information. Engineering tools work well during the design and build phases but are less suited in operation and maintenance. Functional information is disconnected from 3D designs used when building a plant, even though these designs could provide excellent context for operations training, maintenance task planning, troubleshooting and decision-making during crises. So-called ‘dark data’ which is untagged and unlinked information stored in PDFs, drawings or paper documents, and electronic data in legacy systems are rarely accessible in current control portals.

In order to mitigate the disconnect, a new approach is needed that combines operations intelligence, simulation, asset performance management, and artificial intelligence platforms in a sensible yet powerful way to make complex information more accessible and comprehensible to decision makers. Real-time data – accessed via a secure cloud-based solution in a single platform – can help operators make more confident decisions, act faster, and ultimately increase operations performance and safety. 

Real-time Insights

My company Siemens, along with our partners at Bentley Systems, have developed a solution we call PlantSight, which merges digital twins with both physical reality and engineering data, creating a holistic digital context for any operating plant. This allows for immediate access to consistent representations of the most complex production facilities, and is especially useful to accelerating the time and effort needed to federate and complete asset information for brownfield installations.

Here’s how this approach would help improve a typical oil and gas production facility or petrochemical plant. Data, which is constantly generated, has historically been collected in various databases and paper files and then stored somewhere, at headquarters or on location. PlantSight takes all these data, including ‘dark data,’ and merges them into a portal that provides a rich visual experience that covers the complete lifecycle of assets.

An operational snapshot of overall production and equipment health indicators such as reliability, maintenance and health, are clearly visualised, and users can quickly view anomalies at individual assets. Historic data like false starts, missed preventative maintenance and alarms are easily accessed, and operators can determine if, for example, a plugged filter is the likely cause of low lube oil pressure, and then send a maintenance team to resolve the issue. Schematics and 3D models are also embedded in the system, making the portal a one-stop solution.

This digital twin system is designed to be enabled without disrupting the existing physical or virtual environment, which is crucial when critical industries are operating at heightened capacity. When engineering or maintenance trouble shoot an operational issue or need to start a modification project, they lose precious time when trying to determine the current status and performance of the asset before starting their actual work because often, the asset information is missing or inaccurate. Functional, operational and 3D spatial information, coupled with accurate information on spare parts, has proven to shorten project duration and ‘mean time to repair,’ thus lowering operational and capital expenditures.

The post COVID-19 lockdown phase will be characterised by economic uncertainty, repeated disruption to labour and supply chains, and for energy companies, low oil and gas prices. As the energy industry prepares for this new era, technologies that reduce operating costs and prolong the life of existing assets will feature more prominently in investment budgets. Digital twins are poised to become integral systems needed to operate efficient, safe and reliable oil, gas and chemical facilities.

This interview first appeared in the July issue of Pipeline Magazine

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Digital twins to play an important role in the changing industry landscapehttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/digital-twins-to-play-an-important-role-in-the-changing-industry-landscape/Alistair Stubbs, Vice President of Asset Information & Reliability at Bentley Systems, speaks about how the industry is changing in light of COVID-19 and how this will lead to greater digitalisation and the important role digital twins can play in all of this2020-07-14https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/digital-twins-to-play-an-important-role-in-the-changing-industry-landscape/https://www.pipelineoilandgasnews.com/media/1797331/alistair-stubbs-new-web.jpg

Alistair Stubbs, Vice President of Asset Information & Reliability at Bentley Systems, spoke to Julian Walker about how the industry is changing in light of COVID-19 and how this will lead to greater digitalisation and the important role digital twins can play in all of this

The events surrounding the COVID-19 pandemic has had a massive impact on the oil and gas industry and will lead to a faster adoption of digital technology.

“I think it is a big transition time for the oil and gas industry. We are already seeing the shakeout from COVID. The industry is changing, efficiency is going to come to the forefront and COVID has given it an extra push. The next 6 months are going to be key,” said Stubbs.

Stubbs explained that one of the main things he is seeing in the market is a relentless push for digitalisation.

“This is a bit of a recognition that in many ways the oil and gas market doesn’t feel that they have taken advantage of the technology that is out there. The big shift is that the technology is there now for companies to take advantage of, and digital twins is one such technology.”

According to Stubbs, Bentley Systems’ core digital twin offering for the oil, gas and process manufacturing industries is PlantSight.

“PlantSight currently has three levels, for those that want to maintain the engineering information, then expand the range and depth of information in the digital twin (alignment and aggregation) and finally for those that want to operate their plant through the digital twin.”

He added: “Bentley’s digital twins is more than just a 3D image, and it has a much broader scope. We at Bentley push the plural for digital twins, because we feel different users will have different needs for digital twins; the uses for the process twin will be different from the uses for the production twin.”

Digitalisation impact

Greater digitalisation is having a big impact on the use of digital twins, as Stubbs explained.

“One big change brought on by digitalisation is that companies will now invest to keep a particular model updated and in order to keep the digital twin, whether it is a performance or condition one, up to date they will need to invest in the tools, technology and people to achieve that. With digitalisation oil and gas companies have realised that they can make huge efficiency gains from sites if they can have consistent access to reliable and up-to-date asset information through digital twins.”

Stubbs went into more detail about two aspects of digitalisation that is making a difference.

“Firstly, improvements to working smarter. This continues the trend that has been in the industry for a number of years where transitioning from a document centric way of working to data centric. This has continued and evolved to be ‘model centric’ where the model is broad in its interpretation. This is reducing friction and enabling speed in the supply chain when updating information about an operating plant. Digitalisation, however, remains focused in the engineering domain. The second element of digitalisation is the application of a wider digital twin in the day-to-day operations of a plant. Building on investments in edge devices, IOT and instrumentation, operations can apply digital twins to a lot of aspects of the business.”

Stubbs went into more detail on how Bentley looks at two levels where this can be used:

  1. a) At the first level, we are looking at the performance of equipment and systems in the plant to optimise maintenance and increase availability. Often called APM, this drives optimisation of the ability for an asset owner to make/produce product using the asset.
  2. b) At the second level we are looking at how to optimize the complete asset or even a portfolio of assets, aligning with things like market demand against the process plant’s ability to produce product, looking at trends, internally and externally.

“Both of these are strongly aligned with the application and use of ML/AI techniques – transitioning maintenance for example to predictive techniques, and in the operational context, optmising the use of raw materials or energy. They are all important measures of success in an industry that is under increasing external scrutiny,” he noted.

Digital twin successes

“We were very excited last year to see how many of our users’ projects submitted to the Year in Infrastructure Awards and shortlisted by external judges – cited the use of a digital twin.  These projects took various forms, some related to driving efficiency of startup, for example Hatch in Africa, or in operations, the use of remote surveys to avoid the danger of having teams climbing radio towers in remote locations of Australia.

“For me, what this showed is the use of a digital twin is very varied and much dependent on the business or market challenges sought. While not oil and gas related, I think the inspection surveys for radio towers done with a drone has a lot of relevance in the oil and gas industry.  Imagine improved fabrication, installation and maintenance of towers, flare stacks, and cranes. Again, avoiding the need for unnecessary working in remote locations, at height and other hazardous situations,” said Stubbs.

Challenges remain

Stubbs explained that Bentley is seeing challenges in a number of places relating to the adoption of digital twins and digitalisation in general.

“The key challenge is that this is not an IT project. Rather, the adoption of digital twins impacts potentially many areas of business. For example, commercially, traditional EPC contracts and milestone payments are driven by deliverables in document form. How does this need to change when the measure of progress might be much more granular and based around data and quality of data? So when adopting digital twins there needs to be broad alignment across a much wider part of the business as well as new ways of working. However, the benefits are very significant.”

In fact, Stubbs feels that cloud technology could make a huge difference.

“The cloud makes solutions more accessible to a wider range of people. For example, for a user of ours who operates FPSO vessels off shore with limited connectivity, as well as onshore engineering support, we have been able to provide a hybrid cloud and on- vessel solution to ensure everyone has access to the information they need all the time.”

Ever-important ROI

Stubbs went on to talk about how Bentley has worked with the global consultant McKinsey to develop a maturity assessment.

“This process can help an organisation assess their current position on a journey to achieving digitalisation and to prioritise the best next steps. This gives a structured process that any organisation can adopt to measure their progress and calculate an ROI robustly. Additionally, the research for this, combined with proven figures coming from our Year in Infrastructure submissions has given us some fascinating insight into what organisations are measuring and achieving – the benefits are significant and increasingly proven.

He added: “We are seeing our users report savings in OPEX ranging from 10-40 per cent. Some of the more interesting examples are the stories around improved safety.”

Stubbs explained that while the industry has been talking about TOTEX as a target for a number of years “the availability of digitalisation and digital twins are now making what was a previously intangible benefit that was hard to prove and qualify, increasingly tangible and demonstrated – alignment across the supply chain and lifecycle is going to unlock a new generation of opportunity for the industry – vital as we now enter a phase of new reality brought on by environmental and energy transition.”

Digital Twins outlook

“I think more companies will be looking at digital twins. I feel we are seeing the coming together of a number of different forces in the market that has created a tipping point for greater digitalisation, and we are just at the start of it,” said Stubbs.

He concluded: “Coming out of COVID we will see a significant change to how a lot of owners operate their assets. I think it will be interesting to see in the next few months, as operations start to return to normal, what this normal will look like.”

This interview first appeared in the July issue of Pipeline Magazine

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Digitalisation brings greater reliability to the oil and gas sector https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/digitalisation-brings-greater-reliability-to-the-oil-and-gas-sector/David Armstrong and Rob Harper from Bentley Systems talk about the advances digitalisation is bringing to its digital twin services2020-07-09https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/digitalisation-brings-greater-reliability-to-the-oil-and-gas-sector/https://www.pipelineoilandgasnews.com/media/1797320/calm-plant-digital-twin-web.jpg

Julian Walker spoke to David Armstrong, Business Development Director at Bentley Systems and Rob Harper, Director, Product Management Asset Information & Reliability, Bentley Systems about the advances digitalisation it bringing to its digital twin services.

The oil and gas industry is starting to really embrace digitalisation, as it looks to catch up with other industries that have gone down the digital route earlier.

“It is the oil and gas industry’s time. They should look at the benefits that other industries like aviation and manufacturing have gained from making the switch. I think digitalisation is changing the oil and gas industry for obvious reasons as there has been some serious faux pas in the past as digitalisation was not adopted sooner by the oil and gas industry,” said Armstrong.

Armstrong said the world has embraced the fact that the industry has to get its intellectual property in one place; to “Future-Proof” their organizations. If key information about your critical assets resides in the minds of your aging workforce or contractors, their potential departure could cause serious issues with your assets and therefore your organization.

“You can have thousands of IoT devices in the field, but if you don’t have all the right information coming together when you need it and have that situational intelligence in place then you will never be able to make the right decision at the right time.”

Technology evolution 

Armstrong touched on how the evolution of technology has allowed digitalisation to be used as a mechanism to deliver more operational income savings.

“There is so much overlap and waste that we see. Technology is now advanced to the point when we don’t have to bring in systems integrators in a room and hardwire connect. We now have a framework that exists to pull the information in remotely and see what is needed. We can make sure it is the latest information and it is connected to everything. This wasn’t possible in the past,” noted Armstrong.

What Bentley Systems is hearing loud and clear is that owners and operators are saying if the technology is already there, how can they leverage their investments in terms of information in a different way.

Armstrong explained: “We call this the iceberg data. All the information sitting under the tip of the iceberg is relevant, but how do I bring that information to the surface and use it. This is how we can help and how our digital twin, iTwin, solution can bring all this information to the forefront in a unified view.”

He added: “One of the things we are focusing on now is looking at the problems we are actually trying to solve. Open technologies now exist that can change the discussion to what problems you have and how can we connect the disconnected information to find a solution, and accelerate time to value. There has been an evolution in how software companies work. We, at Bentley, are quite different, as we don’t care where the design documentation comes from. Technology is now a babel fish. It allows us to communicate in different ways, and that allows us to ask different questions that we were not prepared or able to ask in the past.”

Digital twin to the rescue

The technology evolution can all be seen in Bentley Systems digital twin solution, iTwin Services.

As Harper explained: “The base technology that we offer is iTwin Services that can take multiple data sources in the engineering space and digitalise and review sources on the web. From there we can build specific solutions and technologies for different industries. For example, in the traditional process industry, we have built a solution in partnership with Siemens called PlantSight that helps us move toward a more specific solution for oil and gas companies.”

It is the ability of the digital twin solution to link all the engineering information that a company might have from different sources and then visualise it in one place on the web that makes it such an important differentiator.

“We can bring all the data from any third-party application into a single portal to give the client a real-time look in 3D of how an asset is operating. We are using the user’s data and stringing it together, so the client can leverage all the investments they have made in the past.”

Harper emphasised that Bentley Systems’ digital twin solution allows users to keep their legacy investment in data and models.

“As many companies have already made a lot of investment in engineering tools or reliability systems, we want to bring all of that data to the forefront so companies can see all the information in one place. We feel a digital twin can provide a real in-depth look at the current condition of an asset and also its future condition. When clients start to see the benefit of digital twins in the project phase, we see them realise how much more valuable the information will be when they get an asset into operation.”

Another important aspect is that a digital twin will be constantly updated and kept in an evergreen state, so it can constantly add value over time.

“The evergreen digital twin is key, as operational assets are always in a state of dynamic change of one form or another,” said Armstrong.

Benefits of the Cloud

One technology that iTwin Services and PlantSight take full advantage of is the cloud. 

“On the design side, the cloud is making a massive difference in that we can conduct critical meetings remotely. With engineers forced to work remotely from home during the COVID-19 crisis, we have seen our users remain highly productive and able to effectively carry out design reviews remotely using the cloud,” Harper said.

He added: “One of the key functionalities in our iTwin Services is our comparison feature, which allows us to import the latest 3D model and compare with previous versions, it can immediately show all the changes made.”

Bentley Systems is also heavily focused on reality modelling and capturing existing asset conditions.

As Harper described: “The ability to take photographs of an entire site using drones, and converting these photographs into a reality mesh and create a real-time 3D model is really impressive. Using drones to capture the data and then be able to visually inspect your asset in 3D remotely is an interesting technology that has a lot of usage for oil and gas companies.”

Other technologies that will be key going forward, will be artificial intelligence and machine learning.

“AI and machine learning have developed in leaps and bounds, and both are going to be key for a lot of the things our tools can do,” noted Harper.

Middle East thirst for digitalisation

The Middle East region has always sought the latest technologies, and this is why there is a lot of interest in digital twin services in the region.

“The Middle East has always been quite progressive when it comes to new technology. Now, the Middle East is opening up to cloud-based solutions provided they are hosted within the region, which is a big game changer. Middle East countries are looking forward, and initiatives like Dubai’s 2020 and Saudi Arabia’s 2030 will be very important in advancing technology in the region. It is the right time in the Middle East to leverage on the infrastructure and capital as the Gulf countries move away from being solely reliant on hydrocarbons,” said Armstrong.

“We have two success stories from Oman on how our digital twin solution helped Oman Gas and BP on its big Khazzan gas project,” said Armstrong.

He added: “We have seen a big uptick in requests for more information about digital twins in the last three months from the Middle East. We are spending a lot time educating our users in the region about digitalisation.”

Bringing greater reliability

Bentley Systems feels that reliability benefits are a massive part of what digital twin services can bring. Armstrong said: “In oil and gas, we always look at the earliest point of detection but in reality that does not always happen. We are trying to affect change much earlier in the process to avoid any operational challenges later in an asset’s life. Early bird gets the worm. We can work with new technology like AI, machine learning to move that earliest point of detection much further up the curve, allowing us additional time to deal with critical events.”

He added: “Maintenance is the act of doing, but reliability is a state of thinking before we do something, based on proactively reviewing the right information. That is what a digital twin is about. We see it as digital-scenario planning. We are looking at creating a valuable data lake that will allows us confidently to look into the future.”

COVID-19 impact

The COVID-19 pandemic has led to a lot of interest in cloud technology and digitalisation.

“We have seen an immediate impact on the number of RFIs and RFPs after COVID hit. I think there has been a blinding fl ash of reality and questions of what do we do now. How can we have access to the information when we aren’t even allowed to go to the plant?,” said Armstrong.

Harper also touched on the increased interest after COVID-19 started.

“While we are seeing a reduction in big capital spend on some of the facility work companies are looking for efficiency improvements via digitalisation and like David said, a lot of the RFIs and RFPs are looking for a digitalisation strategy,” said Harper.

This interview first appeared in the July issue of Pipeline Magazine

David Armstrong

Rob Harper

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How oil and gas operators can reap the rewards of drone usagehttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/how-oil-and-gas-operators-can-reap-the-rewards-of-drone-usage/Al Rivero,Director of Sales at Oil and Gas at Rajant Corporation discusses how drones can help the oil and gas industry can follow the blueprint of many other sectors that have unleashed and harnessed its potential and reaped the immense rewards offered.2020-07-05https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/july/how-oil-and-gas-operators-can-reap-the-rewards-of-drone-usage/https://www.pipelineoilandgasnews.com/media/1797288/al-rivero-pe-web.jpg

By: Al Rivero, PE - Director Sales, Oil and Gas at Rajant Corporation

The midstream market is continually evolving. With the volatility of ever-changing oil and gas product prices, it is apparent that operators in this tariff -based business must remain innovative in the ways they adapt to new challenges. The age of Industry 4.0 is here. Focused pipeline operators are finding the best opportunities to maximise efficiency and reliability while minimising costs and prioritising safety.

As more complex Industrial Internet of Things (IIoT) applications are introduced into the fold, operators must ensure their day-to-day operations and processes can work in symbiosis with the evolution of these technologies.

One key tool enabled by the proliferation of the IIoT sector is drone usage. The number of deployments is increasing exponentially across a variety of industry sectors, including agriculture, military, and border patrol. That’s no surprise, given the projected annual revenue of the drone industry is US$82.1 billion by 2025. By utilising unmanned aerial vehicles (UAVs), known commonly as drones, the oil and gas industry can follow the blueprint of many other sectors that have unleashed and harnessed its potential and reaped the immense rewards offered.

Smarter decisions made safely and securely As deployments across the globe skyrocket, drones’ seamless ability to reach all parts

of the oil and gas environment rapidly is unmatched. They can, and are, replacing costly methods that would take a significantly longer amount of time for staff  to navigate the site. With the ability to collect and transfer large volumes of data while operating remotely for long durations of time across a vast distance, operators should be keen to embrace drone usage with open arms. Pipeline operators are under regulatory pressures to inspect right-of-way and gathering points for thefts, leaks, and incursions. Having eyes in the sky regularly to provide logistical support and reduce the reliance on manned vessels and personnel movement, drone usage can improve safety and reliability. With over a million miles of pipeline across the globe requiring inspection, monitoring needs to be an integral part of every PIM. Lines traverse large geography often extending hundreds of miles in remote hard to reach areas and are ideal for unmanned crafts.

By providing an aerial perspective to assist the operator in creating a view of the “What, When and How,” each fl yover can help with measured values, look for topology changes, and provide visuals of earth disturbances that could lead to leaks or illegal taps. UAVs can assist in pinpointing and detecting potential incidents and facilitate emergency response. 

Drones with hydrocarbon sensors are used in leak detection. High-resolution imagery can be used to detect movement of soil due to compression or subsidence, as well as use for illegal taps. With thousands of kilometers of both below ground and above ground assets, pipeline operators are relying on drones to provide quick situation assessment. They

are proving tremendous assets that can be utilised across an operator’s entire operation. Offering the ability to collect, analyse, and transfer large amounts of data, deploying drones can help operators excel ahead of their global competition. Not only can drone usage vastly improve visibility compared to previously manual and costly methods, but it can empower oil and gas operators to make smarter decisions, safely and securely.

Supporting dynamic drone usage

However, whilst businesses and governments are beginning to realise the immense importance of drone usage and the opportunities it brings with it, what they must consider is the readiness of their networks to facilitate a drone system or fleet. For oil and gas operators, a growing concern is the ability to monitor their assets while simultaneously maximizing efficiency and productivity.

For example, operators manage constantly moving assets such as vehicles, tankers, and personnel, which remain on the move 24/7, 365 days a year. With many moving parts at once, all of which require different levels of mission-critical requirements, it can mean that crucial connectivity needed for drone usage will face challenges.

Traditional wireless networks will prove ineffective and, in turn, prevent the drones from being utilised effectively. Deploying Wi-Fi – which is most suited to indoor environments where assets are mostly stationary – will not be able to cope with the addition of multiple access points to keep sprawling outdoor operations covered. With the inability to provide reliable connectivity across complex environments for mobile assets such as drones, operators will not be able to work around interference, and coverage drops will be likely.

Leveraging the right network infrastructure can empower operators to make a shift away from the paradigm of traditional manual disintegrated oil and gas processes. Operators need to have a wireless network to rapidly deploy fully mobile and secure connectivity to fully exploit the efficiency benefits of next-generation IIoT applications, such as drone usage.

Rajant can provide the answer

Rajant’s Kinect Mesh network can transform mobile assets into network infrastructure and is designed to adapt to an operators’ communication needs in a fully mobile, highly resilient web of communications. This is made possible by Rajant’s BreadCrumb wireless nodes, which are powered by InstaMesh networking software and provide instantaneous and fail-proof connectivity across rugged terrain. It provides real-time routing of traffic via the fastest pathways, dynamically optimising performance.

Rajant is the only network that enables continuous mobile connectivity for machine-to-machine (M2M) communications as its BreadCrumb nodes can be deployed directly on all mobile assets, including equipment, vehicles, and technician devices. This creates a crucial link between the business-critical field assets and central operations facility. As drone usage becomes an operational necessity for operators, the ability to communicate is dependent on the network. But, with Rajant’s BreadCrumbs, they can hold multiple connections simultaneously and allow mobile assets to communicate peer-to-peer to orchestrate movements and coordinate task execution.

With the ability to eliminate any single point of failure for mission-critical reliability, Rajant’s network provides operators with connectivity that never breaks for autonomous operations, which cannot afford a momentary loss of communications.

Embracing drones to stay ahead

As global competition intensifies in the unpredictable oil and gas sector, operators must ensure they embrace new applications such as drone usage, which IIoT enables.

By adopting a communications system that facilitates the utilisation of these opportunities to reduce downtime and enhance security, operators will be able to thrive for years to come.

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APM 4.0 brings digital transformation to the oilfieldhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/apm-40-brings-digital-transformation-to-the-oilfield/Mohamad Awad, Regional VP for the Middle East, North Africa and Pakistan at AVEVA discusses how new developments in asset performance management can play a transformative role even in a challenging economic climate2020-06-28https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/apm-40-brings-digital-transformation-to-the-oilfield/https://www.pipelineoilandgasnews.com/media/1797268/mohamad-awad-aveva-2-web.jpg

Mohamad Awad, Regional VP for the Middle East, North Africa and Pakistan at AVEVA discusses how new developments in asset performance management can play a transformative role at the region’s oil companies even in a challenging economic climate – thanks to technologies such as IIOT, AI and big data.

In the current low-price environment, asset utilization, cost control and regulatory compliance have become the industry’s top concerns as oil and gas companies struggle to maintain operating profits. With their high capital values, better utilisation rates can help improve efficiencies and reduce costs across the sector, whether in terms of upstream production, midstream throughput or downstream processing. Budgets remain a strategic issue, particularly with high costs from manpower and maintenance. Environmental concerns have increased regulatory oversight.

Consequently, oil and gas operators are turning to the Industrial Internet of Things (IIoT) and other new technologies to optimise operations and boost revenue streams. In fact, researchers estimate that the market for IIoT in oil and gas worldwide alone could reach US$39.4 billion by 2023.

Asset performance management (APM) has a major role to play in driving these improvements across the board. Gartner defines APM as a set of software applications and tools that improve the reliability and availability of physical assets that are essential to an enterprise’s operations, including plants, equipment and infrastructure. With its ability to connect data and trigger actions via systems across the business, APM has been embraced by the manufacturing and maritime industries and is now being adopted by the energy sector, which has been rather late to the game.

To understand APM at work, imagine a scenario where an engineer needs to pinpoint a leaky pump from several shortlisted units, and then estimate potential treatment lines and downtimes. Using the traditional non-visual system, the engineer must rely on manual checks across a wide geographical area, as well as personal experience to answer both questions effectively – a process that can take days, if not longer.

With APM and a digital twin, however, field professionals are able to make decisions much faster, aided by artificial intelligence and virtual guidance. The proximity, location and role of each pump in the plant’s operations are apparent upon consulting the digital twin, while colour-coding on a virtual 3D model indicates the relative health status of each pump in the system. A drill-down to real-time operational data shows the underlying problems: one pump has a leak, while another shows excess vibration. The engineer can now make an informed decision, applying best practices and scheduling repairs to both pumps to maximize asset reliability.

If the story ended there, APM wouldn’t be used to its full extent. It is when this data is shared across the business – in this case to suppliers, operations, management, and perhaps even customers – that APM truly comes into its own. At AVEVA, we call this APM 4.0, to align with the smart extraction, manufacturing and operations procedures of Industry 4.0.

APM 4.0 offers a significant upgrade to the way oil and gas companies conduct maintenance. Just as with Industry 4.0, it transforms businesses by using a set of cyber-physical systems including the industrial Internet of Things (IIoT), cloud computing, big data analytics, predictive analytics leveraging artificial intelligence and machine learning, mobility and augmented and virtual reality. However, APM 4.0’s benefits only accrue when leveraged across an organisation's value chain.

These benefits can be broken down into three key areas of focus:

  1. Visual operations and maintenance: Operational data can be deployed into a navigable 3D model of the plant. Besides offering an intuitive way to distinguish critical and non-critical information, it allows engineers to make informed decisions on managing production assets quickly and effortlessly.
  2. AI-Driven analytics and prescription: Predictive analytics offer early warning identification and diagnosis of equipment problems, in order to reduce equipment failures and downtime, increase reliability and improve performance. Organisations can thus gain the highest return on critical assets.
  3. Augmented guidance: Leveraging augmented reality provides asset owners and operating personnel with real-time, easy-to-follow visual operating procedures and key messages. This reduces human error and guides operators to appropriate equipment for performing specific tasks while existing hazards are flagged up.

From data collection to analysis and asset visualisation, APM 4.0 is more than just hype. The approach has yielded significant benefits for companies that have embraced it. According to an AVEVA customer survey, APM 4.0 yielded the following benefits:

  • 30% improvement in asset utilization.
  • 25% reduction in unplanned downtime.
  • 20% increase in asset availability.
  • $17M+ saved in single predictive analytics catch.

Simply put, APM 4.0 brings digital transformation to the oilfield in a cost-effective and operationally efficient manner. With its capacity to funnel multiple silos and different information formats into a single, comprehensive functional representation that offers real-time, actionable insights, APM 4.0 can ultimately improve business and customer outcomes in the challenging oil and gas sector.

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COVID impact on safe operations and optimising for the futurehttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/covid-impact-on-safe-operations-and-optimising-for-the-future/Neil Flemming, managing director of Asset Integrity Engineering, speaks exclusively about the impact of COVID-19 on safe operations and the industries drive for optimisation.2020-06-23https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/covid-impact-on-safe-operations-and-optimising-for-the-future/https://www.pipelineoilandgasnews.com/media/1797256/aie-integrity-boss-web.jpg

Neil Flemming, managing director of Asset Integrity Engineering spoke exclusively to Pipeline Oil & gas News about the impact of COVID-19 on safe operations and the industries drive for optimisation.

The COVID-19 pandemic and energy price collapse has taken a severe toll on the Oil and Gas industry. What has been the impact on safe operations?

This is an incredibly difficult time for all those involved in the industry. Not only are energy prices at historic lows, but operators are also facing a variety of Government health rulings and other related challenges in response to the pandemic.

We have seen operating companies cancel or defer key maintenance, inspection, and shutdown activities. Many remediation and repair projects have been shelved and inspection backlog is generally growing daily.

In many cases, assets are being forced to operate beyond an already stretched design life, but now with limited maintenance and inspection resources at site. A key challenge many operators have had to balance is the risk of spreading the virus within the workplace against maintaining sufficient manning levels at site which are suitably rested. 

The industry supply chain has also been severely affected in some regions more than others.  We are activity supporting a range of clients where specialist skills or consumables required for sustainable operations are either not available of significantly delayed. We have worked with clients to provide critical engineering analysis, optimise maintenance spares, engineer strategies to reduce chemical consumption and define optimal manning strategies.

Its not all doom and gloom however, and we have seen operators adopt several innovative and effective risk reduction measures to cope with the current situation. The adoption of remote working practices and technology has been an area which has developed significantly and has largely been effective.  We see an increased adoption of this remote support model moving forward.

How was the industry positioned before the COVID 19 outbreak?

The last oil price downturn (and those before it) ultimately created many difficulties for operators in sustaining safe and reliable operations whilst still operating a commercially viable model.  In recent years, major cost cutting was enacted, and in many cases, this was not always executed strategically. For example, manpower was reduced although the technology, process and systems in place were largely kept the same.

We have witnessed the negative effects of this approach from a safety and reliability point of view over recent years.  Integrity and process safety incidents typically lag investment decisions by up to 5 years. Throughout history we know that periods of low oil price have historically been followed by major incidents and even before the COVID-19 outbreak we saw evidence of this trend. In 2018/2019 alone 4 out of the 20 largest ever reported energy losses were recorded.  The root cause of these incidents is not fully defined although time will tell if we are again sadly repeating the events of the past. 

The major concern we face today is that many assets are already operating well beyond their original intended service life and poorly engineered cost cutting measures over recent years are now creating widespread challenges. This combined with the unprecedented effects of the COVID pandemic is a major challenge for the industry moving forward. 

What advice can you give to operators faced with these current challenges?

In AIE we continually learn from other industry sectors and across our varied client base.  We also invest heavily in R&D and this approach drives the adoption of new technology and best practice across the services and software solutions we provide to clients.

Cost reduction and efficiency can be implemented via various strategies across most areas of the business.  Change by its very nature however creates risk and this needs to be managed via a robust management of change process (MOC). 

Oil and gas operations are still inherently inefficient when compared with other industries.  Clients tend to invest heavily in new projects although do not always take a structured and systemic view on asset performance and extending remaining life. Studies show that nearly 50 per cent of budget spent on preventive maintenance can in some instances be eliminated.  It is in this space where AIE focuses and our services and software solutions are geared to drive optimized strategies which create the foundations for operational excellence and all the benefits this brings.

When faced with such economic challenges, the idea of investing additional funds to strategically optimise or restructure operations is sometimes counter intuitive to most.  Operators instead often decide to execute such measures with internal resources, ironically in many cases the same resources which created the original system and of course this has certain limitations.

Fundamentally and above all, operators need to adopt a more sophisticated and long-term approach to plant operations and cost optimisation. A move towards data-driven decision making (DDDM) is essential which involves making decisions and optimisations based on factual data rather than relying on intuition or observation. We have worked with clients to successfully execute DDDM objectives in a number of projects and in all cases we have achieved significant optimisation targets from reducing spares and chemical inventory by up to 60 per cent to optimising inspection and maintenance systems by up to 40 per cent. 

Industry studies report that many companies believe the use of digital technologies can improve asset integrity performance and drive continuous improvement. What is AIE’s view on this?

Now more than ever, energy providers and service companies must continuously improve their efficiency to operate profitably. At the same time, companies must maintain the highest standards for safety and environmental protection.

Approximately 36 per cent of oil and gas companies are already investing in big data and analytics. However, only 13 per cent use the insights from this technology to drive their business transformation and Continuous Improvement (CI). This discrepancy highlights how these companies have not always embedded big data and analytics completely into their systems but are just applying the technology piecemeal.

AIE was founded based mainly out of frustration with this situation, whereby most integrity service providers available on the market focused on relentless inspection campaigns and placed limited value on the evaluation strategy or analysis of the data. We also challenged the way integrity management processes were historically designed to be bespoke and were never standardised or fully integrated.

We are strongly invested in the development of digital technologies to drive asset integrity performance and continuous improvement. Through our Veracity software, we are leading the industry to a more efficient, standardised, and integrated approach to how data is gathered, analysed and managed in helping to create and sustain operational excellence. 

What is next for AIE ?

AIE provides remote integrity support through our Veracity platform to assets producing over 2 million barrels of oil per day. AIE remains focused on changing the industry mindset, to move away from relentless onsite inspection and maintenance activities and instead focus on data driven decision making and plant optimisation.

We continue to heavily invest in R&D geared towards advancing our software and data analytics capabilities. In 2020 AIE will launch new machine learning technology and we will also become a paperless integrity management service provider whereby all analysis and field reporting will be executed digitally through our Veracity platform and mobile application.

We are continuing to grow our client base, diversifying into other industry sectors and providing a new range of sustainability services which support the energy transition taking place. We have recently been awarded our first service contract in South East Asia and we have new strategic partnerships in the MENA region soon to be announced. 

The current market conditions are extremely difficult for all involved, however AIE is an agile forward-thinking organisation and our entire service range and skill set is geared to support industry requirements moving forward.

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Hydrogen set to play a greater role in the energy mixhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/hydrogen-set-to-play-a-greater-role-in-the-energy-mix/Liv A. Hovem, CEO of DNV GL – Oil & Gas speaks exclusively about why hydrogen now has a more certain future and will have a greater role to play in the energy mix.2020-06-15https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/hydrogen-set-to-play-a-greater-role-in-the-energy-mix/https://www.pipelineoilandgasnews.com/media/1797204/liv_a_hovem_web-new.jpg

Liv A. Hovem, CEO of DNV GL – Oil & Gas spoke exclusively with Julian Walker about why hydrogen now has a more certain future and will have a greater role to play in the energy mix.

Pipeline: Why do you think hydrogen has not played a bigger role in the energy mix so far?

The hydrogen economy is still in its infancy, and it’s true that hydrogen has been overhyped in the past. Yet, DNV GL’s recently launched whitepaper ‘Heading for Hydrogen’ – based on a survey of more than 1,000 senior oil and gas industry professionals – suggests a more certain future and that the time is right to begin scaling the hydrogen economy.

Societies globally are aligning on the need to act faster to fight climate change, with several nations already committing to net zero targets for CO2 emissions. Many oil and gas majors have also committed to reducing or eliminating their emissions, and our decade-long study shows a significant rise in the proportion of those questioned reporting that their organisation is actively adapting to a less carbon-intensive energy mix – up from 44 per cent in 2018 to 60 per cent in 2020. Hydrogen has a significant part to play in this. At the end of 2019, one in five (21 per cent) said their organisation was already actively entering the hydrogen market.

The rise of natural gas will also be key CCto hydrogen playing a greater role in the energy mix. Our 2019 Energy Transition Outlook – DNV GL’s independent forecast of world energy demand and supply – forecasts that natural gas will become the world’s largest energy source in the mid-2020s. In this outlook, gas will complement variable renewables throughout the energy transition. Blue hydrogen (produced from fossil fuels, using carbon capture and storage (CCS) to reduce emissions) offers the opportunity to decarbonise this gas.

In short, the future of hydrogen energy is wrapped up with the future of natural gas, renewable energy and CCS – all of which are set to play significantly greater roles in the coming years.

are helping governments and gas operators to demonstrate safe hydrogen production, transmission and consumption. One example is the Hy4Heat programme in the UK, which aims to establish whether it is technically possible, safe, and convenient to replace methane with hydrogen in residential and commercial areas.

The second area is to develop efficient hydrogen infrastructure. Countries with natural gas infrastructure can continue to use those assets in a hydrogen economy. Even where existing infrastructure can be reused or repurposed, there will still be issues to resolve. Our experts are helping companies across the global oil and gas value chain to develop hydrogen-fi t infrastructure. One operational constraint to overcome includes the fact that hydrogen pipeline networks may need to be operated at different pressures (or velocity) than natural gas/biogas. Further research may be needed into whether hydrogen could have an adverse effect on materials (e.g. in pipes and valves) and finally, various appliances would need to be converted or replaced (e.g. water heaters, compressors, pumps and sensors).

Third is the need to scale CCS technology. All major routes to successfully decarbonise gas rely on the large-scale uptake of CCS. More than half of those we surveyed (55 per cent) said that the oil and gas industry cannot decarbonise without greater uptake of CCS. CCS struggles to gain traction because there is a cheaper option for industry: emitting carbon into the atmosphere costs virtually nothing. Our 2019 Energy Transition Outlook finds that CCS will not scale until the 2040s without changes to government policy decisions – the types of bold decisions that stimulated other clean technologies like solar and wind – large-scale uptake can happen. Industry can also play a role by finding ways to reduce the cost of implementing CCS. Some 62 per cent of senior oil and gas industry professionals think the sector should drive adoption forward immediately, and not wait for government policies/incentives.

The final enabler for the growth of hydrogen relates to the need to incentivise value chains through policy. The quicker that government incentivises industry to adopt technology, the quicker the technology goes down the cost-learning curve and becomes independently financially viable. Use cases will create demand for hydrogen, and demand will lead to further investment, lower costs, greater acceptance, and the momentum needed to build sustainable supply chains. But to make use cases a reality, governments and inter-governmental organisations have to make more long-term policy commitments.

Pipeline: How important will hydrogen be in the energy transition to a low carbon world?

Hydrogen has the potential to decarbonise natural gas (and applications that cannot feasibly be run on electricity). It can complement renewables during production lows or high demand, and surplus renewable energy can be used to produce hydrogen, which can be stored as a gas for use in other applications. This is significant, as DNV GL research predicts that natural gas and variable renewables will be the only energy sources for which demand is higher in 2050 than today.

While hydrogen gas produced from renewable energy (green hydrogen) is the industry’s ultimate destination, analysis shows that the sector can only realistically scale-up to large volumes and infrastructure with carbon-free hydrogen produced from fossil fuels combined with CCS technology

(blue hydrogen). Natural gas and hydrogen can play similar roles within the global energy system, and the synergies between them – in application and infrastructure – will drive the hydrogen economy.

Pipeline: What impact will the current oil market environment have on the hydrogen sector?

I don’t believe industry ambition to realise the hydrogen economy will be dampened by the recent oil price crisis. The transition to clean energy is a multi-decade-long quest, and hydrogen has a significant part to play. According to our research in the ‘Heading for hydrogen’ white paper, more than half (52 per cent) of our survey respondents expect hydrogen to be a significant part of the energy mix by 2030.

It has to be said that the industry has reacted quickly to the current oil market environment with operators quick to cut investment following the 2020 oil price drop. However, several oil majors have reaffirmed their low-carbon commitments will continue. Bernard Looney, BP’s recently appointed CEO was quoted as saying that, he was “more convinced than ever” that BP must embrace the energy transition following the collapse of global oil markets.

The oil price has slowed industry activity, but net-zero carbon targets, and the broad societal support for them, remain in place. We are also seeing shareholders pushing the low carbon agenda within major oil and gas companies too.

Pipeline: Which markets have the best infrastructure to make hydrogen?

Blue hydrogen is currently cheaper and easier to create in large volumes than green. Once the required infrastructure and market dynamics are in place, it is expected that boosting blue hydrogen will create enough scale and momentum to make greener gas cost-competitive enough to overtake blue. The creation of a hydrogen grid and user base will provide a market and infrastructure into which hydrogen generated from renewables can be exported.

In the long-term, renewable hydrogen production can be expected to replace hydrogen produced from fossil fuels, eliminating the need for CCS. I think it’s reasonable to say that the countries currently relying on natural gas for heating residential and commercial spaces, such as Australia, Canada, the Netherlands, the UK and the U.S., are most likely to adopt hydrogen at significant scale for space heating. This is because their existing gas infrastructure can be adapted to hydrogen distribution and storage. With that will come hydrogen production.

Australia for example, is laying the foundations for liquid hydrogen exports. Such a hydrogen export industry will require extensive production, storage, and transport technologies. However, decision makers can take lessons from the planning and execution of LNG mega-projects in the country. Another interesting example is the project DNV GL has been undertaking in the Netherlands - the Power2Gas programme being led by Stedin, a Dutch gas and power grid operator. We have been managing and providing expert support to test that homes can be heated by 100 per cent hydrogen replacing natural gas in an existing pipeline for the first time in the country.

Pipeline: How important will collaboration be for hydrogen to reach its true potential? 

Collaboration is vital for hydrogen to reach its true potential. To progress to the stage where societies and industry can enjoy the benefits of hydrogen at scale, governments and industry will need to make bold decisions and balance short- and long-term priorities to address the key enablers I mentioned above.

In Norway for example, DNV GL is supporting the government with technical and market analysis to provide a knowledge base for decisions regarding national strategy and policy measures. It’s also about collaboration between organisations and companies to bring together the best technical expertise and experience that will drive this forward.

Pipeline: Are companies seriously looking at hydrogen? If not, what should they be doing?

Yes, I believe that they are. This is backed by our survey data in 2019 where 20 per cent of respondents expected their organisation to invest in or develop hydrogen in the year ahead. The figure for 2020 jumped up to 42 per cent, increasing by an impressive 108 per cent.

Another interesting outcome is the extent to which respondents agreed that hydrogen will be a significant part of the energy mix within 10 years – around the globe this is pretty consistent – with 56 per cent in Asia Pacific, 54 per cent in the Middle East and North Africa, 53 per cent in Europe, 40 per cent in North America, and 37 per cent in Latin America.

This interview first appeared in the June issue of Pipeline Oil and Gas News Magazine

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Norway: a land of opportunities and cutting-edge innovationhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/norway-a-land-of-opportunities-and-cutting-edge-innovation/Proserv’s CTO Tore Erntsen, and Alan Peek, Director, Controls Technology, reveal how Trondheim is the centre for the firm’s subsea controls R&D activity2020-06-01https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/june/norway-a-land-of-opportunities-and-cutting-edge-innovation/https://www.pipelineoilandgasnews.com/media/1797179/tore-web.jpg

Proserv’s CTO Tore Erntsen, and Alan Peek, Director, Controls Technology, reveal how Trondheim is the centre for the firm’s subsea controls R&D activity

For oil and gas companies of all scales, from supermajors and small independent operators to global oilfield service providers, Norway represents a significant area of activity and opportunity.

Daily production stood at around 1.7mn barrels per day (bpd) at the end of 2019, before the recent impacts of Covid-19 and global oversupply, and once further big-ticket offshore fields in the Norwegian North Sea ramp up their output, when market conditions once again normalise, it will approach 2mn bpd.

Norway offers a mature and established environment and provides a breadth of opportunities for our various specialisms here at Proserv with our measurement team, as one example, undertaking its first metering project in the country some 20 years ago. This team now works with one of Europe’s largest energy multinationals on some of its flagship projects, including key storage terminals and subsea fields on the Norwegian Continental Shelf.

Indeed, Norway’s hydrocarbon output is increasingly driven by its subsea capabilities, as technological advances have opened up greater possibilities over the past decade. Industry forecasts suggest there will be more than 1,000 active subsea trees installed in Norwegian waters, both shallow and deep water, by 2025, placing it behind only Brazil globally.

As a developer and supplier of subsea controls systems, many of our more valuable contract wins in the country have been focused on large-scale subsea projects, where we have often helped upgrade or extend assets.

R&D centre

As subsea solutions embody such a principal strength for Proserv, our technological expertise and capability is spread across the globe, including in our centre of excellence in Great Yarmouth, England, but our research and development (R&D) hub, where our next generation subsea electronics module (SEM), the Artemis 2G (A2G) has evolved, is to be found in Trondheim, in central Norway.

The city is the home of the Norwegian University of Science and Technology (known as NTNU), the country’s preeminent educational institution for engineering, and SINTEF, a major technological research organisation, which collaborates closely with NTNU. Trondheim is widely regarded as Norway’s technology capital, containing not only globally respected academic centres, but many small innovative companies and start-ups, contributing to the city’s reputation for innovation.

The core of our research team in Trondheim first came together over twenty years ago and so its ways of working and approaching new challenges are well established. There is no set template for such a process, every organisation will most likely have its own methodology, but for us innovation often advances in quite a collegial manner, for instance when the team has been approached regarding a possible enhancement to the performance of a piece of subsea equipment.

A bottom-up approach is employed where our engineers will effectively go through a feasibility phase to see if finding a solution or resolution is achievable. At this point, factors such as cost, need and the market are not really considered. As and when a result is attained, only then will economic considerations dictate its future viability.

Technical authorities

Across the Proserv business portfolio, we have established a raft of technical authorities who offer a crucial link to the direct market for our R&D team. These authorities can communicate exactly how our systems are being utilised by our direct customers, what features are or aren’t being fully engaged, and even how our technology fits into the broader operation of a field.

Equally, some of our technical authorities also sit on key committees for international standards, such as the API 17F for subsea production control systems and the MCS-DCS Interface Standardisation (or MDIS) network, alongside leading global operators. This means that, in addition to the more immediate analysis from the market and present customers, they also gain access to wider industry considerations regarding future developments and issues.

This wealth of feedback, via the technical authorities, naturally has the potential to help inform our innovators in Trondheim, steer further R&D and, ultimately, create opportunities to continually improve and drive forwards our technology with direct relevance to current and future requirements.

Global market conditions also have a crucial role in shaping corporate strategy, leading to a more top-down method to influencing and driving possible R&D activity.

Part of our present subsea plan, in this time of challenging oil prices, is to push a more service-oriented model towards our clients, aimed at delivering upgrades and retrofits, not expenditure intensive wholesale replacements.

The evolution of our A2G SEM technology in Trondheim, with its coexistence capabilities, allied to the adaptability and flexibility of our wider team to tailor and identify specific solutions, have combined to facilitate a directly relevant business strategy.

Continually moving forwards

Innovation is not always about making a paradigm shift to spur a great leap but often based around gradual and continual steps forwards. At Proserv, we are looking to encourage a company-wide top-down initiative to pool feedback from customers, and others in the field, to be channelled into our technical authorities and our R&D team to generate greater targeted, focused research.

Ultimately, we are one component within a moving landscape where our competitors are looking to utilise and make gains from our strengths and innovations. To keep ahead, and to bolster our R&D capabilities, attracting new talent is a key ingredient. Young engineers challenge the norms: they will instinctively look at situations with a fresh eye, examining established methods and practices, and asking new questions. This scrutiny might lead to original techniques being employed or new electronics in our products.

Each summer, we bring several students in from NTNU to gain experience of working in a technology business and a feel for our R&D work. They get to know us and, in some instances, they have subsequently joined our team.

Proserv is taking a proactive role in the energy transition, using some of the technology developed in Trondheim to build a business in the offshore renewables sector. To support this push, we will need to augment our R&D team with engineers possessing the right skills and background.

Maintaining partnerships and collaboration with the likes of NTNU, SINTEF and the multiple technology firms throughout Trondheim will be essential to retaining access to innovative people, who will give us a greater chance of continued success.

This interview first appeared in the May issue of Pipeline Magazine

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Wintershall Dea: well positioned to weather the corona-crisis https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/may/wintershall-dea-well-positioned-to-weather-the-corona-crisis/Wintershall Dea CEO Mario Mehren spoke with Pipeline Oil and Gas News about how the German gas and oil company is coping with the coronavirus crisis and why the merger a year ago with DEA came at the right moment2020-05-10https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/may/wintershall-dea-well-positioned-to-weather-the-corona-crisis/https://www.pipelineoilandgasnews.com/media/1796517/wintershall-dea-_mario_mehren.jpg

Wintershall Dea Chairman of the Board and CEO Mario Mehren spoke exclusively with Pipeline Oil and Gas News’s Julian Walker about how the German gas and oil company is coping with the coronavirus crisis and why the merger a year ago with DEA came at the right moment

Pipeline  What does the crisis mean in practical terms for the business and for your day to day work?

We are currently – as we all notice in our everyday lives – in a state of emergency. As Wintershall Dea we are also in a state of emergency, but still able to act. We are in a kind of controlled state of emergency, and so we are acting and responding with careful consideration.

In the last month, almost all employees at our locations in 13 countries - Germany, the UAE and elsewhere - have been working from home. Clearly however that’s not always possible for everyone, in particular not for our onsite teams. I’m truly thankful to our people at production sites around the world who are working hard – and maintaining appropriate safety measures - to continue producing gas and oil.

Pipeline  As CEO, what does the situation mean for you personally, and how are you managing to engage with your team and your people? 

Certainly it has been a big change to working life. Since mid-March I’ve been working from home myself, and my wife and children are at home with me. All of our people have dispensed with business trips, nationally and internationally, and that goes for me too. Not making any business trips is a particularly noticeable change!

Apart from that, I’m making more phone calls than ever before, and using online tools constantly. I’m a big fan of talking in person, and I miss it! But in an internationally active company, video conferences are always part of everyday life. We’re therefore well versed in that and also very well equipped.

I’ve been running digital meetings with employees for over a year now, and since we all moved to remote working we’ve stepped that up so they are weekly. Once a week I share a video message from my home office to our 2,800 people worldwide. Any employee can then submit a question, and I and my management team do our best to answer them.  

I also use my internal blog to share some of my personal thoughts about working from home. It’s an unusual and often challenging situation for everyone, and I think it’s important for me as CEO to recognise that.

Pipeline  What protective measures has Wintershall Dea taken at its production sites?

We’re doing everything we can to stem the spread of the virus and ensure health and safety. At the same time, we need to keep our operations and our businesses running so that we can continue to produce and deliver the energy the world needs. We have implemented the necessary safety measures at production sites. Teams have been reduced to a minimal staff, so that they can maintain safety distances. Measures such as only allowing lifts on production platforms to be used by one person at a time have been put in place. 

Pipeline  Is production and the business suffering in any way from corona?

At the moment we’re managing to keep our production largely stable. Our advantage is that we produce a lot in extremely remote regions such as Siberia and Tierra del Fuego, or are relatively isolated with offshore platforms on the high seas. We also benefit from the fact that we’ve invested in digitalisation. A number of our production platforms in Norway and the Netherlands are operated unmanned, and are controlled remotely. More broadly, we established various programmes to make virtual working easier last year, shortly after the merger of Wintershall and DEA. Together, these digital investments have helped make our business more resilient at this difficult time.

Pipeline  To what extent is the corona crisis threatening your business? And has your merger last year helped to make you more robust?

We, too, are affected by these developments, but Wintershall Dea is well positioned – even in this crisis. We have an extremely robust portfolio, we produce in 13 countries and at production costs that are almost half the average of our competitors. Our diversified, well-balanced portfolio, which makes us highly crisis-proof, is proving its worth here.

And yes, our merger last year – between Wintershall and DEA – came at just the right moment! May 2020 sees the first anniversary of our merger and our new company, and we are now seeing the benefits. We now face this crisis situation as a single, forward looking company. Europe’s leading, independent gas and oil company. We are leaders in terms of our production and reserves, but also in terms of our production costs, which are significantly lower than those of our competitors.

Pipeline  But the oil price has plummeted dramatically. What level do you think is realistic by the end of the year?

This depends on many very different factors that are difficult to predict. But it seems evident that oil and gas prices will be significantly lower than in 2019.

Pipeline  Do you expect the current crisis to have a major impact on the oil and gas industry?

Our economic environment is extremely difficult at present. In many countries, the coronavirus is sending the economy into a tailspin to an extent that we have not experienced for many years. The price development represents an extreme challenge for our industry. Even if we keep our production largely stable, we are still dependent on global market prices.

Pipeline  Do you expect the corona crisis to affect your company’s sales and profits this year?

The corona crisis will have an impact on the entire global economy and also on our industry.

Pipeline  Can you maintain your growth and investment targets? Will you also need to reduce costs? And will there be an impact on your business in the UAE?

We are well positioned and optimistic. We have very low production costs and at the same time very high reserves. But we have already taken steps to adapt to the new challenges: together with our shareholders, we have decided to suspend the dividend until further notice. We will use this flexibility to shore up our balance sheet.

Our investments for 2020 will be well below our previous plans at between 1.2 to 1.5 billion euros, which is a 20 per cent reduction on what we had planned only recently, and compares to a 2019 spend of around 1.5 billion euros. Our exploration budget, which will range between 150 and 250 million euros, will also be significantly lower than in 2019. We will also continue to look for opportunities to streamline our portfolio. However, we will only do so where we see appropriate long-term value.

Here in the UAE, we are a committed partner for the Ghasha concession project, an important part of our growth plans. We are proud to be a partner to ADNOC, which is part of the DNA of the UAE’s economy. We understand that ADNOC – together with us and the other IOCs involved – has to react to the current situation, and we expect and believe the project to progress.

Pipeline  Wintershall Dea wants to go public. Given the stock market crash, is that still at all realistic?

It’s no secret that our shareholders want to take us public. But it’s also no secret that an IPO is always dependent on the market conditions.

This interview first appeared in the May issue of Pipeline Magazine

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Maximising value from digital twin in asset managementhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/maximising-value-from-digital-twin-in-asset-management/Boston Consulting Group's managing director & partner Bjorn Ewers talks about maximising value from digital twin2020-04-21https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/maximising-value-from-digital-twin-in-asset-management/https://www.pipelineoilandgasnews.com/media/1795910/28-30-bjorn-ewers.jpg

By: Bjorn Ewers, managing director & partner at Boston Consulting Group (BCG) & Jean-Christophe Bernardini, partner & associate director at Boston Consulting Group (BCG)

How can digital twin technology create and capture more value in asset management?

Digital twin technology enables companies to optimise operating processes, improve capital investment in a virtual world before applying them in the real one, and create and capture more value by enhancing the effectiveness of an array of value drivers including capital expenditure reduction, time-to-first-oil acceleration, recovery rate increase, production acceleration, operating expense reduction, and health, safety, and environmental improvement.

The digital twin platform has, in one recent example, led to a significant reduction in manhours and maintenance. Longer-term projections show a 30 per cent reduction in maintenance work, a 70 per cent reduction in shutdowns, and a 40 per cent increase in pump availability.

Where do you see gaps where this technology can be used for better integration of the value chain?

Despite oil and gas companies creating digital twins more frequently, many are still failing in their efforts to capture and benefit from the potential value due to multiple reasons. For starters, they prioritise use cases for digital twins based on what the technology can do, rather than what generates the most value. Moreover, they do not structure sufficient buy-in and commitment from the end-users in their business and underestimate the extent of the changes to the ways people work that are necessary to realise value. There is no one correct approach for all companies with regard to implementing digital twin technology. Still, our experience demonstrates that sustainable companies steer clear of the aforementioned traits by implementing several essential steps while continually emphasising the importance of value.

What is driving the disruptive value creation from digital technologies?

Disruptive value creation from digital technologies continues to be driven by

two essential aspects. Firstly, oil and gas organisations are striving to become more competitive by devising business models based on innovation, with operators launching integrated or isolated operations centres and suppliers offering a higher percentage of production optimisation or maintenance as an outsourced service. The second key factor is organisations are benefiting from digital twin technology. They are in a position to make intelligent, decisive decisions as a result of replicating traditional processes or physical equipment through digital twins in a virtual environment. Ultimately, each digital twin of an asset or plant become more influential as a company’s digital twin use portfolio develops.

How can companies maximise the potential value capture from digital twins?

To start with, oil and gas companies would benefit from considering the following:

  1. Have a deep understanding of the business challenges and also opportunities where digital twins can deliver value. The analysis should consider end-to-end vital operational processes
  2. Identify and choose the right fit for purpose in digital solutions based on the target operating philosophy and business opportunities identified
  3. Implement a data-driven strategy and governance model, aligned with the prioritised use-cases identified and supported by a comprehensive IT architecture approach
  4. Adopt an operating philosophy and models to change how processes are operated, and again supported by change management program which drives the case for change

Through these four starting points, oil and gas companies can maximise the potential value capture from digital twins by gradually building a flexible IT and data infrastructure in line with evolving IT requirements, plan how to introduce a proven technology solution across an asset portfolio as effectively as possible, and evaluate how to utilise the resources available to them best to develop upcoming projects. This may entail adding functionality to existing use cases or starting new ones, and adequately preparing and devising the implementation sequence by analysing how to deliver the most value and which assets have similar work processes, stakeholders, and technology requirements are essential.

Identifying the human resources required for each asset and integrating them early so they can learn from minimum viable product development will ensure continuity between development and scaling teams. As organisations progress from scaling to daily operations, they should also ensure that the operating model and capabilities are in place to manage and maintain the digital twin as real-world conditions change.

Organisations are compelled to establish and track KPIs to monitor value creation, while sustainable governance mechanisms should be adopted to facilitate continuous development of successful digital twins and termination of ones that are not performing to expected levels. Furthermore, promoting success stories will also contribute to building momentum and support funding future digital twins.

What are the essential steps to succeed in developing digital twins?

To successfully develop high-value digital twins, there are several essential steps that companies are highly recommended to follow.

  • Identify a limited number of high-value use cases – assess value and feasibility before prioritising, concentrate on the most viable, and redirect resources from programs that are not meeting expectations to those more likely to succeed
  • Develop a proof of concept and agile approach– establish the value potential, devise a simple mockup in a sandbox testing environment, and rectify any technical issues with a detailed strategy to capture value
  • Creating a product team – having a team with a product owner from the business, with the capacity to take decisive and fast decisions
  • Build a minimum viable product – create an end-to-end solution using existing data, verify value to end-users during all stages, and anticipate obstacles involved in managing change
  • Build and create a robust change management program from launch day
  • Scale-up – unveil a digital twin based on asset and value similarities, expand it by adding functionality and work with asset entities to ensure prompt adoption Monitor and capture value – closely track value creation, ensure measures are taken for the development team to receive feedback, highlight accomplishments, and cancel programs that do not provide value

What are the main digital twin data challenges and how can these be resolved?

Data ingestion and governance can present digital twin data challenges, with legacy assets, engineering, and 3D data frequently having to be recreated from the beginning. For oil and gas companies, it’s important to prioritise essential data over available data to contain the amount of eff ort involved when scenarios such as these occur. New technologies such as laser scanning, drones, and point cloud solutions in geo referencing are all viable options as they can save companies time and reduce costs that occurred from data ingestion.

The main challenge for greenfield assets is embedding digital requirements in the process of engineering, procurement, and construction. Doing so will enable the exchange of information with structured data and metadata instead of unstructured data, and it is essential to have transparent governance and ownership regimes to guarantee that data is sufficiently maintained and updated.

Upstream oil and gas companies must develop or acquire new capabilities for digital twin solutions to be effective, with traditional IT departments often discovering areas for improvement in software development, cybersecurity, data science, user interface design, and test management. Developing capabilities internally, relying on external suppliers, and choosing off -the-shelf solutions are all possibilities, and the decision should be made after establishing strategic importance in relation to controlling such capabilities.

To achieve sustainability and success, every company should develop a flexible IT and data structure as part of a long-term vision, pursue a modular approach, establish clear architectural principles, and gradually build the infrastructure while identifying and applying solutions to challenges from concrete digital twin use cases.

This interview first appeared in the April issue of Pipeline Magazine

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Changing energy landscape results in new trendshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/changing-energy-landscape-results-in-new-trends/Darren Grainger, managing director at NES Global Talent discusses key issues facing the oil and gas industry today when it comes to jobs, hiring and training...2020-04-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/april/changing-energy-landscape-results-in-new-trends/https://www.pipelineoilandgasnews.com/media/1797058/_dsc4129lowres.jpg

Darren Grainger, managing director at NES Global Talent discusses key issues facing the oil and gas industry today when it comes to jobs, hiring and training 

 

As oil demand is affected by the COVID-19 pandemic, what its lasting impact on the industry going forward will be is the key question on everyone’s mind.

Despite the industry running very proactive and responsive yet ever-changing HSE programmes and policies that implement, deliver and monitor compliance, the impact is very tangible, according to Grainger.

“The current travel restrictions have impacted several countries around the world, with visa cancellations from certain countries, quarantine rules and even lockdowns impacting worker movement. The geographical talent pool that companies usually tap into for searching and selecting new personnel have also been affected,” Grainger said.

In the current business environment for companies looking to hire, the main challenge will be the impact from travel restrictions as well as talent development. “The traditional demographic of nationalities in current roles in the region for expatriates is being severely challenged with new emerging talent evolving in new lesser-impacted COVID-19 affected countries,” Grainger said, adding that the talent pool within a country or in neighbouring countries is now a hugely attractive proposition for companies looking to hire.

Leverage the flexibility of technology

In this new environment of travel and personal contact restrictions, it may become challenging to recruit in the usual manner so NES is supporting its clients’ with video technology to connect them with candidates and delivering the capacity to interview anywhere through a mobile device, Grainger said.

As specialists become available over the coming weeks and months however, leveraging technology to conduct interviews and sourcing local talent will be key. “Questions can be pre-recorded for candidates to answer in their own time or clients can conduct a live interview. The link can be shared with other stakeholders, reducing the burden and overcoming current geographical constraints,” he said.

NES have over 4,000 contractors across the Middle East region, and many of these candidates are looking to stay in the region as their current assignments end, and secure another role without returning to their home country, he added.

“Given the current travel restrictions across the region, employers may be best served with focusing on candidates currently based in the region in order to keep project timelines on track,” Grainger said.

Meanwhile, clients have embraced working from home for non-essential field operations roles for expats and locals that are not on rotations. Some national operators have confirmed 28:28 rotators will remain in the country for their o‑ period and have provided accommodation given the travel re-entry restrictions, he added.

Skills Shortage

Skilled talent has been a challenge in recent years. Grainger said this is because during the last downturn graduate recruitment and apprenticeships were cut severely. Additionally, a new challenge now presents itself. “Technology skills are now in demand and conversely competition for engineering talent is now fierce with tech firms in particular that are going after the same students who would historically have chosen oil and gas,” he said.

Digitalisation impact on workforce

New disciplines and job roles have evolved in areas of data science, analytics and advanced materials development, Grainger said, adding that as the ecosystem of businesses change, that in turn impacts a more efficient supply chain. The IOC operating model for digitalising is broken down into several key functions; research and development, new approaches to fuels and products and end-to-end operations - including the supply chain. All functions can leverage new approaches to data collection and analytics and change significantly with the use of data for business improvement and to drive efficient process, Grainger said.

Separately, Grainger expects the national development vision of many Middle East countries will result in creating long-term strategy and therefore hotspots in areas of energy diversification, which will be focused in renewables and downstream. Additionally, as these countries continue to target increased production, the region itself remains a hotspot with emerging developments in East Africa.

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P&O Maritime Logistics embracing digitalisationhttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/po-maritime-logistics-embracing-digitalisation/Martin Helweg, chief operating officer, P&O Maritime Logistics talks about the impact of digitalisation in the massive sector and launching a new open maritime data system...2020-03-26https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/po-maritime-logistics-embracing-digitalisation/https://www.pipelineoilandgasnews.com/media/1797004/martin-helweg.jpg

Martin Helweg, chief operating officer, P&O Maritime Logistics spoke to Pipeline Oil and Gas News’ Julian Walker about the impact of digitalisation in the massive sector and launching a new open maritime data system

What is the new open maritime data system you are working on?

The open data system provides a single, open-source platform for vessel operators to share data and collaborate on solutions that actively improve the safety, sustainability, operational excellence and technical reliability of seafarers and vessels across the globe.

What is the reason for building the open data system?

In today’s digital age, information storage and data sharing have become a part of our lives. We exchange e-mails and messages with friends and colleagues daily irrespective of where they are located. Of course, we expect this to be true for our professional environment as well.   Following the example of other industries collaborating in specific areas for the greater good improve the maritime industry as a whole.

Are you working with any partners?

Yes, with regards to the new open maritime data system, we are planning to collaborate with other OSV operators.

What kind of data will you be covering?

As a starting point, we will be focusing on HSSE data and maintenance data such as defects, however our vision, is to expand the data capture to equipment data from IoT technology.

Why is it important to have a maritime data system?

Data is a crucial commodity to unlocking real value for our clients, however it should not be a chargeable commodity, historically OEM’s have seen this as a revenue stream, but ultimately this is our data. Data is like pieces in a puzzle if you work in silos, it takes longer to finish the puzzle, but if you collaborate, you can complete the puzzle quicker.

What is your outlook for the oil and gas maritime sector?

Our industry is constantly changing and evolving. On the energy sector as a whole, the world needs to realise that the offshore energy sector will be around for many decades to come – also servicing the hydrocarbon industry, as oil and gas will remain part of the energy mix for many years. We believe that we need to inspire an informed debate about exactly that – the energy mix. We certainly want to move towards renewable sources of energy, but at the same time we need to cater for a growing demand for energy around the world. In this balance, we need to move away from the most carbon intensive fossil fuels – for example coal – and move to cleaner sources such as gas, while the whole energy infrastructure of the world transforms and scales up for renewables.

Furthermore, customers now want a handful of select, trusted, suppliers who can provide much more than one single service. The key challenge for industry players has been the ability to offer our customers a wide portfolio of value-added marine services as our clients’ demands evolve and shift towards a need for a range of services and solutions. We realised, a long time ago, that the entire industry needed to change and started by changing our own perspectives. We needed to diversify investment into our own businesses, in order to stay relevant, and create value. And with the creation of P&O Maritime Logistics, we can focus on three strategic segments – offshore, port services and logistics – creating further value for our customers.

How important is digitalisation going to be for the maritime sector?

Our customer demands are increasingly shifting towards advanced services, and having realised that a long time ago, we began to digitise aspects of our service offering in response and built advanced algorithms to optimise the supply chains of our customers.

For example, by having real-time visibility of vessel locations and applying advanced routing systems, we are able to provide our clients with better, more reliable updates on delivery of cargo. This has optimised their supply chain by improving project scheduling, reducing downtime and the need for manpower and support services.

Additionally, we have worked with several of our key customers to integrate data into their systems, also allowing us to learn more about our customers, thereby enhancing our service offering to cater to even more aspects of their businesses.

Digital is disrupting companies from their service offering through to their operations and maintenance. From customer dashboards providing customers real-time insight into the state of their operations, to the use of Internet of Things to learn more about the state of our vessels, we see IT as a driver of both the topline and of cost reductions.

Disruption is one of the five pillars of our strategy and it is important that we continue to disrupt the status quo and innovate. We are consistently working towards digitalising our ships, through onboard IoT that measures a ship’s health certificate in real time, helping us manage our fleet maintenance in the most effective way. Digitalising our entire fleet is part of our disruption mindset and how we are embracing digitalisation- making us a true 21st-century company.

We have recently signed an agreement with American Bureau of Shipping (ABS), collaborating to deliver a condition-based class (CBS) regime for the platform supply vessel, DMS Courageous. This is an exciting and historic project for us, as the vessel will become the first to utilize ABS Nautical Systems as the computerised maintenance management system to transmit planned maintenance and condition- based maintenance activities to ABS. We aim to work together, cloud-to cloud, to facilitate a seamless flow of class data from the vessel into the ABS Decision Support Center (DSC).

Last year, we also teamed up with Baker Hughes to pioneer lube oil analysis in the marine space. This analysis can tell us a great deal about the condition of our ships – from detecting the presence of water and foreign particles, to changes in temperature, which can give insight into the likelihood of equipment failure in the motor, gearbox and propellers. While it previously could take up to six weeks to receive results from a lube oil analysis, with digitisation, this process can now take place in real time, enabling maintenance to become predictive, which in turn leads to a reduction in unscheduled downtime and repair work.

This interview appeared in the March issue of Pipeline

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Halliburton optimistic about Egypt’s long-term reserves viability https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/halliburton-optimistic-about-egypt-s-long-term-reserves-viability/Colby Fuser, vice president of Egypt and Libya at Halliburton speaks about the Egypt market and the company’s operations there...2020-03-22https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/halliburton-optimistic-about-egypt-s-long-term-reserves-viability/https://www.pipelineoilandgasnews.com/media/1796981/colby.jpg

Colby Fuser, vice president of Egypt and Libya at Halliburton speaks about the Egypt market and the company’s operations there

Which projects is Halliburton active in within Egypt?

Egypt is an important part of our portfolio, and we remain bullish about the prospects for oil and gas services and the fiscal improvements in the economy at large. Halliburton is involved in numerous projects across the country including in the deepwater Mediterranean, West Nile Delta, the Gulf of Suez and others. Halliburton has also been a key partner in several operators’ onshore exploration and development campaigns in the Western Desert and Sinai. In the Western Desert, we recently collaborated to help a customer drill the longest horizontal well in Egypt.

How have the recent Egypt exploration and production awards benefited the company?

The new awards will allow Halliburton to work closer with operators to deploy technologies that help increase production and lower costs per BOE. Halliburton’s value proposition is to collaborate and engineer solutions to maximise asset value for our customers.  When the countries we work in expand their exploration plans, we collaborate and seek to achieve zero HSE incidents, no non-productive time and high service quality.

How has your business outlook in the country changed in the last year?

Halliburton is optimistic about the long-term viability of Egypt’s reserves, and we remain committed to making a positive contribution to growing hydrocarbon resources. The addition of new IOC’s and other operators reaffirm that despite challenges, the market is resilient. We also see the business changing as it relates to HSE and service quality. 

Halliburton is leading the efforts to collaborate with customers and execute on best practices to help minimise risk and prevent injuries. The changes in HSE, along with the new blocks in the Mediterranean and Red Sea, provide a positive outlook for Egypt.

How is Halliburton planning to increase its oil and gas activities in Egypt?

Halliburton is involved in offshore and onshore projects to help operators increase production and lower costs per BOE.  For example, our fracturing technology and subsurface insight help operators unlock reservoirs that were not commercially produced in the past. Additionally, another important factor is providing customers with the right solutions and technologies to help ensure the development and production of Egypt’s reservoirs over the long-term.

There are many examples where Halliburton technology delivered superior results including for an operator in the Mediterranean Sea where we performed one of the deepest intervention and acid stimulations that increased production.

In the Western Desert, we doubled the daily production by executing a nitrogen foam frac combined with technology to mitigate proppant flow-back.  When we execute on our value proposition, our customers can accomplish more with their budgets, which creates new opportunities for Halliburton.

What is your view on the available workers resource in the country?

We are excited about the opportunity to accelerate and broaden the capabilities of Egypt’s already strong skilled workers. We focus on developing the local workforce through on-site training and enabling employees to gain experience outside of Egypt where they can eventually utilise this experience locally as the market grows.

Halliburton is investing in young and middle-management development programs to support the government’s plans. Can you share some details?

Human capital development is critical to the success of our business, and investing in our people will pay dividends by increasing the diversity and skill base of employees. The agreement we signed with the Egyptian Ministry of Petroleum & Mineral Resources offers new training opportunities to grow local talent. Halliburton introduced a customised development program for select participants to expand their capabilities and assist Egypt in its role as a leading regional oil and gas hub. The Modernization Project is an excellent step toward achieving sustainability.

We completed our phase one training, which consisted of 20 individuals who spent three months with Halliburton learning various skills.

Phase two of this training starts in March where we will select five of the 20 to travel to the U.S. for a three-month rotation. They will gain valuable experiences in leadership, operational execution, strong HSE culture and many other skills they can share with their teams upon returning to Egypt.

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Bilfinger takes new direction to maximise regional opportunities https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/bilfinger-takes-new-direction-to-maximise-regional-opportunities/President and CEO of Bilfinger Middle East, Jon Rokk, speaks about the way forward for the engineering and maintenance company.2020-03-17https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/bilfinger-takes-new-direction-to-maximise-regional-opportunities/https://www.pipelineoilandgasnews.com/media/1796976/jon-rokk-billfinger.jpg

President and CEO of Bilfinger Middle East, Jon Rokk, speaks to Pipeline Oil and Gas News’ Nadia Saleem about the way forward for the engineering and maintenance company.

Jon Rokk, who has over 6 years’ experience in the region and over 20 years’ experience in Bilfinger’s core industries of oil & gas and chemicals & petrochemicals, took over as President and CEO of Bilfinger Middle East in the summer of 2019 and has since been working to streamline operations in the region to maximise potential opportunities.

Bilfinger has two distinct service lines, engineering and maintenance, along with technologies that support both lines of business. Around 1,400 engineers are based in the region to power its engineering services, with the bulk being based out of Oman and the UAE. Bilfinger in the Middle East also provides maintenance for assets in the utilities, power, water as well as the oil and gas sectors.

Speaking on the sidelines of the Egypt Petroleum Show 2020 in Cairo, Rokk detailed the new direction the company will be taking to grow its business in the region.

“We’re seeing great demand for high-level expertise from an engineering perspective in petrochemicals, especially in Egypt. Our German origins are 150 years old, and we’ve been in the Middle East (Kuwait) since 1968 – we have that rich heritage level of expertise, which is also proven, so we can offer value added services that our customers need,” Rokk said, pointing at one obvious growth opportunity.

In addition, the company is looking to build its strength in size as well as to leverage offshore expertise from European experience. “In the UAE for example, we are yet to develop the scale a company like Bilfinger can offer, so we have unexplored opportunities to tap into, such as the Ruwais complex which will allow us to broaden our footprint,” Rokk explained.

Meanwhile, Bilfinger has been strong in the maintenance business in Kuwait and Saudi Arabia, but is looking to branch out into the oil and gas sector, which presents several opportunities.

“Because the installed base and facilities are growing up and getting older, this opens up many problems that Bilfinger can solve. This is where we come in to offer efficient and cost-effective solutions with our value-add services and technology,” Rokk said.  

Additionally, Bilfinger is looking to bring to the region its expertise in turnarounds and shutdowns. In Europe, the company is among the top to deliver on time and on cost. “Many of our clients are asking us directly, when Bilfinger is going to get into doing Turnarounds? This is exciting opportunity and tells me that great untapped potential and customers are beginning to see the real value in long term relationships and partnerships,” Rokk added.

Last year, Bilfinger won multiple engineering contracts from Abu Dhabi National Oil Company (ADNOC), which entail the provision of front-end engineering design (FEED) for onshore facilities. Serving as one example of the company’s recent success, Bilfinger has plans to grow the stream of contract awards.

“In recent years, we’ve always grown – now there is an opportunity to grow faster but in a controlled way. We can scale up more quickly than before because we are pushing the ‘One Bilfinger Way’. This is different from how the business worked in silos earlier. If you channel the energy to deliver a more-focused operation that will allow us to grow more successfully. Partly, it’s about tapping into the core skill set that we have – we bring ideas, skill set and technology from Europe.” Rokk said.

Bilfinger is operating in a market that is challenged by several factors, stretching from lower commodity prices, a greater push from clients for better performance yet at lower costs, as well as from rising competition in the area of digitalisation.

To address these challenges, Rokk said: “You have to keep innovating, because you can’t just deliver what your competitor is delivering. Our DNA encourages change and innovation and we welcome those ideas that make a difference.” That goes hand in hand with Bilfinger’s significant efforts in digitalisation solutions and that is one way to stay ahead of competition, according to Rokk.

“Digitalisation is a buzz word but it’s about making use of data in a way that can add value to the asset owner. We’re going to our clients and running pilots to show them what we can do because we have faith and proven successes with our technology and solutions. Clients will never stop wanting more for less, but we have to figure out how to deliver solutions faster and cheaper and in a better way,” he added.

“Implementing Bilfinger’s strategy for 2020+ in the Middle East, I’m going to make sure that I help all our people to drive growth and deliver success.  It’s a really exciting time for us,” he added.

This interview first appeared in the March issue

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Energising millennialshttps://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/energising-millennials/As the world pivots towards a lower carbon energy future, the oil and gas industry is looking to upskill and welcome a new generation of leaders, engineers and innovators to reshape and reinvigorate the sector.2020-03-12https://www.pipelineoilandgasnews.com/interviewsfeatures/interviews/2020/march/energising-millennials/https://www.pipelineoilandgasnews.com/media/1796972/dnv-gl.jpg

By: Ben Oudman, director and regional manager, Region Continental Europe, Middle East, India and Africa, DNV GL – Oil & Gas

As the world pivots towards a lower carbon energy future, the oil and gas industry is looking to upskill and welcome a new generation of leaders, engineers and innovators to reshape and reinvigorate the sector.

In the short-term however, concerns over skills shortages and the ageing workforce impacting company prospects have risen in the Middle East and North Africa (MENA) according to new research published by DNV GL. A fifth of senior oil and gas professionals (20 per cent) cited this issue as one of the top five barriers to growth – up from 15 per cent last year. Conversely, such worries have lessened globally, down six percentage points to 15 per cent.

New Directions, Complex Choices: The outlook for the oil and gas industry in 2020 is based on a global survey of more than 1,000 people, the largest international sample in the report’s history. Now in its 10th year, the report assesses industry sentiment, confidence, and priorities, and provides expert analysis of the key challenges and opportunities for the year ahead.

An evolving workforce

Predictions and perspectives on recruitment and the needs of those considering a career in the oil and gas industry are investigated for the first time in the annual outlook report.

Unlike those questioned globally, a third of MENA respondents (33 per cent) expect their business to increase headcount for the year ahead. This opinion is comparatively unchanged from 2019 (32 per cent). In contrast, fewer people globally believe that headcount will rise, down from 34 per cent last year to 28 per cent.

The report asserts that staffing challenges now, and in the future, may be further compounded by the depth and pace of change in some parts of the sector. The impact of decarbonisation initiatives and the demands of digitalising operations are key examples, much discussed and debated by industry leaders. The report asserts that younger professionals and new entrants into the industry will likely spend much of their careers steering their organisations through this transformation.

Galvanising decarbonisation

Notably, DNV GL’s Industry Outlook survey revealed that more than half of respondents in the MENA region (55 per cent) expect their organisation to actively adapt to a less carbon-intensive energy mix in the year ahead. For instance, the study found there is a greater focus on maintaining or increasing investment in photovoltaic (PV) solar (71 per cent) and solar thermal (57 per cent) in 2020. The need for accelerated change is the most pertinent in MENA at 71 per cent compared to 25 per cent in North America.

It is anticipated that a developing renewable industry in MENA can also provide much needed diversification of local employment opportunities, viewed favourably by local governments. DNV GL is currently supporting several renewable energy projects in wind, solar and energy storage throughout the region.

While skills and experience from oil and gas are easily transferrable to alternative energy sources, operational, commercial and new practical know-how is required. Though the abilities of risk management professionals are most in demand by a quarter of global respondents (25 per cent), 10 per cent need environmental specialists.

Beyond the dawn of digitalisation

To support sustainability and improve productivity, the development and deployment of digital tools is rapidly establishing a foothold. Within 12 months, there has been an unprecedented jump in the number of those who view digitalisation as a priority, up from a third (34 per cent) in 2019 to more than half (54 per cent). Almost all respondents globally (92 per cent) expect to increase or maintain spending in this area in the year ahead.

A huge majority of MENA respondents (96 per cent versus 92 per cent globally) expect their organisation to increase or maintain spending on digitalisation in 2020. In particular, 63 per cent expect investment in cyber security to increase, up from 38 per cent a year ago.

Cyber security concerns have risen significantly in MENA with a much larger slice of spending forecast for the year ahead – more so than globally. Safely controlling and averting cyber incidents is a high priority for 35 per cent of those questioned, nearly quadrupling last year’s figure of 9 per cent. Embedding procedures and processes to counter the potential impact of an attack requires specific skills. No wonder that nearly a fifth (19 per cent) of those questioned need artificial intelligence and data specialists to join their organisation. This necessity for digital expertise is significantly higher globally at 28 per cent.

Enticing the next generation of decision-makers, engineers and innovators to lead and transform the sector is critical and complex. Just under half of MENA respondents (47 per cent) believe the industry as a whole is struggling to attract younger employees.

In summary, the survey revealed that those who believe their organisation is an industry leader in digitalisation are more confident in their company’s prospects, more resilient to volatility in the oil price, and are pursuing greater investment in the energy transition.

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