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Getting out of the downturn with Intelligent Energy

Saturday, April 8, 2017

The first plenary discussion of the Intelligent Energy conference in Aberdeen in September discussed whether Intelligent Energy can lead the industry out of the downturn - with speakers from Shell, ConocoPhillips, Chevron and BP.

In his introduction, moderator Judson Jacobs, head of upstream technology practise with IHS Cera's Upstream Group, said there is a growing realisation in the industry that digital tools can achieve cost effective results - but there is still a question about whether they can drive the performance improvements that the industry is looking for, and pull the industry out of the downturn.

Greg Hickey, BP

Greg Hickey, Digital Technology Operations Advisor, BP Upstream Technology, said that BP is setting on a journey to 'transform and modernise' its upstream business. This involves 'pursuing a manufacturing ethos more than we have in the past,' he said.

It also means 'driving down costs, standardising the way work is done, and eliminating non-value adding activity,' he said.

Mr Hickey was formerly a process engineer in BP Upstream, and led the 'facilities' part of BP's Field of the Future program.

'But this traditional response is not enough,' he said. BP is also looking to develop new business solutions, which address specific problems, such as operational downtime and drilling efficiency.

'This consists of much more than technology,' he said. 'We need to give the workforce new skills and competences.' We need to 'predict future upsets and deal with them before they occur.'

BP wants to increase the use of standard ways of working, particularly between the back office and the control room, he said.

The main reason that this hasn't been done before is that 'technology wasn't ready,' he said.

In the past, the various platforms to build large scale integrated systems were not available, and there was no cloud infrastructure to allow 'data as a service' to become a normal way of working, he said. And in the past data was mainly stored in silos.

For example, of the 30,000 sensors on a platform, typically the data from only 1 per cent of those can be used for decision making, he said.

Today BP uses platforms like GE Predix to process data from offshore sensors, with some platforms being fitted with 50,000 sensors sending data every few seconds. This is 'The Industrial internet of things,' he said.

The system altogether includes sensors, machine learning and analytics, working with real time data.
'A key element is accessing data through large data lakes,' he said.

'We can provide facility engineers with a single desktop, point out areas which need attention right now.'

'We can ensure each engineer has an understanding of the current state of plant health with a view tailored to their area of responsibility.'

'The key is to bring it together and make it predictive so we can be proactive - make decisions on the best intervention to make.'

The company can investigate performance anomalies much easier and identify problems much faster.

'The technology will allow us to take the next step - to operate reliably and safety,' he said. 'Traditional methods will not allow us to do.'

In future, new ways of operating will continue to emerge, perhaps with machines taking over a larger volume of work.

Own or use?

BP is considering changing its approach to wanting to 'own' technology, because technology which you own needs a lot of continuous investment in maintenance, he said. If you buy it, the supplier does all that for you.

'We want to take advantage of what's out there. We are deeply committed to cloud computing for example,' he said.

'We are a GE Strategic Partner, but we don't want to retain that for ourselves. That's kind of the direction we see this going.

In terms of learning from other industries, one obvious one is the medical industry, which also uses predictive analytics, he said.

Perhaps the most important issue for a company is to make a commitment to implementing new technology. 'You really need to make a choice,' he said.

BP's CEO, Bob Dudley, has said that digitalisation of our business 'is fundamental to the way we need to operate,' he said.

A remaining challenge is increasing operating reliability from the current 94 per cent to 96 per cent. Having 4 per cent of downtime is equivalent to having your car unavailable for 14 days a year, something car drivers would not accept, he said.


David Boyle, UK Operations Manager, ConocoPhillips, said that the company's priority was moving to 'lean manufacturing' type approach, with elimination of waste, and developing 'integrated operations'.

We're 'changing how we're structured and how we operate,' he said.

The process to change the company started planning in the second half of 2013, and implemented at the end of 2014, so is pre-oil price crash.

In the Southern North Sea, some of the assets are now over 40 years old, and there is a big mix of assets.

In the Central North Sea, it has 2 assets, the 'J' Area (with fields starting with the letter J), including the 2013 Jasmine Field and the Britannia area, developed in the mid to late 1990s, previously in a joint venture with Chevron.

ConocoPhillips also owns a portfolio in the East Irish Sea, which is operated by Centrica.

The company's vision was to be 'cross functional, multi-disciplined, Collaborative, empowered, decisive, inspired,' he said.

It has created a number of multidiscipline teams, with a focus on reducing business and safety / environmental risk, improving efficiency and reducing cost.

The term Integrated Operations 'means different things to different companies,' he said. It is not just about creating meeting rooms.

There are many benefits to the integrated operations centre - for example it can be a 'learning platform', helping young engineers develop skills much faster.

The integrated operations centres have proven a 'fantastic place to implement new ideas,' he said.

The project has led to big improvements in production efficiency and equipment uptime, he said.

The integrated operations centres can have 70 people in different disciplines working together, including logistics (marine and air), planning / scheduling, production delivery function (with process and production engineers), and HSE people.

With co-located multidiscipline teams, 'we're been able to work more efficiently and collaboratively,' he said.

'We were worried people didn't want to work in that sort of environment. Now they are queuing up to get there.'

The company is also gradually re-organising itself to a regional model, rather than been one large integrated company, he said.

Over the past 2 years, ConocoPhillips has increased the speed of change. 'We intend to have an outline of what we wanted to do - and get after it, improve as we go. 'We've been able to get the organisation energised in a different way.'


The planning department is a fairly new one. 'We put a lot of time and effort into that
Guys looking at data and making decisions about when it makes sense to do work.'

As a result of better planning, the company could make more efficient use of its vessels, and removed one supply vessel from its fleet.

There has been focus on improving 'tool time' of offshore work - the amount of time a technician is actually at a work site. In 2012, the company was embarrassed to discover that the tool time was typically only 2 hours out of a 12 hour shift.

'We started to understand bottlenecks, a huge number of frustrations which prevented people getting to work,' he said. As a result, tool time has improved to 6 hours. 'I think we can get to 8,' he said.

The planning team has also identified ways to reduce time interval between shutdowns on the platform in the 'J' Area from one year to 3 years.

The maintenance backlogs are reducing every month.

The unplanned shutdowns have been reduced from about once a week to every 4-5 weeks.

ConocoPhillips recently sent a team to visit UK high end car manufacturer Mclaren. 'We want to understand how they dynamically plan,' he said.

It also sent a team to Vodafone's office in the Netherlands, to look at how it plans it office space. 'We wanted to get ideas from a different industry. We got some great ideas,' he said.

Some of the projects and technologies have achieved big 'step changes' in results, such as a 30 per cent reduction in cost, he said.


Johan Atema, VP Production Excellence Producing Assets, Shell, said that Shell is preparing for a 'lower for longer' scenario, making sure it can be profitable at $20 or $40 oil prices, he said. '$40 / barrel is pretty average over history.'

It is going to be much more explicit about targets. 'Upstream assets will be extremely benchmarked.'

All of the asset teams will need to come up with a plan for how they can be as good as the 'top quartile', he said. 'This really exposes where we have gaps. '(To be) the asset at the bottom end, nobody likes.

All of this will all improve the company's competitiveness, hes said.

Mr Atema told a story which had been told to him by a taxi driver collecting him at Amsterdam's Schiphol Airport, who was driving a Tesla.

When a Tesla vehicle has a crash, or is in an extreme situation, data is automatically sent to a monitoring centre, and a staff member calls up the driver to say that they have spotted something unusual in the data, can they help.

This led to Mr Atema thinking, 'we can't we do that in Shell?' he said.

This is more than a technology, it is a way of thinking and working, with proactive collaborative support, he said. With good work processes and a proactive mindset, you can build communities which can achieve a very high 'uptime', he said.

Mr Atema told an example from Shell's activities in Oman, where it has thousands of wells and hundreds of field stations. It would not make economic sense to connect them all with instrumentation. So instead, Shell aims to 'connect' its engineers who visit the wells, who are provided with a GoPro camera (to record what they can see), and tablet computers with fast data connections.

The engineers can look up instructions on the tablet and request permits to work to be issued from a remote office. 'You can enable an enormous amount of collaboration,' he said.

In another example, Mr Atema said he visited a platform offshore Aberdeen, and saw there was a lot of painting going on, outsourced to another company, and calculated that the cost of painting worked out at £1000 per square metre. 'That's pretty ridiculous,' he said. 'We compared to Norway, they were less than half.'

When challenged, the contractor said that it was Shell's working practises which were making the painting so expensive, including permit to work and materials management.

As a result, Shell Aberdeen made adjustments, and 'I think now they are lower than Norway,' he said. Both Shell and the supplier benefitted. 'They want to stay in business as much as we do,' he said.

However Shell is considering bringing some processes back in house which were previously outsourced. Outsourcing some primary processes, such as core well operations, 'hasn't paid off for us,' he said.

Shell is looking at other companies to see how they are better at maintaining continuous improvement, and doing 'lean'. It would also like to be as good at providing tracking information materials as Amazon.

Two years ago, the company was making business plans around a $60 to $80 oil price. 'Now we just don't know,' he said.

Shell is learning a lot from the way work is done in its downstream operations, which have always been done at much tighter margins. 'They are pretty sharp in getting workflows working for them,' he said.

Shell is also making sure more of its initiatives actually get operationalised, rather than just leaving them in the planning stage, as it often did before, he said.


Mark Edgerton, Alba Asset Manager with Chevron, talked about how the performance of an organisation can be improved by focussing on the whole system, analysing performance, considering a range of competing initiatives, and finding ways to make small improvements.

To Mr Edgerton, 'Intelligent Energy' means a large and continually growing toolkit, to achieve a range of different improvements in different areas.

For example, Chevron in Aberdeen is focussing on condition based monitoring, with sensors on machines. 'Keeping machines running is one of the most important things we can do,' he said.
'All of our equipment operated from Aberdeen has these systems installed. All this knowledge is brought back to subject matter experts.'

'We're getting better at having higher reliability with monitoring. We build a history of performance and can schedule maintenance more effectively.'

Often the analytics systems suggest changes which can make a fairly small difference to performance, say 1 per cent. If this suggestion was made to 1 engineer for one piece of equipment, it might not seem worth doing. But when the change can be made on a fleet of equipment, the benefits mount up, he said.

Mr Edgerton said he personally dislikes the word 'workflows', but 'I really like what they do.'

Workflows to Mr Edgerton could be an arrangement of software tools, so an engineer can take the data through one tool after another, with tools arranged in a carefully thought through sequence, so as to do the work in the most efficient way.

'Workflows have changed the way humans interact,' he said.

'We've mapped the way engineers perform their daily tasks, we've used this to understand make it more efficient.'

'You 'click a button and have all of the tools there.'

If an engineer is doing 40 tasks day, and you make each task 1 minute shorter to complete, then all the time saves quickly add up, he said.

'An engineer can do 40 tasks a day. If they improve each one by one minute, that's giving them an extra day a month.

Chevron does not start each day with a 'morning call' meeting as it used to. Now engineers start the day by figuring out what work they will do that day and 'sequencing their tasks', and then the 'morning call' meeting follows that.

In terms of improving the way it works with suppliers, Chevron has restructured the way that it leases helicopters, moving to a system of booking slots rather than hiring a helicopter for a long term period. 'The vendor can control that and be more efficient,' he said.

The changing economic times provide an opportunity for suppliers to show where they can add value - for example if a company develops a new downhole pump which can save millions of dollars.

'It's a platform for service providers to do things other than sell stuff,' said Chevron's Mr Edgerton.

'We've seen service companies getting very ambitious.'

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