Gregory Hale walked the aisles at this year’s Offshore Technology Conference to find out what moves the industry is making toward automation.
OTC conference floor.
Automation and reliability: those two words went hand-in-hand during May’s Offshore Technology Conference (OTC) in Houston. In this down market, with capital projects drying up, reliability and efficiency – hallmarks of automation – are becoming focal points for producers.
“I am seeing interest, across the board, in automation,” said Mario Azar, president of Siemens Oil and Gas and Marine global business unit at OTC. “The focus is really shifting. The industry has to think differently. Everyone has to ask ‘can technology help us? How do we become more efficient?’ You have to do things smarter. It takes time, we are not there yet. The more you automate, you are making costs lower and it is trusting technology more. Trusting technology is important with something so precious. There is a lot at stake.”
Indeed, a massive amount is at stake with oil prices kissing US$60/bbl. That means any kind of projects that will squeeze more costs out of production are paramount.
“Reliability is more important than anything else,” said Robert DiStefano, vice president and general manager for reliability consulting at Emerson Process Management. “As much as 5% of production capacity worldwide suffers from reliability issues and 43% of that 5% includes unplanned downtime because of equipment problems.”
Companies that have solid reliability programs reap benefits, including:
- Reduced downtime and increased profitability
- Spending less money for maintenance
- Increased safety — incidents go down when reliability goes up
“People are starting to use reliability as a business strategy,” DiStefano said. “If a CEO is not asking direct reports about downtime and what money they are spending on maintenance, then they are derelict of duty. You have to change the practices.”
As a part of that change process, users need to find a way to ward off the flood of data so they can capitalize on the right information at the right time and make immediate decisions, which can be the difference in profit levels.
“We are starting to see companies surviving in a downturn and flourish because they are investing now to grow in the future,” said Jerry Hines, North American oil and gas manager in the energy segment at National Instruments.
Part of the growth strategy is maintaining equipment better, doing more with less people, and making sure equipment stays up and running, he said.
“Users are seeing the advantage of going digital,” Hines said. “Ten years ago it was a different story. Now they are seeing the advantages and they say ‘let’s work in a collaborative partnership and implement the technology.’”
With capital projects drying up, Luis Gamboa, global business development manager for oil and gas at Rockwell Automation, said producers are not actually thinking long term, but rather need quick answers to get through this quarter.
“If you leave them on their own, they will cut costs,” Gamboa said. “They will go to the service companies and they will say ‘I need a 20% cut in service costs.’ Oil companies are focusing on immediate results. Now that the first level of cuts has taken place, they are looking at protecting assets. They are spending for efficiencies. They are looking at asset integrity. You can’t afford unplanned downtime.”
Chet Mroz, former president and chief executive at Yokogawa Corp. of America, and now executive advisor for strategy and innovation, said that, in a down market, it is possible to look at other areas, such as midstream, for growth options.
However, having a plan of attack for a generation getting ready to hand in their papers, Mroz truly feels automation will help the cause.
“With baby boomers leaving and fewer younger engineers coming in, it sure helps to have more automation to replace empty seats, but it also helps to standardize and make sure everyone is trained and understands the standard operating procedures,” he said.
Gregory Hale is the editor and founder of Industrial Safety and Security Source (ISSSource.com) and is the contributing automation editor at Offshore Engineer.